Bob Iger asks if Florida wants Disney to 'invest more, employ more people, and pay more taxes, or not?'

May 10, 2023 in "The Walt Disney Company"

Posted: Wednesday May 10, 2023 5:09pm ET by WDWMAGIC Staff

During this afternoon's quarterly earnings call, Disney CEO Bob Iger was asked how investors should think about the risk in both near-term and long-term business for Disney during the ongoing dispute with Florida Governor Ron DeSantis.

In a passionate response, a clearly frustrated Iger went into more detail about Disney's fight against Florida and gave more insight into special districts, tax, Disney's contributions to the state, and his view that Disney is being punished for speaking out against DeSantis' political policies.

Here is a transcript of his comments.

Regarding Florida I have got a few things I want to say about that, Phil. First of all I think the case that we filed last month made our position and the facts very clear and that is really that this is about one thing and one thing only and that is retaliating against us for taking a position about pending legislation. And we believe that in us taking that position we are merely exercising our right to free speech. Also this is not about special privileges or a level playing field or Disney in any way using its leverage around the state of Florida. But since there's been a lot said about special districts and the arrangement that we have I want to set the record straight on that too. There are about 2000 special districts in Florida.Most are established to foster investor development where we were one of them. He basically made it easier for us and others, by the way to do business in Florida and we built the business that employs as we said before, over 75,000 people, and attracts tens of millions of people to the state. So while it is easy to say that the Reedy Creek special district that was established for us over 50 years ago benefited us, it is misleading to not also consider how much Disney benefited the state of Florida. And we are also, we are not the only company operating a special district. I mentioned 2000 for the Daytona Speedway, it has one. So do the villages which is a permanent retirement community and there are countless others. So the goal here is, if the goal is leveling the playing field in the uniform application of the law or government oversight of special districts needs to occur or be applied to all special districts. There's also a false narrative that we have been fighting to protect tax breaks as part of this. But in fact we are the largest taxpayer in Central Florida paying over 1.1 billion in state and local taxes last year alone. We pay more taxes specifically more real estate taxes as a result of that special district. And we all know there was no concerted effort to do anything to dismantle what was once called Reedy Creek special district until we spoke out in the legislation. So this is plainly a matter of retaliation while the rest of the Florida special districts continue operating basically as they were. I think it's also important for us to say our primary goal has always been to be able to continue to do exactly what we have been doing there, which is investing in Florida. We are proud of the tourism industry that we created and we want to continue delivering the best possible experience for guests going forward. We never wanted and we certainly never expected to be in the position of having to defend our business interests in federal court, particularly having such a terrific relationship with the state as we have had for more than 50 years. And as I mentioned on our shareholder call we have a huge opportunity to continue to invest in Florida.I noted that our plans are to invest 17 billion over the next 10 years, which is what the state should want us to do. We operate responsibly. We pay our fair share of taxes. We employ thousands of people and by the way we pay them above the minimum wage substantially above the minimum wage dictated by the state of Florida. We also provide them with great benefits and free education so I'm gonna finish what is obviously kind of a long answer by asking one question. Does the state want us to invest more, employ more people and pay more taxes or not?

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josiah mazelin11 days ago

I said basically. You just listed two rides at each park. My point is proven

Goofyernmost12 days ago

With the kind of promotion that they once were famous for were to be used, they can get all the hype they need and spend a hell of a lot less to do it. They have to make what they have be exciting and not worry about what others might be doing. They stayed on top for about 60 years doing that and then, I assume to give bigger bonuses to the executives, they stopped producing those things and even if they don't admit it, they are running scared at the moment, in spite of increased profits. They have to make that dominance last, but I don't see them doing that unless they fill up those empty buildings and put something good in them and promote, promote, promote. That is second only to location, location, location.

Sirwalterraleigh12 days ago

Galactic spirit Halloween was sorta in that ballpark

Sirwalterraleigh12 days ago

Nah…they’ve crossed the Rubicon on “attracting middle class families”. They’re well past that price point to make any such endeavor turn out to be anything but a “loss” to the stock wonks. That strategy was their philosophy for many years…expansion to create more traffic and sell more product across all business was Eisner 101 - essentially, but they dumped that 15-20 year ago. Limiting investment and all but eliminating expansion to cap overhead and then attempting to make more revenue/profit off what was already paid for. That strategy is incompatible with “expanding/pricing to make it more accessible”

JoeCamel13 days ago

It's non-sensical too, increase your costs to get less money per guest and do huge capital outlays? Bob sez nyet

Tha Realest13 days ago

There’s no evidence 1) this is happening, or 2) they intend to do this.

ChrisFL13 days ago

They had a 5th gate and they closed it..................DisneyQuest :p

Advisable Joseph13 days ago

Disney needs land to expand. Pulling guests from the Magic Kingdom and Epcot (or otherwise unceasing attraction supply for the guests), then lowering prices to increase volume (and income) and accessing middle-class families, while building out the other parks, is the idea. Would you consider a Magic Kingdom Colony across the Lagoon or part of the current parking lot, which guests could access with Magic Kingdom tickets, a "5th gate"? How about parking, so the park can expand into the old parking lot?

gwhb7513 days ago

Agree with this. The only unfortunate thing is that "expanding existing parks" doesn't get the same hype as "a whole new park". Now if we could only have a true expansion of existing parks (i.e. just add new things (like villains land) and not take things away first (like tropical americas in AK)).

JoeCamel13 days ago

I think a lot of the salivating over a new park is fatigue with the same offerings year after year or a dribble of something new. Stale has a stench. Fans have "done" everything in the parks time after time so they want new and "damn the cost it's what I want". Does not have to be logical or make sense it is a want and I need my wants fulfilled ipso facto TDO is going to build me a new park. Seems to point to someone who has never run a business nor cares if that business thrives to feed the stockholders

monothingie13 days ago

Forget the tremendous capital expense to build a new park. The most important thing to Disney is YOY growth. The quarterly earnings mean EVERYTHING to Bob and Wall Street. Key amongst that is that Disney cares tremendously about operational costs and maximizing LL revenue streams. While a new park may be tremendously popular, it also increases operational expenses significantly. It is also very likely that it will cannibalize a large portion of the existing guest base. LL brings in a tremendous amount of revenue for Disney. It works best for Disney with full parks, adding a new park will dilute LL revenue at the existing parks. If a new park was going to justify the build cost and not affect the OI for WDW, then shovels would have been in the ground already. They've done the analysis, and a new park is not financially viable at this point.

lazyboy97o13 days ago

Planning permission and building permission are two separate things. You need planning approval first. Comprehensive Plans (along with Master Plans, Future Land Use Plans and Zoning Plans) are also not set in stone and quite malleable.

Dranth13 days ago

I disagree with him on a number of things, but he isn't wrong on this one. They have underbuilt parks that can absorb a LOT more people if they expand them. Those parks have existing infrastructure which makes it easier and cheaper to develop and build out vs. an entire new park. They understand their main audience has limited vacation time and already know people are unlikely to extend their vacations but instead sacrifice one thing they would have done for something else. They have a strained employee pool that has never recovered from 2020 and staffing new builds in existing parks is WORLDS easier than trying to staff an entire new park. Even an entire parks worth of attractions built over the four current parks would require less staffing than the same number of attractions in a brand-new park once you factor in employees for back of house, support, utilities, security, transportation, etc. Sure, nothing is impossible, and I'll gladly admit to being wrong on this if it does happen, but it would be business malpractice to do so in Florida anytime soon. I would expect most of the other locations around the world with room to get a new gate before Florida.