While Disney (DIS) is grappling with the consequences of Florida Gov. Ron DeSantis canceling the company’s special tax area, some experts say the dissolution may not even happen.
“I don’t think it’s very likely,” said Richard Foglesong, a Disney historian and author of Married to the Mouse: The World of Walt Disney and Orlando.
“Honestly, the consequences are too severe,” Foglesong added. “You are already seeing talks about the real price of this and who will pay. As it seems now, if you listen to our county officials, the price will probably be paid by the people who live here, and I do not. I do not think this will be a very popular idea, “he continued.
However, the bill was signed by Gov. DeSantis on Friday and, excluding any major traffic jams by lawmakers, will take effect in June 2023. Disney may also sue Florida for revenge in an attempt to thwart the law, despite that experts say the media giant is more likely to enter into negotiations to change the district’s terms.
View from the entrance to Walt Disney World on March 22, 2022 in Orlando, Florida. (Photo by Octavio Jones / Getty Images)
“Vatican with mouse ears”
Walt Disney World Resort is currently 40 square miles, known as Reedy Creek, a special tax district that has allowed Disney to operate as a self-governing unit since its inception.
This means that Disney controls all of its utilities and infrastructure, sets building codes, manages its own police and fire departments, and can expand and develop whenever it wants – all without the intervention of local or state government.
“I call it the Vatican with mouse ears, because it’s essentially the same kind of power that the Vatican has in Rome in Italy,” the historian said.
Therefore, the area (in addition to providing tremendous control and flexibility) saves the company tens of millions of dollars each year from certain taxes and fees.
The new solution will therefore force Disney to pay taxes on these government-funded programs; however, it also means that Reedy Creek’s $ 997 million bond debt and about $ 163 million in annual tax payments will fall on Orlando citizens.
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“I think wiser minds will prevail once they start looking at the consequences,” Foglesong suggested. “This bill was passed in 72 hours. The analysis of the bill, which was done in the state legislature, was about a paragraph long for each of the three bills that were considered, so we really don’t know what the financial impact will be. “
A woman wears Mickey Mouse ears with the colors of Pride during a pride parade of the LGBT community on June 26, 2021 in San Salvador, El Salvador. (Photo by APHOTOGRAFIA / Getty Images)
“Marriage for Economic Development”
The Disney-Orlando relationship is “a marriage of economic development,” Foglesong explained, adding that the state of Florida and the media and entertainment giant have rarely faced any problems before the Parental Rights in Education Act or what critics called the “No” Bill. say gay “.
The controversial bill, which will take effect on July 1, reads: “Classroom training by school staff or third parties on sexual orientation or gender identity cannot be conducted in kindergarten until 3rd grade or in a way that is inappropriate. for age or development for students by state standards’. Parents will be able to sue for violations.
Disney CEO Bob Chapek initially decided not to speak publicly on the issue, instead choosing to work behind the scenes in a bid to ease the law. It did not work out.
The executive eventually reversed after an intense reaction. He publicly condemned the act during the company’s annual shareholders ‘meeting on March 9, in addition to the employees’ direct apology in a company note.
The move to strip Disney of its self-governing status is largely seen as a blunt response to the company’s unfavorable response to the bill.
“Disney has usually managed to make its way with the state legislature. They made many contributions to the campaign [to] Republican lawmakers, but now they are in trouble with those same lawmakers, “Foglesong said.
“It really wasn’t about the power of the area to improve the Reedy Creek area. It was about freedom of speech and the fact that [Disney and DeSantis] “They do not agree on the issue of ‘vigilance’ with regard to LGBTQ rights,” he continued.
Amid the DeSantis virus drama, Disney has sent offers from other states with both a Texas judge and the Colorado governor, inviting Disney World to move its theme parks away from Sunshine.
Will it happen? Probably not. “I think they need therapy, not divorce,” Foggolsong joked.
Alexandra is a senior entertainment and food reporter at Yahoo Finance. Follow her on Twitter @ alliecanal8193
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