Disney Stocks Take a Plunge Amidst Reedy Creek Legistlation
At the close of the week, Disney stocks continued their decline on Friday opening at $120.04 per share down a dollar from Thursday’s close at $121.66. Walt Disney Company stock has plummeted 31% over the last year according to a recent piece in the Daily Mail.
For those following Disney financials, you’ll know that just under a year ago, Disney stock was at an all-time high and was trading at $200 per share in March 2021. With stocks now sitting at $121, that’s a 33% decrease.
One of the contributing factors of Disney’s trouble on Wall Street is connected to The Walt Disney Company’s current conflict with Governor Ron DeSantis which started when Disney vocally opposed the Florida Governor-backed “Don’t Say Gay” Bill.
The bill, which will be signed into law as of July 1st bans discussion pertaining to ‘sexual orientation’ or ‘gender identity’ in Florida schools for primary school children in kindergarten through third grade. Under the law, teachers seen in violation of this law can be sued by parents.
Disney has come out in opposition of the bill also announcing that they would suspend political donations in the state and added that they would openly support organizations working to oppose the bill.
DeSantis has retaliated in recent weeks by calling for the end of the Reedy Creek Improvement District which was passed by the Florida House on Thursday by a vote of 68 – 38. This means that Disney will no longer be able to operate as a self-contained government.
During a speech on Wednesday DeSantis said, ‘Disney and other woke corporations won’t get away with peddling their unchecked pressure campaigns any longer.” The Governor continued, ‘If we want to keep the Democrat machine and their corporate lapdogs accountable, we have to stand together now.’
The bill will bring an end to the 55-year old agreement that allowed Disney, through Reedy Creek, to regulate land, enforce building codes, and treat wastewater.
This is a move that could cost The Walt Disney Company millions. However, it could also mean that Orange and Osceola counties are also left with over $1 billion of debt.
Scott Randolph, the Orange County, Tax Collector, “There could be a financial fiasco for Orange County residents.” According to Randolph, Reedy Creek is responsible for $100 million in recurring costs and $1 billion debt obligation that now needs to be passed on to the taxpayers.
According to a recent piece on The Today Show the taxes could go up 25% percent for Orange County Residents.
Under the law that was just passed, the dissolution of the district will also cause financial hardship for Orange and Osceola counties where parts of Reedy Creek are located. Starting next year, the counties themselves would become responsible for Reedy Creek’s assets and liabilities as well as for providing the services previously handled by the district.
However, it should be noted that the legislation does leave open the possibility that arrangements similar to Reedy Creek could be reestablished at some point in the future.
As the piece in the Daily Mail tells us, the establishment of the Reedy Creek Improvement District was a crucial component of Disney agreeing to bring the theme parks to Florida. It gave Disney control over 27,000 acres back in the 1960s.
The current Reedy Creek Improvement District encompasses the cities of Bay Lake and Lake Buena Vista but is only home to about 100 local residents. Governing is done by a Board of Supervisors elected by landowners and NOT city residents.
Prior to the legislation, Reedy Creek oversaw environmental protections, fire protection, emergency medical services, water, sewage and waste management, flood control, electric power distribution and more! Reedy Creek also maintains all roadways and bridges in the communities.
Under the Reedy Creek arrangement Disney had carte blanche when it came to things like moving forward with architectural projects. Under the new law, Disney will need to seek approval from local governments before carrying out any construction projects.
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Source: Daily Mail