Disney and the CFTOD Have Finally Made Peace

After three years of childish slap-fighting, The Walt Disney Company and Florida’s government have finally grown up.

The two parties just did what they should have done at least 18 months ago.

They agreed to a compromise deal that resets the Disney rules back to 2020.

Thankfully, Disney and the CFTOD have finally made peace.

Here’s what you need to know and what it implies about Disney’s future.

Disney and DeSantis Declare a Truce

As first reported by The Daily Mail, Disney has dropped its state lawsuits against Florida and the CFTOD.

The fact that the story went to The Daily Mail first is telling. DeSantisWorld is famous for this particular tactic.

When the governor faces a headline that may embarrass him, his team leaks the story first to a friendly publication.

Then, this group makes the headline and writing appear hugely positive in DeSantis’ favor.

I’ve joked about the tactic at least three times while covering this story, but this one’s a shade different.

DeSantis and his team have a reason to feel good about this matter.

According to the agreement in place, the Central Florida Tourism Oversight District (CFTOD) will remain.

Had Disney won its lawsuits, it would have reset the district back to its former status as Reedy Creek.

Of course, from Disney’s perspective, what’s in a name?

The agreement that the parties just reached heavily favors Disney in that it resets the rules of governance to 2020.

In other words, we just spent three years tracking a blood feud between DeSantis and Disney.

After all that bluster, the previous Reedy Creek will operate with its 2020 rules in place, as if none of this had happened.

That interpretation is a bit glib in that the CFTOD still exists, which is not nothing.

However, the land and zoning rules in place will reset to the year before the Florida Feud.

Yes, we all wasted our time on what has proven to be much ado about nothing.

How This Happened

I wrote this piece on March 14^th, and it went live a few days later.

That’s how long I’ve awaited this announcement. Yes, I’ve known or at least expected a resolution for two weeks.

When Florida announced that Glen Gilzean would leave the CFTOD for a different role, my Spidey Senses tingled.

Soon afterward, one of Disney’s harshest critics on the CFTOD, Martin Garcia, left the board.

Speculation ensued about how willingly Garcia exited, with the prevailing belief that it wasn’t his choice.

Replacing Martin Garcia (Tampa attorney/fundraiser) with Craig Mateer (Orlando entrepreneur/DeSantis megadonor) as the chair of the board overseeing Disney feels like an unofficial part of the settlement.

Mateer was a longtime Disney contractor (ran a luggage-handling service). https://t.co/PJ5Y1EtGur

— Jason Garcia (@Jason_Garcia) March 27, 2024

That’s Jason Garcia, formerly an investigative reporter at the Orlando Sentinel, who now writes for his own Substack.

He’s drawing the same conclusion as I did last week: When DeSantis announced the CFTOD, he declared war.

The very bylaws of this organization prevent people from having theme park experience.

Just in terms of proper governance, that aspect reflects a dangerous precedent on many levels.

Not coincidentally, turnover at the former Reedy Creek has been ridiculously high, with morale at a historical low due to things like this.

The tide turned with the announcement that Stephanie Kopelousos would replace Gilzean.

As I previously detailed, she’s an agreeable choice for both sides, not just DeSantis.

While Kopelousos is unmistakably a part of DeSantisWorld, she also worked closely with Disney on several occasions.

Most notably, the attorney created the language for a signed Florida bill that included a Disney carveout.

Her emails from that negotiation are a matter of public record, and she basically wrote the law as Disney requested.

In other words, Disney has ample reason to trust and respect Kopelousos. That…wasn’t the case with Gilzean or Garcia.

At the time, the Kopelousos announcement felt like an olive branch, and now we have an agreement in place.

About the Agreement/the CFTOD

We’re on day one of this agreement, which means people like me are making calls to find out what transpired behind the scenes.

All we can and should do at the moment is discuss the facts. Everything is speculation, and I’ll engage in a bit of that later.

The first known is the most valuable one for DeSantis. His CFTOD will remain in place.

That’s a win for DeSantis no matter how anybody slices it, but it’s also potentially a Pyrrhic Victory.

As I referenced in the previous article, DeSantis settled a similar matter involving the so-called Don’t Say Gay legislation.

In short, Florida students can go right back to saying gay. But the law remains on the books.

The governor may point to that as a legislative victory on his resume, even if it’s toothless.

Similarly, the CFTOD will exist. However, the form in which it exists is what matters to Disney and its many fans.

Specifically, Disney ostensibly cedes self-governance, the win DeSantis wanted.

Conversely, the CFTOD gave up something arguably more valuable in the process.

Disney pulled off its Reedy Creek masterpiece in rewriting its own laws in 2022 and thereby established the King Charles III clause.

CEO Bob Iger and his team did that as a form of self-defense against the CFTOD.

The modified rules basically gave Disney indefinite control over its own land, something it didn’t need while working with a reasonable government.

Now, Florida and Disney have achieved détente by agreeing that Disney will drop the 2022 updates entirely. They’re null and void.

Instead, the rules will reset to 2020, the time before all this nonsense started. Thus, Disney regains everything it had.

The only difference is that the CFTOD remains, with some of its board members remaining antagonistic.

What’s the Next Step in the Compromise?

Behind the scenes, the parties will work together to hammer out a new Reedy Creek agreement.

That task should be easier because the CFTOD also named a new member to replace Garcia. It’s Craig Mateer.

That’s another fascinating wrinkle to this soap opera, as Mateer is a noted financial backer of DeSantis and the Florida GOP.

However, Mateer is also a tycoon in the baggage industry who has contracted with Disney on many occasions.

In short, Mateer and Kopelousos represent familiar faces for Disney rather than clueless people with zero experience in the theme park industry.

Suddenly, members of the CFTOD are saying things like “…we are eager to work with Disney.”

That’s a drastic change from 2022’s “DIE, YOU WOKE COMPANY, DIE!!!” Call it progress.

Now, Disney and the CFTOD will bargain behind the scenes to create a new Reedy Creek agreement.

Disney has kept an ace in the hole, as it only dropped its state lawsuits against the CFTOD.

The federal lawsuits are on pause, with Disney having lost the first round but an appeals court hinting at a quick reversal.

Here’s what Disney said about that federal case:

Regarding on ongoing federal lawsuit the settlement agreement reached Wednesday said Disney will ask to delay that case “pending negotiations among other matters of a new development agreement between Disney and the District.”

— Gary Fineout (@fineout) March 27, 2024

That’s the company’s way of hinting, “We’re holding off until we see what happens next.”

In other words, Disney knows its federal lawsuit provides leverage while negotiating terms for its Reedy Creek land.

You can safely expect the modified terms to favor Disney, as they should. It’s the biggest rainmaker for the Sunshine State.

Disney and DeSantis

Meanwhile, DeSantis hosted a press conference today wherein his comments were…unusually conciliatory.

The man who tried to build his political career as an anti-Disney firebrand said the following:

“I just think with the new Universal park, I mean I think it’s just gonna be a huge game changer.

It’s bigger than their other two parks combined. I mean like imagine that footprint, that’s pretty huge.

And so I gotta think that Disney would wanna answer that to be able to kinda keep up with the competition.”

Sure, that’s a passive-aggressive comment favoring Universal Studios, whose corporate owners back DeSantis financially. But it’s still telling.

DeSantis has lost in his attempt to become POTUS. Now, he’s left trying to build his Florida bona fides again.

The governor recognizes that his anti-Disney crusade didn’t win him many votes and arguably cost him even more.

So, he’s now compromising and indicating that he’s invested in Disney’s future growth. That…is a dramatic turnaround in a year.

What Happens Next

We still have a next step in this process, which is the actual negotiation between the CFTOD and Disney.

With Kopelousos in charge of that conversation, I expect it to go relatively smoothly.

In fact, I suspect that the parties have largely brokered a deal already, which would explain a lot.

Recently, Disney filed the paperwork for what looks like the start of a large-scale project at Disney’s Animal Kingdom.

I’d previously argued that the company was smart to kick the can down the road on expansion in the aftermath of a frustrating D23 Parks Panel.

The uncertainty of the Florida Feud prevented Disney from going all-in in 2023.

Over the past month, a different energy has emerged within Disney, one that executives aren’t even trying to hide.

I would describe the current vibe as, “WE’RE DOING THIS!!!”

I’d expected an announcement of upcoming projects at the 2024 D23 Expo.

In fact, some sort of reveal at the Annual Shareholder Meeting wouldn’t surprise me now.

I’m not expecting such a scenario as the past five years of Disney have trained me not to expect the best, but it’s possible.

None of that could have happened, at least not comfortably, without a resolution to the Florida Feud.

So, I suspect Disney and Florida’s government have already worked out the broad strokes of their compromise.

And the only real loser here is Martin Garcia. Everyone else has come out of this in better shape.

I will say this, though. If Iger also loses the Nelson Peltz vote next week, he’ll face a new wave of headlines like this one.

Hilariously, Disney stock closed at $120.98 today, which is its highest since mid-April 2022. Yes, it’s almost a two-year high.

People might just be happy this nonsense is over. I know I am.

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