The Magic Kingdom
My visiting family just returned from a two-day stint at Disneyland. They are a Disneyworld family, but they enjoy Disneyland equally well. I wrote several months ago about my visit to Disneyworld and how impressed I was by the pleasure it evokes in so many people who visit and visit regularly. Yesterday, the state of Florida revoked Disneyworld’s special district permit that it has enjoyed for 55 years when it was used to induce them to come to the wilds of rural central Florida near a small sleepy town called Orlando. Since then, the Disney presence in central Florida has spawned an entire industry, one that brings over $5 billion in tax revenues to the state of Florida. That represents 6% or so of the state’s annual budget, the fifth largest of all the states (California, New York, Texas and Washington are larger) and it exceeds the total state budget of three specific states (Delaware, South Dakota and Montana). Disney employs no less than thirty-eight lobbyists in Florida, who make it their business to dole out millions of dollars in campaign contributions to politicians on both sides of the aisle. They have worked hard for 55 years to be non-partisan in their otherwise self-interested efforts to be a good and powerful citizen of the state. That special relationship ended yesterday and will end for good once Ron DeSantis signs the bill into law.
I don’t know whether Disney deserves a special districting status that it has enjoyed for so long and it seems that it is less a financial money-saver for them than it is a control instrument that allows them some degree of freedom in continuing to develop their land in central Florida. The obvious bet that the Republican block in the Florida legislature, led by its outspoken Governor DeSantis, has made is that Disney is in too deep in Florida to do anything but grin and bear it. It is the Republican’s petty way of getting even for Disney voicing its displeasure over the controversial “Don’t Say Gay” legislation that they just passed at DeSantis’ urging. Ron DeSantis is doing everything he can to transform Florida into the home of the brave and the land of the free while he marches his way towards the White House. He figures that the best way to do that is to trash corporations like Disney for being “woke” and for listening to their stakeholders, both employees and shareholders, who pressured Disney into voicing its disagreement with the new legislation. In essence, DeSantis is setting up a generational war of the aging Floridians against the young Millennials that are pushing the corporate ESG agenda.
My reaction to all of this is somewhat predictable in siding with Disney against the nastiness and pettiness of the Florida Republican caucus. But I go much further in my thinking. What I hope is that this backfires on DeSantis in a major way and it punishes Florida Republicans and the voters who support them. Disney will not leave Florida over this. The Republican bet on that reality is clear. But Disney does have the option to decide to change its development strategy with regard to expanding their presence in Florida. Since the loss of their special zoning status creates more of a hindrance anyway, and, based on my recent visit to DIsneyworld this January, the Orlando area may be at that growth point of diminishing returns. I actually think Orlando has passed that point already and that Disney should instead direct its development dollars to places other than Florida. They have certainly made enough money on their land there and could certainly sell all the excess at a nice gain anyway, so perhaps that side of things can be a wash.
I don’t know enough about the dynamics of the attractions business, even though I had a big taste of it a few years ago with the New York Wheel project, but it is likely that it has changed enough so that a rethinking of the next steps is in order. Relocating their growth to other places (as they have somewhat done with Disney Cruises) might open up new urban-area attraction concepts or even an interesting four-season park concept that can combine indoor and outdoor attractions that take full advantage of all four seasons in some fresh-for-development local like Maine or perhaps the Adirondacks. I think there would be lots of demand for a non-Florida location and its not as though this new area needs to cannibalize Orlando. In fact, they might be able to use a more northern locale to seasonally adjust their offerings to allow people to enjoy their summers in a less hot and sticky place than Central Florida.
I have taken my stand on the whole ESG concept that is getting so much traction in corporate America. It is not going away. In fact, it is only becoming more important. I think it is one of the best and most enlightened developments we have ever seen in the corporate world. Companies are finally realizing that they owe allegiance to a broader set of stakeholders and that even shareholders specifically are better served by them being socially responsible citizens that do not put money above everything at all times. A company like Disney cannot be blamed for trying to remain neutral and non-partisan whenever it can. It is a sensible path for most corporations. But when some political jurisdiction enacts legislation that offends its stakeholders as the DeSantis “Don’t Say Gay” legislation did, it is proper for the corporation to respond to the wishes of its stakeholders. In fact, it is almost mandatory that they do so or they should be punished to the degree the stakeholders feel strongly about their displeasure. That is how democracies are supposed to work and everyone is supposed to be able to make their decisions accordingly. If Florida voters do not want Disney and feel it is too “woke” for their taste, they should be able to enact laws as they wish (so long as they are constitutionally appropriate). But the inverse of that is also true and Disney should be able to and, indeed, should vote with its feet.
None of us has the luxury to make decisions in a vacuum. Florida Republicans cannot just do what they want and suffer no consequences. If their actions are generally agreeable with their stakeholders (voters and corporate citizens) then all will be well. If they fail to include the views of their complete stakeholder group, they should get what they get. The one thing I am certain of is that the older, more monied Republican voters of Florida are, at their heart, economic animals, and that will certainly make them reasonably well-balanced in making their decisions in the totality of the environment in which they choose to operate. Hate “woke” as much as you want, just don’t expect “woke” to love you back and be prepared to pay the price of your convictions. That is the real magic of the kingdom.