Political pragmatism and an internal poll obtained exclusively by TheWrap led the company to cease its battle with the potential presidential candidate
When Florida stripped Disney of its special tax zone around the company’s theme parks last week, it led many observers to wonder: Why would Disney cede this long-held ground?
What it would come down to is a cost-benefit-analysis decision after the entertainment giant, which is still trying to recover financially from the pandemic shutdowns of its theme parks and the expensive toll of building up Disney+, of having an enemy in Florida Gov. DeSantis — one who could go on to become president — and the results of an internal poll, obtained exclusively by TheWrap, showing they’re losing two important demographic groups central to Disney’s financial success.
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On the one side, there’s DeSantis, a rising power in the Republican Party. On the other, there’s the Walt Disney Company, the state’s largest employer and global entertainment giant. It’s a fight that could stretch on for years as DeSantis eyes the White House and Disney tries to keep expanding the jewel in its theme park chain — an important driver of profits that’s still recovering from the pandemic.
Despite the public feuding, most recently over a special tax district that eased Disney’s expansion in Florida, there remains an uneasy alliance. DeSantis needs the jobs and tourism Disney provides to sell Florida as an economic success story. Disney needs some level of political stability and protections for its workers. As the push and pull for control of the district grows more contentious, Disney will have to pull a real trick to safeguard the most magical place on Earth.
The latest blow DeSantis struck against what he called “Woke Disney” came Friday as the state legislature stripped the governing body over Walt Disney World’s land, the Reedy Creek Improvement District, of its autonomy. “There’s a new sheriff in town,” DeSantis proclaimed as the bill moved towards passage.
The big win for DeSantis is the fact that he, not Disney as the district’s dominant landowner, will appoint members to the district’s five-person board and the entity will be renamed the Central Florida Tourism Oversight District.
Why Disney gave up the fight
Why would the Walt Disney Company, one of the largest and most powerful media conglomerates and certainly one of the most litigious, allow this to happen?
Political pragmatism and even concern about how the dispute was affecting the theme parks played a role. According to internal polling obtained by TheWrap, Disney had been losing ground with two key demographics: families with young kids (due to the parks’ exorbitant pricing) and those over 50 (over perceptions of the company’s political stances).
As a result, Disney asked itself a huge question, according to an individual with knowledge of the situation: “Do we want to be DeSantis’ punching bag for the next two — or four — years? Is that worth whatever economic benefit comes from controlling the Reedy Creek Improvement District? The consensus was ‘No.’”
A Disney representative didn’t respond to TheWrap’s request for comment for this article.
Disney finds itself in a complicated quagmire of prior allegiances, internal debates, lost market share and the fear of reprisal as the media giant faces a changing political landscape and a host of business challenges under returning CEO Bob Iger.
“We are focused on the future and are ready to work within this new framework, and we will continue to innovate, inspire and bring joy to the millions of guests who come to Florida to visit Walt Disney World each year,” Jeff Vahle, president of Walt Disney World, said in a statement after the bill passed.
The new arrangement could open up unexpected possibilities, including the sale of land within the vast Walt Disney World empire. Reedy Creek board members previously had to be landowners, something Disney handled by giving each of its hand-picked appointees a five-acre parcel of land that was to be returned after the board member stepped down. Actually selling land to outsiders might have allowed them to bid for a district board seat. But now that DeSantis has taken over, Disney can sell residential plots, something it is actually considering.
Disney has been preparing for a DeSantis takeover for a while now. At a meeting held on Jan. 11, the Reedy Creek Improvement District approved a plan that would allow for two water parks, one theme park and thousands of hotel rooms to be built on-property. These plans were pushed through because Disney knew the end of its autonomy was near, and it wanted to make sure it got those approvals in place.
Yet with that potential upside, there’s a perilous downside. Under the new governance structure, DeSantis will be able to control “the number, location, height, size, appearance and use of billboards and all other advertising signs, banners, handbills and devices,” which could limit Disney’s ability to promote the Magic Kingdom. (Election laws would prohibit DeSantis from taking personal advantage of those rules for a future presidential run.)
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The beginning of the end
The controversy began last March when DeSantis signed into law HB 1557, the Parental Rights in Education Act, also known as the “Don’t Say Gay” law, which limited classroom discussion and instruction on sexual orientation and gender identity. Disney, the largest employer in Florida thanks to the Walt Disney World resort that encompasses four theme parks, two water parks, a shopping and dining district and tens of thousands of hotel rooms, initially kept quiet, thanks largely to the wavering leadership of then-CEO Bob Chapek. This was an even more baffling decision given the company’s move to force Imagineering and other business units to move to a new Florida campus.
Eventually, after employees staged walkouts and protests, Chapek said something. “We were opposed to the bill from the outset, and we chose not to take a public position because we felt we could be more effective working behind the scenes directly with lawmakers on both sides of the aisle,” Chapek said during a shareholders meeting in March of last year.
That’s when DeSantis had a meltdown.
“I will not allow a woke corporation based in California to run our state,” DeSantis said, following Chapek’s comments. “Disney has gotten away with special deals from the state of Florida for way too long.”
DeSantis was referring to the foundation of the Reedy Creek Improvement District, which was established in the lead-up to the creation of Walt Disney World and was implemented, in part, to keep Disney from pursuing a rival project in California.
The Florida legislature created the Reedy Creek Improvement District in 1967 “to support and administer certain aspects of the economic development and tourism within District boundaries,” the district’s website reads. It oversees land use and provides public services like fire protection, water treatment and waste collection. It even maintains public roadways.
The land the Reedy Creek Improvement District oversees encompasses approximately 25,000 acres in both Orange and Osceola counties, and operates with little outside oversight, making it easier for the entity to build roads, allow the construction of new theme parks and permit renovation of hotels. From the days when the dream was that EPCOT would be an actual, functional city and not an educational theme park, there was wording that would have allowed for Disney to build a nuclear power plant. (Disney has put several solar farms up; one is in the iconic shape of Mickey Mouse.)
By April 2022, DeSantis was rattling his saber and seeking legislation that would have stripped Disney of all of its privileges (mostly in terms of regulations and related fees). Floridians became nervous because the Reedy Creek Improvement District’s debt would then be offloaded to neighboring counties. Calmer heads prevailed and that dissolution, at one point scheduled for June 1, will no longer happen. Disney can point out that things could have been worse.
“It’s all theater”
Still, uncertainty — the kind big corporations like Disney and their shareholders hate — now looms over the former Reedy Creek. Will DeSantis move on to other targets as his political ambitions grow? Or will he use his public victory over Disney to make the company a punching bag as he hits the campaign trail, despite insiders’ hopes the dispute will die down? And will Disney revise its plans to expand in Florida, given the lingering doubts over control of its vast properties there?
While Disney and DeSantis might seem like enemies now, that wasn’t always the case. In 2020 and 2021 Disney contributed $100,000 to DeSantis in cash and $6,809 in kind for “food and beverage,” likely catering for a fundraiser or some other campaign event, according to the Tallahassee Democrat.
And for all his railing against the company, he must have a sentimental spot for the company: DeSantis got married at Walt Disney World. The ceremony was at the Grand Floridian’s wedding pavilion and his reception was at the Italy pavilion in EPCOT. Despite his attempts to untangle them, Florida and Disney remain intertwined, as his personal history illustrates.
“It’s all theater,” one insider said. And in the case of Disney vs. DeSantis, it may come down to who’s best at putting on a show.
Drew Taylor is a reporter at TheWrap. Before joining the organization in 2021, Drew was a freelance film journalist with a keen interest in animation and Disney history. Drew has been covering film, television and theme parks for 15 years. He has written for the New York Times, the New York Daily News, Time Out New York, Collider, The Playlist, Polygon, Vulture, Box Office Magazine, AOL Travel and Syfy. He was the executive editor and social media manager for Moviefone before it was purchased by MoviePass. Additionally, Drew co-created and co-hosts “Light the Fuse,” a weekly podcast dedicated to the “Mission: Impossible” film franchise that recently celebrated its 200th episode milestone. He also authored the book “The Art of Onward,” about the making of Pixar’s 2020 fantasy film, and provided liner notes for several Mondo vinyl releases for Pixar features (“Up,” “Coco” and “Lightyear”).