Disney scraps $867m Florida plan amid Ron DeSantis feud
Walt Disney Company announced that it has scrapped its plan to invest almost $1bn (PS806m), to build a corporate campus in Florida.
The reverse comes amid an intensifying feud between the entertainment company and the Republican-led state government led by Ron DeSantis.
Around 2,000 Disney employees would have been relocated to a Disney complex in Lake Nona near Orlando.
The office of Mr. DeSantis has described the announcement as “unsurprising”.
An internal email sent to employees on Thursday announced the cancellation.
BBC News obtained the email in which the company said that the decision was due to “considerable” changes since the announcement.
In the email, Josh D’Amaro, the head of Disney’s theme park division, also referred to “changing business conditions”.
The email doesn’t mention Mr. DeSantis or politics, but it is interpreted to be a reference to the growing tensions between Disney officials and Florida legislators.
“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,” Mr. DeSantis’ office said in a statement.
“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.”
The internal Disney email noted that the decision to scrap the project comes after “new leadership” at the company, referring to ex-CEO Bob Chapek, whose sudden departure in November shocked Hollywood.
The Lake Nona campus, which had not been built, would have been a new home for employees at the firm’s secretive theme park research and development arm, known as Imagineers, who were asked to move from California to Florida.
Mr. D’Amaro’s email said the relocation would no longer be required and it would discuss the next steps with those he said had already done so.
Many of the jobs that were supposed to relocate to Florida were higher paid, white collar, and tech-focused positions.
The Orlando Business Journal reported the project was valued at about $867m and that the average annual wage for the positions was $120,000.
Bob Iger, the former chief executive who made a stunning return to replace his successor, Mr. Chapek, has announced sweeping changes to boost the firm’s business, which has come under pressure as the traditional movie and television industries decline.
Disney launched a streaming offering, Disney+, in 2019, but it remains loss-making.
Unlike other media companies, Disney has been shielded by the popularity of its theme parks, which have kept the firm profitable.
But the value of its share price has halved since peaking in March 2021, as investors predict a tough road ahead.
Earlier this year, Mr. Iger announced a plan to save $5.5bn, involving a sweeping reorganization of the company’s operations and roughly 7,000 job losses.
Among the cuts, announced separately on Thursday, was the closure of a 100-room Star Wars-themed immersive hotel experience at one of its Florida theme parks.
The relationship between Disney and Florida – where it employs more than 70,000 staff – began deteriorating last year after Mr. DeSantis condemned the company for opposing a state law banning discussion of sexual orientation or gender identity in public schools.
In April, Florida also moved to take control of the Reedy Creek Improvement District – covering the 25,000-acre area known as Walt Disney World – a self-governing zone, with utilities and a fire department.
State lawmakers voted to give Mr. DeSantis the power to appoint members to the district’s governing board, removing that authority from landowners, of which Disney was by far the biggest.
The move prompted a lawsuit from Disney, accusing state officials of conducting “a relentless campaign to weaponize government power against Disney in retaliation for expressing a political viewpoint unpopular with certain state officials”.
Days later, Florida filed a countersuit against Disney.
Disney’s parks in Florida have long been one of its most popular attractions, bringing in about 50 million visitors each year.
In a call with investors a week ago, Mr. Iger questioned Florida’s interest in having Disney grow in the state.
“Does the state want us to invest more, employ more people and pay more taxes, or not?” Mr. Iger asked.
Aubrey Jewett, a politics professor at the University of Central Florida, said he believed Mr. DeSantis and his allies “did not think about the longer-term ramifications of their actions” when they moved to “punish Disney for speaking out”.
“They weren’t going to move the Disney World complex someplace else. But as Disney has just shown, that’s not the only investment and jobs they were talking about creating in Florida.”
Erin Huntley, the chair of the Republican Party in Orange County, where Disney World is located, said “It’s a different ballgame” now compared to when Walt Disney first realized the area’s potential in the 1960s.
“People are still wanting to come here, no matter what battles are going on,” she told the BBC. “Central Florida is more than just Disney.”
Mr. DeSantis is expected to announce a 2024 presidential bid next week. His likely rival, Donald Trump, said in a statement that Mr. DeSantis was being “absolutely destroyed by Disney” and that his “political stunt” of battling them was “all so unnecessary”.