Disney Flips The Bird To Florida’s Ron DeSantis, Pulls $1-Billion Development Project
In the midst of its ongoing legal battle with Florida’s governor, Ron DeSantis, the Walt Disney Co (NYSE: DIS) has canceled plans to develop a nearly $1 billion corporate campus in Florida that would have employed 2,000 people.
In an email to staff on Thursday, Disney parks president Josh D’Amaro stated that “changing business conditions” caused Disney to reconsider its 2021 plan to shift employees, including its imagineers who develop theme park rides, to a new campus near Lake Nona.
According to the Orlando Sentinel, the business was slated to invest up to $864 million on the project, but latest price estimates have been closer to $1.3 billion, for a campus that would have functioned as a base for Walt Disney Imagineering and the Disney Parks, Experiences, and Products division.
“Given the considerable changes that have occurred since the announcement of this project, including new leadership and changing business conditions, we have decided not to move forward with construction of the campus,” D’Amaro wrote. “This was not an easy decision to make, but I believe it is the right one.“
Employees complained of Disney’s decision to relocate California-based Imagineering employees across the country, with many stating that they did not want to relocate to Florida.
Most of the impacted employees were furious about having to relocate, and some even quit, but Disney stood firm, thanks in part to a Florida tax credit that would have allowed the business to collect up to $570 million for developing and occupying the complex over a 20-year period.
Disney CEO Bob Iger has been systematically reversing his predecessor Bob Chapek’s decisions. In February, for example, he declared that Disney would overhaul its internal operations, thereby abandoning a framework established by Chapek. Iger shut down a 50-person metaverse project that Chapek had initiated in March as part of sweeping layoffs.
Disney is also in the process of reducing costs by $5.5 billion in order to enhance profitability, pay down debt, and reinstate its dividend.
Iger publicly questioned Florida’s interest in the company’s continued investment in the state a week ago. During a conference call with investors to discuss quarterly results, he stated that Disney employed over 75,000 people in Florida, that Walt Disney World drew millions of visitors each year, and that the company planned to invest $17 billion to expand the resort over the next decade.
“Does the state want us to invest more, employ more people and pay more taxes, or not?” Iger asked.
According to Jeremy Redfern, DeSantis’ press secretary, while Disney announced the prospect of a Lake Nona campus nearly two years ago, “nothing ever came of the project, and the state was unsure whether it would come to fruition.”
“Disney announced the possibility of a Lake Nona campus nearly two years ago. Nothing ever came of the project, and the state was unsure whether it would come to fruition. Given the company’s financial straits, falling market cap and declining stock price, it is unsurprising that they would restructure their business operations and cancel unsuccessful ventures,” said the spokesperson’s statement.
Disney and DeSantis have been at odds since March 2022, when Disney’s then-CEO Chapek denounced legislation in Florida that would limit discussion of gender identity and sexuality in elementary classrooms.
DeSantis, who is anticipated to announce next week his candidacy for the Republican presidential nomination in 2024, then attempted to deprive Disney of its long-standing self-governing control over Walt Disney World in Orlando. The governor said that “woke Disney” should not be treated differently in the state.
The entertainment giant filed a lawsuit in April against the presumptive Republican presidential candidate, alleging that he had subjected the company to a “targeted campaign of government retaliation.”
The entertainment conglomerate wants a court to quash the state’s efforts to manage Walt Disney World in Orlando. The complaint was filed only minutes after a DeSantis-appointed monitoring board voted to overturn February agreements that permitted the firm to develop the theme park while maintaining control over adjoining properties.
The development was quickly seized upon by Donald Trump’s 2024 presidential campaign, with the Trump War Room account tweeting that DeSantis’ actions cost the state jobs and investment.
Former Miami Republican congressman Carlos Curbelo complimented DeSantis’s leadership during the outbreak, but claimed the governor was ruining his own record and discouraging businesses from coming to Florida or growing in the state.
California Gov. Gavin Newsom, who seems to be elated by the news that Imagineering employees will be staying in his state, thanked Disney for “doing the right thing.”
May the force be closed in Orlando
The company also announced Thursday that it would close its immersive Star Wars-themed luxury hotel in Orlando in September, less than two years after it opened, as the media conglomerate reduces expenses across its entertainment and parks operations.
Star Wars: Galactic Starcruiser, one of Walt Disney World’s newest and most exciting attractions, will close at the end of September.
Depending on the number of individuals in their party, guests pay between $4,800 and $6,000 per person for the complete two-night event.
The concept had been marketed as more than just a hotel stay with sci-fi embellishments. “Voyages” include not just two nights of housing, but also all meals, programming, entertainment, and unique access to the Hollywood Studios theme park in Orlando, Florida’s Galaxy’s Edge district.
“Star Wars: Galactic Starcruiser is one of our most creative projects ever and has been praised by our guests and recognized for setting a new bar for innovation and immersive entertainment,” Disney said in a statement. “This premium, boutique experience gave us the opportunity to try new things on a smaller scale of 100 rooms, and as we prepare for its final voyage, we will take what we’ve learned to create future experiences that can reach more of our guests and fans.”
When asked why the attraction was closing, a Disney spokesperson stated that it was “a business decision” but did not clarify.
Disney last traded at $91.61 on the NYSE.
Information for this story was found via The New York Times, CNN, The Guardian, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
