Who Is the Florida Feud Hurting: Disney or the Government?
Several mainstream news sites have asked variations of the same question.
Is the Florida Feud hurting The Walt Disney Company, especially at the theme parks, or is it hurting Central Florida more?
That’s a nuanced question that we may not answer completely for several years.
However, since people are wondering, let’s talk through what we know.
The Basics
We’re watching this debate occur across the internet, most recently in a CNBC article.
The author wonders whether Disney has suffered any financial setbacks due to its tiff with Ron DeSantis.
As a reminder, Disney didn’t ask for this fight and even recently requested mediation to find common ground.
In a predictable turn of events, DeSantis declined. His brand is anti-Disney, and he’s running for President of the United States right now.
Florida’s governor would appear weak if he settled with Disney after this brouhaha.
DeSantis isn’t an idiot, though. He knows he loses many of his cases in federal court and asked to delay Disney’s lawsuit until 2025.
As I pointed out and the editorial board of the Tampa Bay Times later agreed, those aren’t the actions of a confident man.
Still, most outside observers have accepted what I stated several months ago.
DeSantis will spend the next several months hammering on Disney, and even legendary CEO Bob Iger cannot do much about it.
If Disney sued for defamation, it’d face an uphill battle in court, even though that’s pretty much what the governor is doing.
At every turn, he is using the bully pulpit of his presidential campaign to defame Disney, most recently making allegations that aren’t even fit to print.
So, Disney finds itself playing defense until at least the end of the Republican primaries, which will likely be settled next March.
However, they could last until July 2024 or even through November 2024 if DeSantis turns around his flagging campaign and wins the Republican nomination.
Folks, Disney is in for a long year because it has punched a bully in the nose.
The Ways Disney Could Suffer
Let’s start with the obvious way that Disney has struggled since all this happened.
The incident started in February or arguably March 2022. At that time, Disney stock was worth roughly $130 per share.
Obviously, those numbers fluctuate, as does the overall market cap of Disney. Also, then-CEO Bob Chapek demonstrated shaky leadership.
I could argue that Chapek’s actions in other areas, especially streaming and theme park price increases, harmed the stock more than anything that happened with DeSantis.
Still, we must acknowledge that Disney stock currently trades in the upper 80s or low 90s, depending on the day.
That’s unlikely to change until Iger reports the next fiscal earnings in a month.
As a company, Disney’s market cap has unquestionably gone down since the Florida Feud began.
I’d argue it’s primarily a coincidence, but we should acknowledge this fact anyway.
At the parks, Disney attendance has recovered well in the wake of the pandemic.
The estimates for Disney attendance in 2022 demonstrated substantial growth from 2021.
Meanwhile, the Parks division’s revenue has increased per capita at a borderline unsustainable rate.
I’ll go ahead and call my shot right now that Disney probably drops a bit during one of the next two earnings reports in this area.
I say this because you can only maintain explosive growth for a short time. Disney’s Parks division is waaaaay overdue for a correction.
Also, you could make an argument that Disney films are more challenging to market right now.
Polling indicates that some (but a relatively small fraction of) conservative fans are taking the governor’s side.
They may be disinclined to give Disney money right now. Despite this fact, Disney is still dominating the box office.
A “failure” for Disney is often a success for other film studios.
Let’s Talk Numbers and Facts
In researching this article, I noticed something that alarmed me. The people of Florida have become collateral damage in the Florida Feud.
Earlier this year, Disney announced that it would cancel the planned Lake Nona headquarters, which the Mayor of Orange County called a “consequence.”
Thus far, Central Florida realtors and business owners claim that Lake Nona sales remain strong despite the sudden reversal.
That trend may continue as all property near Walt Disney World sustains its value. And optimists in Central Florida believe this might be for the best.
CNBC quotes a local real estate agent who indicates that the area gains “a little more breathing room” to develop its infrastructure.
So, I’ll paint Lake Nona as no loss whatsoever to Disney and one that doesn’t appear to have harmed Central Florida as of yet. That may still happen, though.
A subtle but pressing issue I cannot overlook is corporate tourism.
CNBC quotes the Chairman of the Chamber of Commerce for Dunedin, Florida, which happens to be DeSantis’ hometown.
According to this official, “he worries about Florida’s reputation in corporate America.”
That’s where the facts grow more alarming for Florida but have a ripple effect on Disney.
Several conventions have canceled previous plans for Central Florida events in the wake of the Florida Feud.
Recent examples include the National Society of Black Engineers and The Con of Thrones, a Game of Thrones event.
Between those two events, 20,000 tourists aren’t coming to Orlando because of the politics of Ron DeSantis.
According to the Orlando Sentinel, would-be conventioneers have canceled events as far ahead as 2027. Also, the NAACP has issued a travel advisory for Florida.
Meanwhile, Disney gets a pass entirely here. It’s not on them why these professionals and tourists are choosing other states to visit.
The Impact of the Florida Feud Isn’t Where You’d Think
We’ve got one other issue to discuss, one that indicates the Florida Feud is hurting the government more than Disney.
Orange County tourist tax collections dropped in consecutive months. This happened in April and May 2023 after 14 consecutive months of growth.
I don’t want to read an excessive amount into something that could be coincidental and/or misleading.
As I said earlier, sustained growth borders on impossible. That applies to tourist taxes as well.
Still, the Orlando Sentinel quoted the CEO of Visit Orlando on the subject of convention business. Here’s what they said:
“While the number of events at the Orange County Convention Center (OCCC) in May increased year over year, the groups were smaller, meaning less overall attendance…”
For the month of May, hotel occupancy fell 1.8 percent year-over-year.
So, fewer people are attending conventions in Orange County, even though the OCCC hosted more events.
Hotels registered fewer guests than during the same timeframe in 2022. And tourist tax collections are on the downswing.
Notably, the average cost for an Orlando hotel room has fallen from $232 in March to $186 in May. That’s a 25 percent drop in two months.
As a reminder, tourism should pick up as the summer approaches. This data indicates the opposite.
Is the Florida Feud Hurting Disney or the Government?
All these signs in combination add up to tourists reevaluating Central Florida travel plans in the wake of the governor’s frankly indefensible actions.
Meanwhile, the only negatives we can track at Disney right now are short wait times on July 4th.
When Disney reports its fiscal earnings on August 9th, that could change.
For the moment, Disney looks to be weathering this storm quite well.
Sadly, it’s the Central Florida government and related tourism businesses that are bearing the brunt.
For the reasons I mentioned, DeSantis cannot settle anytime soon, either. So, this problem will get worse before it gets better.
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