The Walt Disney Company’s Chief Executive Officer, Bob Iger, decided not to stay quiet about his legal feud with Florida Govenor Ron DeSantis. During the company’s Q2 2023 Earnings Call, the CEO made it clear that he thinks the politician is out of bounds.
Thanks to The Motley Fool, we can access the call’s entire transcript. An analyst from JPMorgan Chase & Co. asked Iger, regarding the legal struggle in Florida, “How should investors think about the risk, both the near-term and long-term business for Disney?” In response, Disney’s CEO said the following:
“Regarding Florida, I 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 in the facts very clear, and that’s really that this is about one thing and one thing only, and that’s 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 had, I want to set the record straight on that, too. There are about 2,000 special districts in Florida, and most were established to foster investment and development, where we were one of them. It basically made it easier for us and others, by the way, to do business in Florida. And we built a business that employs, as we’ve said before, over 75,000 people and attracts tens of millions of people to the state.
So, while it’s easy to say that the Reedy Creek special district that was established for us over 50 years ago benefited us, it’s misleading to not also consider how much Disney benefited the state of Florida. And we’re — also, we’re not the only company operating a special district. I mentioned 2,000. The Daytona Speedway is one, sort of the Villages, which is a prominent retirement community, and there are countless others.
So, the goal here is leveling the playing — if the goal is leveling the playing field, then a uniform application of the law of — or government oversight of special districts needs to occur or be applied to all special districts. There’s also a false narrative that we’ve been fighting to protect tax breaks as part of this. But in fact, we’re the largest taxpayer in central Florida, paying over 1.1 billion in state and local taxes last year alone. And 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 on the legislation. So, this is plainly a matter of retaliation while the rest of the Florida special districts continue operating basically as they were. And I think it’s also important for us to say our primary goal is always been to be able to continue to do exactly what we’ve been doing there, which is investing in Florida. We’re 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 or — 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’ve 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 were 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. And we also provide them with great benefits and free education.
So, I’m going to 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? Thanks.”
It’s no secret that Reedy Creek may not have sufficient staff to handle the needs of the sprawling Walt Disney World resort. Iger may not want to admit it, but the authority overseeing Disney’s land needs help. Members of the AHJ’s fire department have raised concerns in the past that guests may be in danger due to insufficiencies, according to the Orlando Sentinel in 2021.
Other news revealed during the call involves Disney+ increasing ads along with the subscription fees. During the CEO’s opening statement, Iger tried to justify the increase, “we plan to set a higher price for our ad-free tier later this year to better reflect the value of our content offerings.”
When quizzed if the losses for the streaming service would peak in the third fiscal quarter, Iger mentioned cutting content while “growing advertising, growing subscriber fees, growing engagement.”
Fewer shows and movies but higher fees? It looks like this will be a game of wait-and-see.
[Source: Orlando Sentinel]
[Source: The Motley Fool]
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