Florida’s Republican Gov. Ron DeSantis is moving forward with his plan to remove the special legal status that has allowed Walt Disney World to operate for more than 50 years as an autonomous government entity, free of nearly all state and local oversight and with the power to levy its own tax-free municipal bonds.
The bill follows the Florida legislature’s overwhelming approval in April 2022 of a measure that’s set to dissolve, as of June 1, the self-governing arrangement complete with tax breaks the legislature had created for Disney in 1967 as an incentive for Disney to choose central Florida for its East Coast operations.
Disney seems to be paying the price—a steep one—for its fatal mistake of jumping onto what has been called the “woke capitalism” bandwagon that has captivated much of corporate America in recent years. In Disney’s case, it was then-Disney CEO Bob Chapek’s vow to help repeal a Florida parental-rights law enacted in March 2022, dubbed by its opponents the “Don’t Say Gay bill,” that forbids classroom instruction or discussion about sexual orientation and gender identity for youngsters below fourth grade in public schools. Chapek pledged that Disney would donate $5 million to organizations working to undo the law or have it overturned in court.
Until not long ago, American businesses shied away from taking sides on controversial issues, especially controversial social issues such as abortion, radical feminism, and LGBT causes. They were reluctant to alienate portions of their customer base with strong feelings one way or the other.
But then, toward the end of the last decade, many companies did an abrupt about-face. It might have been an effort to appeal to Millennial and Zoomer potential customers said to be hyper-alert to progressive social-justice concerns—or to pressure from the corporations’ own woke employees. One of the frontrunners was Nike, which in 2018 launched an ad campaign featuring Colin Kaepernick, who, as a San Francisco 49ers quarterback, had “taken a knee” as a protest against perceived racism instead of standing during the performance of the national anthem. Sales of Nike’s sportswear jumped by 31 percent, despite a threatened Nike boycott. In 2019, Gillette tried to boost its razor sales by attacking “toxic masculinity” and embracing the #MeToo movement.
Furthermore, it seemed as though corporations could—or at least were willing to—cause real economic damage to states that bucked the woke agenda.
In 2016, North Carolina enacted a “bathroom bill” that requires people to use public restrooms that correspond to their biological sex. The NBA relocated its 2017 All-Star game out of Charlotte, and major businesses such as Dow Chemical, Bank of America, and American Airlines issued condemnations. Other states considering similar restroom legislation seemed to back off.
Disney’s problem in Florida is that, unlike other corporations doing business in the state, it stands to lose far more than it might have gained from Chapek’s dragging it into the political fray. During the early 1960s, Walt Disney, using dummy corporations, had bought up about 40 square miles in central Florida’s Osceola and Orange counties, much of it swampland that was useless even for agriculture. He offered the state a deal: Disney would provide infrastructure—roads, utilities, water, sanitation, and police and fire services—for the huge tract in return for Reedy Creek’s nearly complete autonomy, which included the power to levy its own taxes and exemptions from zoning and building codes. It was an arrangement that critics over the years have decried as egregious corporate welfare unavailable to Disney’s competitors in the theme park, resort, and cruise businesses in Florida. And it was an arrangement that the state legislature could revoke at any time—as it seems to be doing now.
In November, Chapek resigned amid tumbling Disney stock prices as some of its film ventures into wokeness failed at the box office. He was replaced by his predecessor, Bob Iger, who had presided over soaring Disney profits from 2005 to 2020. Iger’s more diplomatic presence may soften relations between Disney and Florida’s Republicans—although there are no signs yet that DeSantis will backtrack.
But the real lesson of the Disney debacle may be one that other companies seem to be gradually learning: While it may make for good press among progressives and the liberal media to jump in on the woke side of high-profile social issues, interfering with localities’ efforts to solve their own political problems can exact a high cost.
