The Ron and Mickey Show

It seems as if we've all been watching a reality TV show play out starring Florida Gov. Ron DeSantis and the Walt Disney Company.?

The two have been at war since early 2022, when Disney denounced DeSantis' “Don’t Say Gay” legislation that subsequently became law. It prohibits public schools from offering classroom instruction on sexual orientation or gender identity to children younger than third grade and greatly constrains what students of all ages can hear in their classrooms.?

For its part, Disney pledged to stop giving money to Florida politicians and candidates who supported it, including DeSantis.

And while hundreds (321 in total) of other companies signed a petition condemning the anti-LGBTQ legislation, Disney, the state's largest single site employer, was more out front out in its criticism, quite frankly at the urging of its employees.

Tensions escalated between the governor and the prominent entertainment and media conglomerate when DeSantis aimed to secure authority over the Reedy Creek Improvement District (RCID), a governmental organization responsible for managing the area where the Walt Disney World resort is located.

Upon gaining control of the RCID, the governor restructured the entity as the Central Florida Tourism Oversight District and appointed five individuals to replace the previously elected members of the RCID. He contemplated the possibility of imposing taxes on Disney's hotels, implementing tolls on its roads, and even building a prison adjacent to Walt Disney World.

The Mouse Roars

Disney called DeSantis actions “anti-business” and last month sued him and his allies.

“A targeted campaign of government retaliation — orchestrated at every step by Gov. DeSantis as punishment for Disney’s protected speech — now threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights,” Disney said in a complaint filed in U.S. District Court for the Northern District of Florida.

The company has made it clear that future planned investments in Walt Disney World were on the line.

“Does the state want us to invest more, employ more people, and pay more taxes, or not?” Disney CEO Robert A. Iger said on a recent earnings-related conference call with analysts.

On Thursday, Iger and Josh D’Amaro, Disney’s theme park and consumer products chairman, pulled the plug on an office complex that was scheduled for construction in Orlando at a cost of roughly $1 billion.

It would have brought more than 2,000 Disney jobs to the region, with $120,000 as the average salary, according to an estimate from the Florida Department of Economic Opportunity. Disney currently employs more than 75,000 people in the state.

Disney had planned to relocate as many as 2,000 employees from Southern California, including most of a department known as Imagineering, which works with Disney’s movie studios to develop theme park attractions.

In his email to employees on Thursday, D’Amaro cited “changing business conditions” as a reason for canceling the Lake Nona project.

He noted that $17 billion was still earmarked for construction at Disney World over the next decade — growth that would create an estimated 13,000 jobs. “I hope we’re able to,” he said.

While the internal communication did not mention DeSantis by name, Disney's battle with the governor and his allies in the Florida Legislature figured prominently into the decision to cancel the Lake Nona project, according to sources who spoke to The New York Times on the condition of anonymity.

Representatives for DeSantis called the decision to nix the Lake Nona campus “unsurprising” and said it reflected the desperation of a company grappling with declining stocks and financial struggles. There is actually some basis of truth to that.

Disney's financial problems primarily stem from its streaming business, which is yet to turn a profit, and the decline in profit from traditional cable TV.

The company is in the midst of cutting 7,000 jobs?as CEO Bob Iger and other executives look to slice a total of $5.5 billion in costs to improve profitability, pay down debt and restore its dividend. Disney shares closed at about $94 on Thursday, down about 45 percent from two years ago.

The decision to scrap the development comes less than a week before DeSantis is expected to announce his presidential campaign.

On Friday, the editorial board of The Miami Herald wrote that national voters should take Disney's cancellation of the project as a warning, noting, "Floridians are the losers here. We've lost jobs and investment, and we could lose even more, all because DeSantis picked a petty fight with Disney."

Backlash From Fellow Republicans

Republican Mayor Francis Suarez of Miami has criticized DeSantis for his ongoing feud with Disney, labeling it a "personal vendetta" that has resulted in job losses and missed investments for the state.

Suarez said an initially agreed-upon issue of parental rights for young students has turned into what appears to be spite or personal vendetta, potentially costing the state 2,000 jobs and a billion-dollar investment.?

Suarez drew a parallel with President Joe Biden's cancellation of the Keystone pipeline, emphasizing that such decisions can harm American workers. He also questioned whether DeSantis' limited private sector experience influenced his approach to these matters.

Former President Trump said DeSantis is “being absolutely destroyed by Disney.”

“Disney’s next move will be the announcement that no more money will be invested in Florida because of the Governor,” Trump wrote on his social media platform Truth Social.?

Other possible 2024 Republican presidential contenders, including former New Jersey Gov. Chris Christie, former Arkansas Gov. Asa Hutchinson and former Vice President Mike Pence, have accused DeSantis of betraying conservative principles of limited government intervention.?

“I don’t think Ron DeSantis is a conservative based on his actions toward Disney,” Christie said. “Where are we headed here now that if you express disagreement in this country, the government is allowed to punish you?”

Hutchinson said something similar: "You don't use the heavy hand of government to punish a business."

And from Pence: “I just don’t believe it’s in the interests of the people of any state for a government to essentially go after a business that they disagreed with on a political issue.”

Their statements are supported by a 2022 Reuters/Ipsos poll that showed a bipartisan majority of U.S. voters oppose politicians punishing companies over their stances on social issues.

The two-day poll completed in April 2022 showed that 62 percent of Americans - including 68 percent of Democrats and 55 percent of Republicans - said they were less likely to back a candidate who supports going after companies for their views.

Stuck With Each Other

A leading expert on Disney World's history in Florida told BusinessInsider that the amusement park is tied to its Florida home, due to its expensive operations and sprawling size.

"They're stuck there," Richard Foglesong, the author of the book "Married to the Mouse: Walt Disney World and Orlando," told Insider. "And Florida is stuck with them."

While facilities such as factories can easily be moved, Walt Disney's World's sprawling, 27,520 acres made up of brick-and-mortar hotels, rides, stages, shops, and restaurants, is simply too vast, he said. The costs of building the new infrastructure would be astronomical.

Disney doesn't have the luxury of cutting off its investment in Florida, Foglesong continued. In fact, Disney plans to spend $17 billion in the state over the next decade.

Foglesong said that Disney did so because it must continually refresh its offerings, necessary given that?70 percent of visitors?to the theme park are returning guests.

My Take

If I were an advisor to a governor, any governor, R or D, I would tell him or her not to get into a pissing match with the state's largest single site private employer over social issues, especially when that company is poised to invest billions more and hire thousands more.

"Governor, curb your ego. Let it go. And for God's sake, don't try to punish a company because you disagree with it. You'll look petty and anti-business."

Who knows whether DeSantis received such counsel. But he could have taken the high road. "Ok, Disney, we agree to disagree on this one, but I appreciate your input."

But he has proved to be no pragmatist. Rather, he is an egotistical, angry, little man, an idealogue who will burn the house down to win an argument that frankly most people don't give a tinker's damn about.

In doing so, DeSantis has cost his state 2,000 jobs averaging $120,000 each. Alienating a major employer is not good economic development. It sends all the wrong messages.

DeSantis is expected to formally enter the race for the Republican Presidential nomination this coming week.

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