Here Are the Disney Criticisms That Are Fair…and Foul
Because of how popular the Disney brand is, the company absorbs a tremendous amount of rebuking.
Those sitting lower on the food chain throw rocks at the ones at the top of the mountain. It’s basic human nature.
Some of the attacks on the Walt Disney Company are valid, while others fail to pass the laugh test.
So, which of these are legitimate reasons to criticize Disney right now, and which ones are unfair assertions?
Many corporations have indulged in layoffs over the past calendar year.
Without turning the whole thing into a screed, let’s just say that I find the process frustrating.
For example, Google laid off 12,000 earlier this year and has hinted at more job losses to come. The company reported quarterly earnings of $69.8 billion.
Yes, a company pacing for nearly $280 billion in 2023 revenue has laid off thousands of employees.
With Disney, the numbers aren’t quite so dramatic, but they’re closer than you may realize.
Lost in the company’s most recent earnings headlines was the news that Disney earned $21.8 billion for the quarter, an increase of 13% from 2022.
For fiscal 2023, Disney is pacing 10 percent ahead of its record 2022 earnings of $82.7 billion. Yes, it should cross $90 billion in 2023 revenue.
Disney is currently laying off 7,000 employees to trim its budget by $5.5 billion.
The company has done this to protect itself against activist investor Nelson Peltz, who tried to force his way onto Disney’s Board of Directors.
The layoffs assuaged Peltz, who dropped his proxy fight. But now, thousands of Disney workers find themselves unemployed.
The blame on this one lies with failed Disney CEO Bob Chapek, but the company should never have reached this point. It’s totally fair to criticize them for this one.
Also, the optics of laying off thousands of people to mollify one billionaire aren’t great.
In 2022, Disney paid $89 million for Bob Iger, Bob Chapek, and Geoff Morrell alone. And you may not even remember who Morrell is!
That amount would pay for 1,500 jobs at a salary of roughly $60,000.
The Galactic Starcruiser Closure
Many people, myself included, were half-right and half-wrong about this one.
From the very start, some suggested that Disney had cut too many corners in building the small Star Wars Hotel.
Star Wars: Galactic Starcruiser offered only 100 rooms and lacked a surprising amount of standard hotel amenities.
For example, this place doesn’t even have a pool. I dunno if they’ve never seen Passengers, but pools are a thing on intergalactic cruise ships:
Anyway, the people who suggested that this place would fail immediately were initially wrong. I mean, dead wrong.
The resort operated at maximum capacity throughout 2022. Having worked in the hospitality industry since the mid-90s, I can tell you that this is rare.
Oddly, once the calendar turned to 2023, everyone stopped going. Like, it was uncanny.
A place that always sold out last year suddenly couldn’t drum up any business for the current year.
Disney canceled one of its weekly itineraries but then paused all bookings. Their behavior has led to memes like this one:
Now, Disney has decided that it would lose too much money by reducing the cost of a resort stay.
Since the current attendance levels cannot justify the expense, the Star Wars Hotel will close after 19 months in operation.
So, anyone who predicted a quick death is totally correct now, although they looked ridiculous a few months ago.
We could all get whiplash from the reversal of fortune at the Star Wars Hotel.
Still, much of this was avoidable if Disney hadn’t cut so many corners. During the pandemic, then-CEO Bob Chapek rushed the project.
Chapek desired more profitability and had dollar signs in his eyes about Galactic Starcruiser.
His short-term decision-making killed the long-term viability of the project.
Disney’s failure with this project is total.
Reedy Creek Paperwork
We won’t relitigate all the drama surrounding the Reedy Creek Improvement District.
You know, I know, and people living in places that don’t even have internet somehow know.
Still, the criticisms involving Disney’s Reedy Creek machinations are absurd.
When you’re placed in charge of a division of a company as culturally significant and powerful as Disney, you have a responsibility.
Your job dictates that you do everything possible to defend your company to the best of your ability.
Several people involved with Reedy Creek did just that. They meticulously studied the paperwork and recognized an opportunity.
Everything the Mouse did was perfectly legal and, in fact, necessary to defend itself against politically motivated actions by Florida representatives that many legal analysts deem unlawful.
The Disney workers wouldn’t be doing their jobs if they overlooked systemic advantages written into the Reedy Creek contracts.
I’ve got great news, everyone! Disney’s Direct-to-Consumer (DTC) division is losing less than $700 million a quarter now!
As ridiculous as that statement sounds, it’s factually correct. Iger and his team have reduced DTC losses by 56 percent in six months.
Now, the company is “only” losing a lot instead of a metric ton. Yay?
The explanation here stems from a course correction in mid-stream. Disney had planned DTC to be a loss leader until 2023 or 2024.
Once the company’s financial struggles showed on the balance sheet, Wall Street cried out in fury, forcing Disney to readjust on the fly.
Still, Disney deserves a lot of criticism for some of its panic-based decision-making.
Some of the recent decisions, like the removal of products from Disney+ and Hulu, aren’t great.
Here’s a writer from the Willow series on Disney+ calling the company’s decision “cruel.” You cannot blame the person for feeling disappointment.
Disney’s conversion into a digital company wasn’t ever going to be easy. It’s a new business model that seemingly works for Netflix and nobody else (yet).
A series of streaming setbacks have garnered negative headlines for Disney. Sadly, that will keep happening for a while longer as well.
This new industry lacks any finite rules. So, there’s a feeling out process underway.
Road bumps are a natural part of the process, as is the accompanying criticism.
Taking Positions on Social Issues
Recent criticism has centered on Disney’s taking a stance on various social issues, specifically the Don’t Say Gay legislation and the matter of representation.
First, we should acknowledge that history is repeating itself here.
As a company, Disney was among the first to offer benefits to the partners of gay cast members.
While a few other Hollywood businesses like Sony and Universal Pictures beat Disney to the punch, many analysts at the time pointed to the Mouse as the leader.
As the New York Times article from 1995 summarizes, “I think other people will say, ‘If it’s good enough for Disney, maybe it’s something we should consider…’”
In other words, Disney has led the charge on social issues and representation for many years now.
Such actions lead to priceless moments like this one:
However, they also come with no small amount of protest. Did you know the Southern Baptist Convention (SBC) called for a Disney boycott in 1997?
Nobody mentions that today because…it didn’t go well. The SBC wouldn’t technically drop the boycott until eight years later.
However, Disney never changed a single policy, and the boycott never impacted business.
On a seemingly unrelated note, Josh D’Amaro just explicitly stated that nothing involved with the Florida Feud has impacted Disney’s bottom line at all.
Meanwhile, even while Bob Iger was away from Disney, he chided Chapek for not taking a stronger stance against the legislation.
To Iger and his disciples, Disney owes a debt to society and must lead by example, especially on social issues.
Any criticism that suggests otherwise demonstrates a lack of knowledge of Disney’s history.
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