Last week, Walt Disney Company announced the decision to cancel a $1 billion investment in Lake Nona, Florida, and scrub relocation plans for 2,000 employees who were slated to work there. Disney’s announcement of the decision was masterful. They pointed the bony finger of blame at Florida Governor Ron DeSantis, and then did a “mic drop,” knowing that their vast media echo-chamber would amplify the voices of DeSantis’s natural political opponents. Their goal: get people to ignore the company’s ongoing business struggles to focus instead on the rhetorical stick-in-the-eye delivered to DeSantis.
Some think it worked, and that it serves DeSantis right to get blamed for Disney’s decision.
But let’s not get too hasty. It’s worth noting that most of Disney’s woes are their own doing, and have nothing to do with DeSantis or Florida Republicans. Over the last two years, the company launched a trio of major box office bombs that lost around $311 million (Strange World, Amsterdam and Lightyear), while at the same time, Disney lost $2.1 billion on its combined streaming platforms at Disney+, ESPN+ and Hulu. The compounding problems had already created such a financial pinch at Disney that last fall, then-CEO Bob Chapek announced the company was laying off up to 7,000 employees, initiating a hiring freeze, and looking for other ways to cut costs.
At the time the layoff announcement was made, Chapek made no mention of his company’s skirmish with Florida over their special district status.
Fast forward to this year: just two weeks ago, the company’s stock plummeted 9 percent after news broke that Disney+ lost 4 million subscribers and another $400 million in just the first quarter of the year. They also announced that their Star Wars: Starcruiser hotel will be closed only 18 months after it was launched.
Taken together, it appears that Disney has lost its magic, and that isn’t Ron DeSantis’s fault. The fact is that the once-admired company’s financial struggles are real and they exist independently of DeSantis’s policies in Florida.
That said, before anyone feels sorry for DeSantis being unfairly branded as the scapegoat for Disney, they shouldn’t. For the last two years, he’s been angling for just this sort of political scrum over his policy stances. It finally arrived in earnest on Thursday, when the proverbial chickens came home to roost. Given the political environment, even the most casual observer could have predicted that Disney would blame their business woes on DeSantis and Florida Republicans.
Just as obvious is the fact that no business leader in a company facing financial hardship, while simultaneously getting kicked in the face by a state governor, is going to continue making substantial investments in that state.
DeSantis would have undoubtedly preferred to have Disney’s Lake Nona campus and 2,000 more jobs in Florida. But it’s a political price he’s willing to pay because it gives him a platform upon which to make his case for the GOP nomination for president – an endeavor that he’s expected to embark upon as early as this week.
The fight with Disney is exactly the sort of thing that helps DeSantis stand out from other GOP presidential hopefuls – including former President Donald Trump – and gives him a platform upon which he can talk about Florida’s business climate, while brushing off the anti-business criticisms by pointing out they are generally isolated to Disney.
Consider the fact that few other presidential contenders can rattle off the business wins like DeSantis. Florida has consistently ranked at the top of virtually every measure of business climate friendliness:
- The Tax Foundation ranks Florida 4th for its business tax climate.
- Business News Daily places Florida as 4th in the nation for small businesses
- The Business Observer deems Florida 2nd in the nation for starting a small business.
- IRS data, courtesy of the Florida Chamber of Commerce, shows Florida leading the nation in net income migration, gaining $39.2 billion over the past year.
- U.S. Census data reveals Florida had the highest population growth rate over the last decade at 14.6%.
- CEO Magazine again ranked Florida the #2 state in the nation behind Texas, despite the Disney dustup.
That last point is worth a deeper dive: even when factoring in the Disney dustup, business leaders still say Florida is one of the best states for business.
Also, as the Disney-DeSantis saga unfolds, other significant business investments in Florida continue unabated. BlackRock, the world’s largest money management company, and a previous target of Republican criticism for its ESG investing strategies, is opening an office in South Florida. Additionally, BlackRock is assisting AT&T with a “super-fast” fiber-optic rollout in Florida, one of just five states chosen in the early phase of the project.
The bottom line is that DeSantis has more than enough ammunition to counter the narrative that he’s “anti-business.” He appears to be very much “anti-Disney,” and new (old) CEO Bob Iger has every right to pull the plug on the company’s plans to move employees to Florida based on how Iger perceives his company’s been treated.
But the underlying reasons for Disney’s cancellation of the Lake Nona project has far more to do with Disney’s own internal problems than anything DeSantis did. The very public fight just gave Disney an easy excuse upon which to blame their troubles.
For DeSantis, being a pro-business candidate is important. But being the lone anti-Disney voice in a GOP primary is a political gold mine. Whether or not Desantis can overcome the Disney PR machine and the attacks that will be leveled against him by other GOP contenders in the coming months remains to be seen. It’ll be up to DeSantis to defend himself, and in the process, make the case for Florida.
It’s exactly the battle he asked for.