Walt Disney never wanted a war with Florida Gov. Ron DeSantis. The right-wing political leader, however, went after the biggest single-site employer in his state after its former CEO Bob Chapek made a statement criticizing DeSantis' so-called "don't say gay" legislation.
Hundreds (321 in total) of other companies have signed a petition from the Human Rights Campaign that broadly condemns anti-LGBTQ legislation, but those companies did not specifically call out DeSantis. So, the governor -- in a move that plays to his political base -- has made a bunch of petty moves against Walt Disney (DIS).
DON'T MISS: Disney CEO Fires Back at Florida's DeSantis, Makes Clear Threat
DeSantis stripped Disney of its Reedy Creek special district. He painted that move as taking away special status from the company. The problem is that Florida has thousands of special districts including one for The Villages, a retirement village whose residents are overwhelmingly conservative voters, and the Daytona Speedway, home to the Daytona 500.
The governor isn't some sort of Robin Hood taking away Disney's tax breaks, he's a politician using a well-known company as a plot point in his campaign for president. That's not a part Disney seems willing to play.
Disney CEO Bob Iger made it very clear that his company had other options for its billions of dollars during his company's most recent earnings call. He didn't say anything implausible like that company would leave Florida (it can't and it won't). Instead, he made it very clear that Disney could continue to invest in Florida or it could use that money elsewhere.
Call it a threat, or label it Iger simply showing DeSantis that he wasn't the one with the leverage, but it was a strong statement that Disney followed up on by pulling a $1 billion headquarters project from Florida. The company also canceled moving thousands of workers -- highly-paid white-collar workers -- from California to Florida.
The company then followed that move by having two of its top executives follow Iger in putting DeSantis on notice.
Disney Becomes the Mouse That Roared
Disney Parks Chairman Josh D’Amaro said that he is hopeful that Disney will be able to continue to invest in Walt Disney World after the company canceled the HQ project.
"I remain optimistic about the direction of our Walt Disney World business. We have plans to invest $17 billion and create 13,000 jobs over the next ten years. I hope we’re able to do so...," he said, according to BlogMickey.
That remark was followed by a much stronger statement from Walt Disney World President Jeff Vahle:
Regarding our world-class destination, our desire is to continue investing in our core business in an effort to attract and welcome millions of visitors to Walt Disney World and Central Florida each year so they can enjoy the kind of hospitality our region is known for around the world. Our plans currently call for us to invest $17 billion in Walt Disney World over the next 10 years and create 13,000 new jobs to continue doing our part as a leading employer in the hospitality and themed entertainment industry. We hope those plans will become a future reality.
Iger, D'Amaro, and Vahle are making it clear that Disney has other options for its billions of dollars in investment. They're trying to calmly show DeSantis that his political retaliation over the company objecting to his legislative agenda has consequences.
Forget Walt Disney – We’re all-in on this travel stock
DeSantis Responds With Rhetoric
As the governor of Florida, DeSantis has a responsibility to his constituents to act in their best interests. Not angering the state's biggest tourism draw over it choosing to disagree with him on a piece of legislation would be in those best interests, but how DeSantis responded to Disney's pulling its $1 billion headquarters project wasn't met with a call to sit down and talk, it was answered with political bluster.
"Disney announced the possibility of a Lake Nona campus nearly two years ago. Nothing ever came of the project, and the state was unsure whether it would come to fruition. Given the company’s financial straits, falling market cap, and declining stock price, it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures," DeSantis shared in a statement.
And, yes, Disney's market cap and share price have fallen, but "financial straits" simply ignores reality.
In its second-quarter earnings release, Disney reported that revenues for the quarter and six months grew 13% and 10%, respectively. Diluted earnings per share (EPS) from continuing operations for the quarter increased to $0.69 from $0.26 in the prior-year quarter.
Disney also reported $3.23 billion in cash from continuing operations. In addition, the company's domestic theme park business -- Disney World and Disneyland -- grew by 14%.
DeSantis wants to paint Disney as some cash-strapped company that can't back up its threats with money. That just seems silly when you look at the billions it has pumped into Disney World in recent years building immersive lands based on Star Wars, Avatar, and its Pixar properties while also adding massive roller coasters themed to Tron and Guardians of the Galaxy.
Disney has made a real threat. It can't leave Florida, but it can choose to invest much of the money earmarked for Disney World elsewhere. DeSantis can listen, or he can take food off the plates of the constituents he's supposed to serve.
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