Florida’s controversial sexual education bill and Disney’s pledge to fight it have led to a series of unintended consequences for both parties. Where does the story turn next?
Primer: Disney Takes Stance On Florida Legislation
For those who might not be familiar with the Disney/Florida battle, this section is a primer on what led to this week’s action. If you’re already in the know, skip to the “Future” section below for commentary about impact on visitors to the Walt Disney World Resort in Orlando.
Florida’s state legislature introduced bill CS/CS/HB 1557 – The Parental Rights in Education bill, referred to by opponents as “Don’t Say Gay.” As passed, the bill prohibits educators from teaching sexual education and gender identity in public schools from kindergarten through third grade. You can read the bill here, lines 97-101 reflect the controversy.
Disney came out against the bill after initially aiming to avoid the topic. For critics of the bill, Disney didn’t show its disapproval fast enough, for proponents of the bill, Disney’s eventual position was also problematic.
CEO, Bob Chepak, went a step further after realizing he’d not reacted quickly or publicly enough for either side and clarified the brand’s position. He scheduled a meeting with Florida Gov. DeSantis and Disney-employee advocates and attempted to donate $5MM to the Human Rights Commission. The HRC rejected the offer.
Florida Retaliates, Finds Unintended Consequences
A special session of the Florida legislature was called to retract Disney’s special tax district of its property around the central Florida area known as Reedy Creek Improvement District. This corporately-owned municipality had its own police and fire departments, and utilities management, and paid the same property taxes to the state as other similar residents. Here’s a state representative discussing the move,
“State Rep. Randy Fine told CNBC’s “Squawk Box” on Thursday that the bill isn’t retaliatory but said “when Disney kicked the hornet’s nest, we looked at special districts.”
“People wanted to deal with the special district for decades,” he said. “Disney had the political power to prevent it for decades. What changed is bringing California values to Florida. Floridians said, ‘You are a guest. Maybe you don’t deserve the special privileges anymore.’” – CNBC
The bill passed and Disney quasi-lost its right to self-manage the municipality, though residents of the area (yes, there are residents) still have to vote to rejoin the rest of the population and end the Reedy Creek era. It would go into effect on June 1st if Gov. Ron DeSantis signs it into state law.
Losing the status, however, was a double-edged sword for the state. The special zone had taken out debt financing for improvements as many municipalities do. That means that if Reedy Creek is dissolved in the counties for which it resides, they also inherit the $1bn debt the area has accrued.
Future Moves Put Floridians, Visitors In Crosshairs
Wait, this is a travel blog right? Talk about travel. Got it.
Disney will certainly take any affront to its business as a threat and will likely return a gesture in kind. But what would a response to the Disney Florida bill (Reedy Creek) look like?
One suggested notion as to how Disney may respond to Florida is to never reinstate Florida-resident discount passes. These reduced pass prices make it possible for many Floridians to enjoy the park, and while they are a consistent source of revenue (both in monthly subscription revenue from the passes but also in ancillary revenue from park visits), the Disney board has been clear that they would prefer fewer discounted pass holders.
Another area where Disney may respond to Florida is in future investment. The house of mouse had announced plans for several large-scale Disney-themed communities with housing, shopping, and the overall Disney attention to detail that has made them famous. They do not have to invest in Florida, though a move like that would be less likely to punish the state as the brand has not yet announced plans outside of California.
Like Universal Studios, the brand had also announced low-cost housing options for employees to be built in the area separate and apart from its residential community. They could cancel this too but, again, that’s more likely to result in causing harm to Disney and its employees by its own decision-making, rather than hurt Florida for the development of the housing.
There’s always speculation of another “gate” (theme park) and with Universal’s Epic slated to open in the next couple of years, there will be pressure on Disney to maintain its dominance in the state. It currently operates twice the number of parks and water parks as Universal, though Epic will double Universal’s current footprint including resorts, water, and theme parks. However, Disney has not announced any current plans for an additional gate so without something to cancel, it’s hard to prove there would be a material effect felt by Florida legislature and residents.
If there’s one clear tool that Disney forever has in its back pocket, it is the insatiable demand of visitors. If Disney absorbs more costs, that will have an effect on visitors – there’s no way Disney will pay for any new tax structures. More money for Disney means less budget for families who might have otherwise visited other area attractions.
Disney CEO, Bob Chepak, has been under fire for his management of Disney long before this issue arose. The company has taken a stance, and the state responded, whether the two continue retaliating with both Floridians and visitors to Disney World in Orlando are left in the crosshairs.
I may be the only one left in the world who doesn’t think companies should take a stance on political matters at all. I shouldn’t have to make a choice on whether we spend time at Disney, Universal, or AMC theaters based on legislation they support or condemn. Regardless, Disney and Florida are going to have to find a way to get along, they are co-dependent and it appears it will be messy along the way for all parties involved.
What do you think? Will Disney and Florida pull back from the brink? Will a loss of investment by Disney, or special tax incentives by Florida be enough to end the battle?