Disney caught in crossfire of ‘Don’t Say Gay’ row | Business News

The culture wars have torn the United States apart – and one of America’s biggest and most famous companies has been caught in the crossfire.

The entertainment giant Walt Disney is being punished for intervening in one particular cultural row.

Early last month, the state of Florida passed legislation restricting teaching about sexual orientation and gender identity in its schools, labelled ‘Don’t Say Gay’ by critics.

Bob Chapek, Disney’s chief executive, decided initially to keep his head down.

But this angered the LGBT community which argued that, as Disney is Florida’s biggest single taxpayer and one of its biggest private sector employers, it could have spoken out. Some employees walked out.

Possible boycotts of Disney and its services were discussed on social media and Disney’s three most important studios – Lucasfilm, Pixar Animation and Marvel Studios – all issued statements in support of the LGBT community.

Mr Chapek subsequently apologised for not publicly opposing the legislation, which he said he had lobbied against in private, promising to oppose similar legislation elsewhere.

Now Florida is hitting back.

Overnight it has passed a bill that would remove the special status enjoyed by Disney on the near 40 square miles of land near Orlando on which Walt Disney World sits.

The area, the Reedy Creek Improvement District, is effectively run by Disney with little interference from the state of Florida and frees it from certain taxes and regulations.

Disney is allowed to put up new buildings and extend its four theme parks and two water parks on the land without being governed by state regulations – and could even, if it were so minded, build a nuclear power plant there.

The district, hailed for the efficiency with which it has run, dates back to Disney’s arrival in Florida in 1967 and the desire of the company’s founder, Walt Disney, to operate with more freedom than it had been able to in California.

Not long after Disney’s death, in December 1966, a deal was struck to create the new district.

Under the legislation passed by Florida, any special district created before 1968 and not renewed since then would be dissolved in June next year, although Disney could seek to re-establish it.

The perception is that Disney is being punished by Florida for taking a stand against the ‘Don’t Say Gay’ laws.

Randy Fine, a Republican member of Florida’s house of representatives and an author of the legislation, did little on Thursday to remove that perception when he said Disney had “kicked a hornet’s nest”.

He told CNBC: “The state of Florida for 55 years has given Disney special privileges that its competitors down the street don’t get.

“Universal Orlando [which, like Sky News, is ultimately owned by Comcast] has three theme parks to Disney’s four – they don’t get the ‘Jurassic Park improvement district’ to regulate themselves. Neither do Legoland, or Sea World, or Bush Gardens. They seem to manage just fine.

“People have wanted to deal with this special district for decades but Disney had the political power to prevent it for decades.

“What’s changed is that by trying to bring California values to Florida, Floridians have said ‘alright, you’re a guest in our state, maybe you don’t deserve those special privileges anymore’.”

Mr Fine insisted this was not retaliation.

He went on: “We’re not just going after Disney – we’re going after every special district and there are six of them that were created before 1968.”

The move does, however, feel like the latest salvo in the culture wars.

Florida’s governor Ron DeSantis, who is seen as a possible Republican candidate in the 2024 US presidential election, confirmed as much in an email to supporters on Wednesday night: “If Disney wants to pick a fight, they chose the wrong guy.

“As governor, I was elected to put the people of Florida first, and I will not allow a woke corporation based in California to run our state.”

Ironically, Disney has supported Mr DeSantis in the past, donating $50,000 to his election campaign in 2019 and nearly $7,000 worth of benefits at its theme park. It gave him a further $50,000 last year.

Florida’s newfound hostility towards Disney will not come without a cost.

Reedy Creek has an estimated $1bn worth of bond debt that, were its special district status to be dissolved, would transfer to some 1.7 million residents in the neighbouring Orange and Osceola counties.

Mr Fine said this was true but said the taxes raised in Reedy Creek, which currently go to Disney, would also go to those counties and that they could even end up better off.

But the move may backfire on other ways. Florida has become a magnet in recent years for companies relocating to it from states levying a higher rate of tax – so this may deter businesses from moving there if they feel they will be punished for speaking out.

And that is something that is happening more frequently in the US.

Employees of big corporations like Disney, which carry huge heft, increasingly expect those companies to speak out on public matters – risking putting them at odds with some politicians.

Those companies are also, in many cases, having little choice in having to express opinions on public matters following a wave of motions at annual meetings being tabled by conservative groups.

One such group, the National Center for Public Policy Research, has not only targeted Disney.

Among other targets, it has urged the healthcare giant Johnson & Johnson to abandon anti-racism training and denounced the jeans giant Levi Strauss for “active discrimination” against men and white people.

It is a potential minefield for American corporates and their executives, especially in creative sectors.

Do they side with their liberal employees and risk incurring the wrath of conservative politicians? Or do they say nothing and risk losing some talented employees?

Not helping is the fact the politicians on both sides, taking a leaf out of Donald Trump’s book, are more willing to take on companies in a way they did not.

Mr DeSantis is a prime example, recently railing against the board of Twitter for its attempt to repel Elon Musk, who has criticised it for curtailing freedom of speech.

Companies on both sides of the Atlantic have long had to respond to attacks from the left. These days, certainly in the US, they are just as likely to face attacks from the hard right.

Sky News business presenter Ian King owns shares in both Comcast and Walt Disney