Disney vs. DeSantis: As Florida Senate votes to hit House of Mouse, industry experts react
Florida state senators today voted to approve a proposal by governor Ron DeSantis to repeal special tax and self-governance rights for the Walt Disney Company. The proposal, levied in response to Disney’s opposition to the state’s recently-passed and highly controversial ‘Don’t Say Gay’ bill, could impose millions more in taxes on the corporation and disrupt the local economy. Political strategists and PR pros weigh in on how Disney will be impacted if the bill passes in the state house and whether political activism is worth the risk for brands.
Florida state senators today voted in favor of a bill proposed by Republican governor Ron DeSantis that takes aim at Disney’s special tax status within the state. The bill seeks to repeal a 1967 deal between the state of Florida and Walt Disney Co that has preserved certain special rights for the corporation, including self-governance of its properties within the state as well as major tax exemptions. Now, the bill will head to the state House for consideration. If it passes, the media and entertainment giant could lose much of its autonomy in Florida — which would mean it will be on the hook for millions more in taxes annually.
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Disney could be on the hook for millions more in taxes if DeSantis' bill is passed in the Florida state house
DeSantis, who many believe is after the 2024 Republican presidential nomination, proposed a bill to repeal the law — which is known as the Reedy Creek Improvement Act — after criticizing the corporation for weeks over its condemnation of the recently-passed ‘Don’t Say Gay’ bill. The bill bars the teaching of gender issues to students younger than third grade in Florida. DeSantis’ proposal was subsequently taken into consideration by a group of policymakers in Tallahassee in a special legislative session on congressional redistricting.
At a press conference yesterday, DeSantis said, “We are expanding the call of what [lawmakers] are going to be considering this week... so, yes, they will be considering the congressional map, but they also will be considering termination of all special districts that were enacted in Florida prior to 1968, and that includes the Reedy Creek Improvement District.“
This afternoon, the Florida state Senate voted 23-16 in favor of repealing law. The bill will now move to the state house for consideration. If the measure is passed in the house as well, Disney’s abilities to operate a private government over its 27,000-acre special district will be thrown into question. At its worst, the repeal of the law could send major shockwaves through central Florida’s economy. It may put taxpayers in Florida's Orange and Osceola counties on the line for the district’s debt (which, per a 2021 Reedy Creek Improvement District financial filing, is close to $1bn). It’s also worth noting that Disney employs more than 60,000 workers in Florida.
“This is not supposition; this is not conjecture — this is Florida law that says those 1.7 million people are going to have to pick up this bill,” said the state’s Senate minority leader Democrat Gary Farmer on Tuesday.
The high stakes of brand purpose
In recent years, pressure has mounted on corporations to take purpose-driven approaches, which often equates to taking a stance on social and political issues — not only in their communications, but with their dollars. What was once taboo is now par for the course. But now, when corporations take a stand on controversial issues like Florida’s ‘Don’t Say Gay’ bill, they have both more to gain and more to lose than ever before.
“Disney is in between a rock and a hard place,” says Dr Karen Freberg, an associate professor of strategic communication at the University of Louisville and an expert in marketing and public relations. “[Young] audiences and gen Zers are looking for brands who are more active on issues. And then there are other audiences that want brands to not voice their political views. In any case, they are going to make someone unhappy with where they stand. This has been a challenge for brands — not just Disney — the past few years.”
It’s hard to forget controversies like those brought on by Nike’s 2018 ‘Dream Bigger’ ads starring Colin Kaepernick (who the brand reportedly almost dropped before running the campaign), which alluded to the former 49ers quarterback’s kneeling protests of the US National Anthem. The campaign sparked widespread boycotts — but also generated some $6bn in revenue for the sportswear brand.
The repeal of the Reedy Creek Improvement Act may spell trouble not only for Disney, but possibly for other corporations, too. “If this does get passed, Disney will be facing more expenses to their bottom line than they’ve experienced in their 50 years of history,” says Freberg. “If this is passed, it will be interesting to see what precedent this sends to other similar entities who have received similar benefits.” Though neither Universal Studios nor SeaWorld have similar arrangements under Florida law, corporations like these may be on edge about potential disruptions to their tax statuses.
Some PR pros suggest that Disney did right by opposing ‘Don’t Say Gay.’ “Companies big and small need to take a stand and do what is morally the right thing. As such, especially with a company of Disney's size and reach, they have a responsibility to engage in conversations that affect society as a whole,” says Sami McCabe, the founder and chief executive at PR firm Clarity. “If they can exert their considerable influence to give a voice to a marginalized community, they should — even if it has a negative commercial impact in the short term. Ultimately, doing the right thing will benefit Disney commercially, because consumers are demanding it from the brands they buy from.“
Others hold fast to the long-standing belief that it doesn’t behoove business to get involved in politics. “Corporate social responsibility is all well and good, but politics have no place in managing a brand,” says Robert Passikoff, founder and president of market research firm Brand Keys. “The values that drive consumer behavior for brands never include political views.”
Passikoff suggests that the reasons behind Disney’s choice to speak out against ‘Don’t Say Gay’ had little to do with a real political intent — and more to do with social pressure. “Disney’s employees forced the company into a corner.” He suggests: “Those same people should take a stand at the voting booth.”
Still, others are wary of DeSantis’ retaliatory approach as a whole. “I'm hesitant to defend corporations and their rights, but I do believe that this is part of a comprehensive approach by DeSantis to stifle any sort of dissent — whether it's throwing reporters out of press conferences or retaliating against corporations for taking a stand against hateful legislation,” says Tim Lim, a political strategist, PR consultant and partner at creative agency The Hooligans. “DeSantis and the state GOP leadership are threatening corporations into staying silent, but it will be hard to influence corporations like Disney that have larger numbers of employees who will demand action. The biggest instigator of change at these corporations are the employees themselves.”