Have we ever seen this sort of risk to companies, in the US, before?
I’m sure DIS would not simply walk away from it’s assets in Florida, but all new investment could be directed elsewhere.
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When someone does something very stupid you never call him intelligent. You do not say he is cagey or whatever when the results backfire.
This saga is hardly over. That $17 billion will go elsewhere. I am not saying Disney World will close down. But I will say Dis will stop all further investment in Florida even if peace is made.
This is too bitter for Dis to ever be bothered again with Florida.
Unless the special district is repaired rightfully all bets are off that Disney over the next two to three decades simply winds down Disney World.
Meanwhile $17 billion will be spent elsewhere. CA namely. Even if that meant upgrading Disneyland and building another park brand in that area. I think though it will mean a Disney northern CA breaking ground in next five years. CA can make a decision to give up forest land to such a project.
There would be an important symbolism to Florida reinstating Disney’s special district.
That will never happen. There is very bad blood that wont go away. Smiling in public wont cut it.
The decision goes straight to how intelligent someone isn’t. Over grown ejit.
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Disney is cutting jobs. They have no money to expand.
None of their current problems have been caused by Florida. That’s simply a distraction from a decade of mismanagement.
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Depending on how you resolve AP to AR Dis has at least $10 billion in cash or more now.
Dis is more profitable than BRK. But admittedly looking at BRK’s profits on a Yahoo income statement does not do BRK justice. Usually.
Ignore the layoffs. That is operations. You simply tighten down operations as you can endlessly. That does not necessarily mean retained earnings are problematic.
Side note you all might like to see this. Disney developed this. It is a major contribution to the industry.
Not sure where you get this, but Disney has billions to expand, and they have multiple projects in place to do that. They anticipate $17B in park improvements in Florida over the next decade. They are also petitioning the town council that controls Disneyland to allow a series of changes there, reconfiguring the park in significant ways. (They are also, of course, ramping up more in the Marvel/Pixar/Disney film line, as well as funding growth of streaming Disney+ hoping to head it to profitability in the next few years.)
The management faced a rather unique set of circumstances during the pandemic; their most lucrative and profitable segment, the parks, were crushed as people stayed home. Cruise lines, restaurants, and of course the parks themselves had little recourse but to stay the course and hopefully come out the other end - as they have done.
I’m not sure what else they should have done. They did rely on their linear networks (broadcast and cable; ABC, ESPN, Disney Channel, etc.) and set in motion an infrastructure for the next iteration (streaming), as well as producing a string of blockbuster films for exploitation through various channels, but it’s not surprising that those couldn’t suddenly carry the load for the rest of the sprawling company.
And the Florida thing is a mystery to me. When has an entire state government gone after a single company based on a couple of comments about a piece of legislation? That it has turned into a cat fight is unfortunate, but I don’t know that Disney should fold either; encouraging a bully only encourages them to be a bigger bully.
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Not only is that true but there is a bigger problem in Florida many people back him. His legislature backs him.
Disney has to take diversity stands. All employers by law have to take these stands. The opposite is literally to take hate stands against your own employees. Only a few companies like Chic Fil-a get away with that. Most companies never want to go down that road.
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I’ve been wondering what the difference is between this free speech (commenting on legislation) and the green colored free speech that has been determined to be constitutionally protected by the Supreme Court.
What if Disney had instead endorsed a candidate for governor and sent campaign contributions to that candidate - then that candidate lost and the winner came after Disney for supporting a different candidate?
Is that really all that different from this situation?
–Peter
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Peter that is an excellent point and frankly there in many states are laws to protect against political reprisals.
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What if Disney had instead endorsed a candidate for governor and sent campaign contributions to that candidate - then that candidate lost and the winner came after Disney for supporting a different candidate?
Is that really all that different from this situation?
Yes. That would be campaign donations, before an election, with the issues much less concrete.
In this case there was an election, and those elected voted for a school curricula bill. WHICH WAS ALREADY PART OF A CULTURE WAR, and Disney attacked it, without any ability to actually change it. Disney thus amplified the culture war in the most ineffectual (for them) way possible.
The district, which is really just Disney, has been selling municipal bonds, and the only beneficiary is Disney. They were supposed to build housing and, with EPCOT, even more housing and an airport. Without a broader set of beneficiaries there is no end to the charges of fraud that could be brought against these bonds.
Persecuting political enemies. The state of Florida and business today.
BTW last article I saw this campaign by DeSantis has fallen flat.
The boarder wall thing was a fluke. It was a reach. But it struck a chord. Whether the wall would ever have mattered was besides the point.
All of this is just demagoguery.
Disney much less attacked the law and much more defended the position of its employees.
Florida does not want a Disney World at all.
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You need to explain this. Last I checked, Reedy Creek has a permanent population of less than 50 who rent mobile home space for $75/month. All are employees of Disney. They elect the city officials. There are 19 landowners who pre-Desantis elected the board of supervisors that runs Reedy Creek.
Given that the district is entirely Disney, why shouldn’t the sole beneficiary be Disney? Where is the potential for fraud?
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Florida has finally really gotten serious.
Florida’s idea of a mousetrap.
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Nothing like vigilant thought police to make the place the centerpiece of “freeedom”, eh?
Steve
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““Freedom” I do not like that word, it infers things”.
- could have been 1984
Given that the district is entirely Disney, why shouldn’t the sole beneficiary be Disney? Where is the potential for fraud?
Why wouldn’t you co-mingle your corporation with the district if you could get away with it? Why pay corporate bond rates when you can pay muni rates? Nothing at all wrong, or even suspicious, with this mixing of the corporation and the local government. It’s smart and efficient.
The dummy government is an especially brilliant touch, normally associated with esteemed organizations such as the CIA. Not that there could possibly be any connection.
I knew someone who payed cash to get into Disneyland. Later he was approached to upgrade his visit and handed a slip to sign. Disney had his credit card number, which he had never provided.
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I need to talk to my condo association and the USPS. We are a district with part of two towns in our district. We have a district tax.
The real evil is the USPS. They only use one town’s post offices to deliver the mail not the other town’s post office. I see the evil there.
I think my mailman might be…well you know…
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This sounds a bit fishy to me. Maybe I’m wrong, but I’ve never heard of Disney employees (OK, cast members) approaching anyone attempting an upsell on anything other than food at a restaurant or a photo op. If they are doing this I would think they would do it via the phone app. They aren’t dumb…the phone app approach costs almost nothing while a 1 on 1 approach seems expensive.
But assuming they do this, maybe the guy forgot he used a credit card to buy food or souvenirs and that’s when the upsell happened. I just can’t imagine you are walking down Main St and someone walks up to you with a credit card slip to sign.
Mike
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Or maybe he used it to sign up for ESPN or Hulu etc. which are Disney partners…
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Most of your thesis is nonsense. Disney has corporate bonds which are used to finance those things the for-profit corporation is responsible for: building out attractions, setting up streaming services, financing movies, building cruise liners, and so on. There are also Reedy Creek bonds, which many be used only for those things normally associated with governmental services: building roads and other infrastructure, constructing sewer systems and the like. Also included: power, water and wastewater services, fire protection, emergency medical services, drainage and flood control, and solid waste and recyclable collection and disposal.
Is having Reedy Creek an advantage for Disney? Absolutely. It administers an area of tens of thousands of acres to the liking of its sole client. On the other hand, the district lies in two counties, and the taxpayers of those counties provide no taxes, services, or have liability for the privilege of having a huge business in their midst. This is unlike so many areas, where local government leans on residents to help pay for infrastructure improvements, police and security or other wants of certain private businesses.
Reedy Creek is entirely self financing; it takes no state revenues (quite the opposite) or local.
As an example, when Universal Studios (Sea World, etc.) need an infrastructure improvement for better traffic flow (sewage abatement, policing, etc.) they petition the local government, which debates the issue and decides how best to handle it - or perhaps deny or modify it. That makes their planning harder and take longer. The local politicians also decide if they can afford to do that out of general taxpayer revenues or if they need to float bonds, or even administer a special tax (or fee) to do so. This injects an uncertainty into the planning and expansion, which is not fun.
In general I have to say the Reedy Creek concept is not oneI would like to see replicated widely - except in the case of Disney, which has shown exceptional governance over the property, unlike most corporate entities which seem happy to slash and burn and leave the detritus behind. Disney has tens of thousands of acres of once mosquito infested swampland, now untouched and generally well cared for. I am aware of no consequential environmental catastrophes nor scandal worthy abuses emanating from the company - or from Reedy Creek - over its lifetime. Are you? There might come a time to reign in this sort of governmental/private partnership, but at the moment it’s being done as political theater, out of spite, and for no reason except Presidential ambition.
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