The grand dream of former Walt Disney Company CEO, Bob Iger — the Shanghai Disney Resort in Pudong, Shanghai, China — is now looking a lot riskier. Originally envisioned in the early 2000s, the park was finally opened in 2016 after Disney worked more and more closely with the Chinese government, both in the film industry and in theme park planning. Covering a footprint roughly quadruple that of Disneyland Resort in Anaheim, California, Iger was quoted as saying Shanghai Disney was the most important resort investment since Walt Disney World was acquired by Walt Disney in Orlando, Florida. Due to the communist government’s demands for American businesses operating in China, Disney only owns 43% of the resort, while the Chinese Communist Party owns the other 57% via three Shanghai government companies.
In total, Shanghai Disney Resort represents a five billion dollar investment for The Walt Disney Company. But with tensions rising between China and many other parts of the world, that investment could go down as Bob Iger’s colossal mistake.
One of the first signs that Disney’s decision — to develop huge real estate ventures in a communist country — might not have been the wisest, was when the National Basketball Association in the United States found itself completely stricken from China’s audience over a single tweet. The Chinese Communist Party’s hardline against the NBA over a team owner taking a positive position on Hong Kong’s freedoms meant that entertainment companies were put on notice: disagree, or have any person within your organization disagree, with Beijing’s geopolitical goals, and you will be monetarily damaged.
LeBron James speaks for the first time since the NBA's trip to China, says Rockets GM Daryl Morey was "misinformed" about the ramifications of his tweet, and "not educated about the situation." Here are LeBron's comments in full: pic.twitter.com/Rwjnchm2w3
— Rachel Nichols (@Rachel__Nichols) October 15, 2019
Other entertainment entities with any hint of criticism towards the Chinese government were subsequently removed from the Chinese marketplace. The popular satire cartoon, South Park, was made illegal in China. Marvel’s own Shang Chi and The Eternals both look to have difficulty getting into Chinese theaters for a variety of political reasons.
“Like the N.B.A., we welcome the Chinese censors into our homes and into our hearts. We too love money more than freedom and democracy. Xi doesn’t look just like Winnie the Pooh at all.” — Trey Parker and Matt Stone, Creators of South Park, in Faux-Apology
Now, after a pandemic that may have geopolitical ramifications for China, as well as numerous situations that prove difficult for Hollywood’s bottom line (Uighur Muslims being held in concentration camps, forced labor, organ harvesting, etc)… it looks like Hollywood is getting ready to divorce. A recent article from The Hollywood Reporter goes into great detail about how the American entertainment industry is finally realizing they just can’t do business anymore with Beijing. It might not have been moral courage that brought them to the epiphany, but the fact they can’t seem to make enough money or negotiate a new MPAA contract seems to have done the job.
One company that can’t decouple quite so easily is the same company that had to praise governments running concentration camps. The Walt Disney Company, with its billions of investments in China (and now Hong Kong given China’s takeover), is in a very difficult position. Whereas the trade publications are forecasting the narrative Hollywood executives will project as they abandon China, Disney is stuck. Other companies can simply market films to India and other rising economies… Disney has real estate property in China that represents one third of their entire Disney Parks empire.
So what is The Walt Disney Company to do now that China is posturing against a free Taiwan? If China attempts to conquer Taiwan as they did Hong Kong, it doesn’t seem the world will respond in the same way. In what might be the most terrifying development one could imagine in the 21st century, the United States military is acting as if it might one day be forced into war with China. At the least, it appears the United States and China are entering into a new cold war.
As we’ve seen, China can strip away an American company’s assets in their country without any recourse to the corporation. So what would Disney do if China invades Taiwan? Given that Taiwan’s Foreign Minister is sounding the alarm in that regard, it’s certainly a possibility. China is reportedly doing invasion drills with their military. A Taiwan invasion might be a red line for the west and its corporations, but it isn’t even the only thing Disney must worry about. What would Disney do if it turns out China has acted maliciously during the pandemic? What about future issues that are sure to rise?
Well, one thing Disney may have been looking at over the past couple of years is the idea that they could sell their 43% ownership in Shanghai Disney to other government-backed companies in China. They could continue to license their intellectual properties at the resort for far less income, but at least they could potentially avoid a situation where they are stripped of billions in assets. You can imagine a difficult scenario for The Walt Disney Company if China were to invade Taiwan and Disney was still out there thanking Beijing in their box office films. Already, we’ve seen Disney’s public perception take a huge hit as they try to hold onto social justice positions in western nations while taking unethical positions in China.
The future is going to be fraught with difficulties for new Walt Disney Company CEO, Bob Chapek. While the rest of Hollywood is preparing to set sail away from the South China Sea, he may be stuck in Shanghai. Being locked into that investment comes with requirements that are likely to damage Disney’s appeal in all other parts of the world. And for Disney, they just hope that isn’t escalated through future geopolitical tensions. After all, Mickey likes his cheese, and he likes it no matter where it’s made.
How long he can hold onto his Chinese Cheddar is something we’ll all be watching and wondering.
Pirates & Princesses (PNP) is an independent, opinionated fan-powered news blog that covers Disney and Universal Theme Parks, Themed Entertainment and related Pop Culture from a consumer's point of view. Opinions expressed by our contributors do not necessarily reflect the views of PNP, its editors, affiliates, sponsors or advertisers. PNP is an unofficial news source and has no connection to The Walt Disney Company, NBCUniversal or any other company that we may cover.