As Governor Ron DeSantis takes direct aim at the heart of Walt Disney World operations, the Walt Disney Company is enduring yet another post-pandemic public relations crisis in the form of an all out war with the state of Florida.
Before I dive in, the title of this segment is an obvious reference to a fantastic book called Disney War by James B. Stewart. It was published in 2005, and it dives into the internal corporate battles within the Walt Disney Company when Michael Eisner reigned as CEO. The book features interactions with many big Disney names, like Ron miller, Roy E. Disney, Frank Wells, Michael Ovitz, and Jeffrey Katzenberg, and it reads like a thriller. A book look Disney War would never get published today due to the access the author got to the internal workings of the company. That book led to my greater interest in the inner workings of the company, in addition to the movies and theme parks. Knowing that background and turmoil makes the current Disney news that much more interesting.
With regards to Disney’s very public current battle, I want to say that my aim here is not to get political, but instead, to chronicle this dispute that is sure to be in the headlines for months to come, and that could could change how Walt Disney World operates. What do I mean by political? Well, let’s just say the the new Disney War is outside the company (for now), and it is against Ron DeSantis—the governor of Florida.
How Did We Get Here? This all started with the recently-passed Parent Rights in Education bill in Florida, which has been referred to by critics as the “Don’t Say Gay” bill. When that was passed, Disney first endured a PR nightmare as a result of staying silent. Disney eventually publicly opposed the bill, incensing Governor DeSantis, along with other Florida lawmakers. In what can be seen as retaliation, the Florida senate introduced a bill that would dissolve Disney’s special improvement district, known as the Reedy Creek Improvement District—and any special district created before November 1968. That bill passed this past Wednesday. On Thursday, the Florida House of representatives also passed the bill, which was then unsurprisingly signed in quick order by Governor DeSantis on Friday. In what is characteristic of the Bob Chapek era, Disney so far has yet to publicly comment on this law.
So what does this mean for Disney World? Well, that requires a quick look into what is the Reedy Creek Improvement District?
- The Reedy Creek Improvement District, which I will now refer to as Reedy Creek, is essentially an independent government that gives Disney wide latitude over its operations at Walt Disney World. It is a a special purpose district created by Florida law back in 1967. After the law was passed, Disney started providing the municipal services for the region much the way a city would—services like water treatment and potable water production, wastewater services, electrical power, a fire department, maintaining public roads and bridges, and regulating something called the EPCOT Building Code. Interestingly, the EPCOT building codes are particular regulations regarding safety criteria for thrill rides and amusement attractions.
- The following description is on Reedy Creek’s website: “One of the busiest places in America, the District’s boundaries include: 4 theme parks, 2 water parks, 1 sports complex, 175 lane miles of roadway, 67 miles of waterway, the cities of Bay Lake and Lake Buena Vista, an environmental science laboratory where the continuity of water quality is monitored, an electric power-generating & distribution facility, a natural gas distribution system, water and wastewater collection & treatment facilities, a solid waste and recyclables collection & transfer system, plus over 40,000 hotel rooms and 100’s of restaurants and retail stores.”
I’ll add that everything Reedy Creek described is within Orange and Osceola counties, which is important for what I will touch on later.
There are two important takeaways about Reedy Creek’s unique legal designation:
- First, Reedy Creek is funded by Disney’s unique taxing of itself, which allows it to operate.
- Second, the special designation allows Disney World to operate and maintain logistical control over its park operations.
What Are the Implications? I am no tax expert, but according to some sources, if the law is implemented, Orange and Osceola counties would be charged with carrying out the municipal services currently provided by Reedy Creek. It also means that tax liabilities would need to be handled by another county, and in effect, its taxpayers. Those counties are Orange and Osceola counties.
Also important is its potential impact on Disney operations: Reedy Creek’s designations allow it to self govern, meaning it can quickly make changes to all of those municipal services without needing to follow ordinary permitting obligations imposed by the state. Basically, it could really slow down how Disney operates, what it can build or change, and how the parks and resorts operate. And in effect, how visitors experience the park.
Importantly, what appears to be missing from many headlines is the Florida statute 189.072. Apparently, Reedy Creek can either be voluntary dissolved, or, if not, as in this scenario, the dissolution must be approved by a majority of the residents of the district. So, despite the bill, a vote of the residents could determine the fate of Reedy Creek, and I assume they would support Disney. However, as a busy dad that reads other laws all day, I did not take the time to cull through the bill or the statute regarding voting, so it I am not certain the bill was drafted to somehow avoid that statutory requirement.
Big Takeaways and What’s Next:
- Time is of the Essence. As of right now, the law will take effect in June 2023—so no major changes at this moment in terms of operations.
- Disney could challenge this in court. Without going into too much detail, Disneyland has faced many similar battles with the city of Anaheim—I could maybe cover that in a bonus episode if anyone is interested in that. Should Disney decided to do so, things will get even more interesting—and I will of course cover it all here.
- Disney could take the wait and see approach. There is an election in November, and this could mobilize voters against DeSantis, which could impact this bill’s status. Disney could also wait to see how it plays out, maybe to see how the removal of the district could somehow be a benefit to its bottom line.
This is an unprecedented battle that threatens Walt Disney World’s operations and reputation. The fraught political battle between a company and state so inextricably linked is likely to populate the headlines for months to come. Watch this space for all you need to know about what Disney is going to do about Reedy Creek, and whether your park visit will be impacted.
