--:-- Noel King: And now, our feature presentation. Who's the leader of the state that started a new year?
--:-- Noel King: R-O-N-T-E-S-A-N-T-I-S. Weaponizing Florida against a company R-O-N-T-E-S-A-N-T-I-S.
--:-- Noel King: Once upon a time, a kingdom took issue with a ruler's law. And nearly everyone involved ended up suing and being sued.
--:-- Noel King: The Walt Disney Company is suing Florida's Governor Ron DeSantis. Disney's now being hit with a countersuit. All of it on Today Explained.
--:-- Noel King: Now it's time to play our show about this rivalry. R-O-N-D-E-S-A-N-T-I-S of your business. And with AI agents working together autonomously, anyone in any department can focus on the work that matters most.
--:-- Noel King: I've never met an AI agent. Learn how ServiceNow puts AI to work for people at servicenow.com. AI agents are getting pretty impressive. You might not even realize you're listening to one right now.
--:-- Noel King: We work 24-7 to resolve customer inquiries. No hold music, no canned answers, no frustration. Visit sierra.ai to learn more.
--:-- Noel King: Hey, hey, everybody. It's Today Explained. Robbie Whalen covering Disney for The Wall Street Journal.
--:-- Robbie Whalen: Give me the last year of Disney versus Ron DeSantis. What has happened?
--:-- Robbie Whalen: The last year has been arguably the most dramatic year in the entire 100-year history of the Walt Disney Company. It all started in the early part of 2022 when there was a bill introduced in the Florida Statehouse known as the Parental Rights in Education Bill.
--:-- Robbie Whalen: The Parental Rights in Education Bill, what's been condemned as the Don't Say Gay Bill, advanced curriculum that mentions sexual orientation and gender identity in kindergarten through third grade or beyond if it isn't considered to be age appropriate.
--:-- Robbie Whalen: The bill broadly prohibits school districts from encouraging classroom discussion about sexual orientation or gender identity in primary grade levels. And it gives parents the right to bring a lawsuit against a school that they think has violated the policy.
--:-- Robbie Whalen: Governor Ron DeSantis of Florida picked up on this bill and he really kind of lent his support with it, kind of took it over, made it his own, and started advocating very heavily for it.
--:-- Robbie Whalen: Talking about it in public, talking to legislators in Florida and saying, this is a really important bill to make. We need to get it passed.
--:-- Robbie Whalen: In March of last year, Disney enters the picture on this bill. And what happens is Disney has a large contingent of LGBT employees, but they also are a very big presence in Florida as well.
--:-- Robbie Whalen: So they have around 75,000 employees in Florida. They're probably the state's biggest taxpayer. And what that meant was that they had a number of constituencies within the company who were upset by how life was changing in Florida.
--:-- Robbie Whalen: They saw the state as kind of drifting more to a more conservative right-wing posture. They saw laws like this one as emblematic of that. And they started clamoring for Disney to take an official position against that bill.
--:-- Robbie Whalen: A lot of times inside the company, it feels like we're relegated to our own echo chambers. And the support is merely to placate us. And especially if you are saying that you support us, you need to show us with actionable items.
--:-- Robbie Whalen: What we had at Disney in Burbank, California, where they're based, is a new CEO who is very green in the top seat. His name is Bob Chapek. And he's presented with this dilemma very, very early into that period of independence where he's got a large contingent of his employees saying, listen, you've got to really take a stand against this bill.
--:-- Robbie Whalen: We don't like it. Our employees don't like it. Chapek sent a letter to his employees explaining that he did not want to become a political football. He preferred that Disney let its content speak for itself and the inclusiveness of its content should really be the message that the company sends.
--:-- Robbie Whalen: Not weighing in on individual pieces of legislation. That attempt at sort of neutrality really backfired because Disney was a company that had for many years become used to a CEO, namely Bob Iger, who was unafraid of taking stands on what he saw as important social issues.
--:-- Robbie Whalen: So you've got a company full of thousands of employees who expect the top guy, the CEO, to sort of take a stand publicly when they see injustice and take the same stand that they hold to be true in their hearts. And Chapek was refusing to do that.
--:-- Robbie Whalen: So things got worse. There were walkouts, there were demonstrations at the doors of the studio lot in Burbank and at Walt Disney World in Florida. The pressure really ratcheted it up.
--:-- Robbie Whalen: Say it again! Say it again! Today, dozens of Disney employees walked off the job. And Chapek gave in to that pressure.
--:-- Robbie Whalen: I called Governor DeSantis this morning to express our disappointment and concern that if legislation becomes law, it could be used to unfairly target gay, lesbian, non-binary and transgender kids and families.
--:-- Robbie Whalen: And he eventually came out and said, look, we don't support this bill. We think it's wrong. They wrote in part, quote, the Don't Say Gay bill should never have passed and should never have been signed into law.
--:-- Robbie Whalen: Our goal as a company is for this law to be repealed by the legislator or struck down in the courts, and we remain committed to supporting the national and state organizations working to achieve that.
--:-- Robbie Whalen: He also announced that the company was going to pause all political donations in Florida which as the state biggest taxpayer and one of the companies that depends most on local law and state law to kind of ease the way for its operations was a big deal.
--:-- Robbie Whalen: I mean, this is a company that has an incredibly powerful lobbying operation in Tallahassee. So for him to say, we're not going to get involved with this, we don't think it's worth the effort and it's not worth the risk to our image.
--:-- Robbie Whalen: And then mere weeks later reversing, doing a 180 and saying, wow, we actually oppose this bill, we're going to fight against it. It appeared very weak to a lot of people, especially to Ron DeSantis.
--:-- Robbie Whalen: It appeared that a CEO had been bullied by his own employees into doing something he didn't want to do. How does Ron DeSantis respond?
--:-- Robbie Whalen: Well, he went to town on them, for lack of a better term. Ron DeSantis, he started immediately fundraising based on the differences between his opinion and Disney's.
--:-- Robbie Whalen: He called Disney a woke corporation. I mean, I'm going to do what's right for the people of Florida. I don't take marching orders from woke corporations based in California.
--:-- Robbie Whalen: That's not how I roll. He said they were out of touch with the rights and needs of parents in Florida.
--:-- Robbie Whalen: Then the next thing he did, and this is where things got really interesting, was that Ron DeSantis in the spring of 2022 called a special legislative session.
--:-- Robbie Whalen: I think as many of you know, the Florida legislature is meeting this week to consider the congressional reapportionment plan for Florida for the next 10 years.
--:-- Robbie Whalen: But I am announcing today that we are expanding the call of what they are going to be considering this week. They also will be considering termination of all special districts that were enacted in Florida prior to 1968.
--:-- Robbie Whalen: And that includes the Reedy Creek Improvement District. Here's where I have to back up and explain something that's a little bit complex, but I hope I can explain it well.
--:-- Robbie Whalen: So since 1967, Disney has owned about 24,000 acres of land near Orlando, which is where Walt Disney World sits on that land.
--:-- Robbie Whalen: Well, Mr. Governor, this has been a wonderful reception that you've given us here. All the faces seem friendly and we feel very much at home.
--:-- Robbie Whalen: And of course this is a big exciting project for us too you know i mean in fact it's the biggest thing we've ever tackled and that land has since 1967 been governed by something called the reedy creek improvement district which is um essentially a county government it's essentially
--:-- Robbie Whalen: It's got two cities within it, but it functions the same way any other county government might. And Reedy Creek allowed Disney, for example, to build or expand a building without having to appeal to the state or to some other local government for building permits.
--:-- Robbie Whalen: Not having to do the same kinds of environmental impact reports that other companies had to do when they wanted to expand their real estate holdings.
--:-- Robbie Whalen: And the reason why they didn't have to do that is because the Reedy Creek Improvement District was governed by a five-member board that was elected entirely by the landowners at Reedy Creek.
--:-- Robbie Whalen: And the landowners at Reedy Creek means Disney. Mickey Mouse! So Ron DeSantis, angry with Disney for not agreeing with him on this parental rights bill, called a special session of legislature to discuss a bill that would end Reedy Creek.
--:-- Robbie Whalen: The compliant state legislature in Florida, you know, very quickly approved and debated, approved and signed this bill into law.
--:-- Robbie Whalen: And at the end of April of last year, everyone was very stunned because Disney had kind of been beaten up so badly in public by the governor of Florida that it really looked like Ron DeSantis had won this round and had won a huge kind of degree of goodwill from his supporters and that his star was even further on the rise.
--:-- Robbie Whalen: So I'll be signing the bill momentarily, and that will officially end the self-governing status here in central Florida for Disney.
--:-- Robbie Whalen: So fast forward to this year, and what's happened in the last few months has been really interesting. Ron DeSantis introduced a new bill in Florida, in the Florida legislature, to rename this district and to give the governor, meaning him, power to appoint board members, rather than elect them in a Democratic process that arguably was not very Democratic at all because Disney was the only voter, really.
--:-- Robbie Whalen: So that all passed because, again, he has allies in the legislature and a lot of support there. Those bills passed, and in late February of this year, Ron DeSantis appointed five new board members, mostly from his donor base and people who were involved in top positions in the state Republican Party apparatus.
--:-- Robbie Whalen: So as of late February, we've got this new board that runs things at Reedy Creek, which is now called the Central Florida Tourism Oversight District, which really rolls off the tongue.
--:-- Robbie Whalen: But you would think that here's another win for Ron DeSantis. Yeah, DeSantis just won. You think he won again. The guy can't stop winning, to quote one of his competitors.
--:-- Robbie Whalen: But that is actually not the whole story because in early February, Disney, which has very good high-paid lawyers, kind of pulled a fast one on the governor and outmaneuvered him in this very specific, very key way, which I'll explain.
--:-- Robbie Whalen: And what happened was in a public meeting that was twice advertised in the Orlando Sentinel newspaper and that was attended by journalists, attended by other public officials, the district, before the new board was seated, they got approved a 30-year development agreement.
--:-- Robbie Whalen: The agreements transferred almost all of the special district's power to Disney itself and includes approval to build another theme park along with smaller parks and would bar the Central Florida Tourism Board oversight for making changes to properties without getting the company's approval.
--:-- Robbie Whalen: That might sound like gobbledygook, but in Florida, in order to sort of expand something or build something, there's a number of layers of bureaucracy you have to go through.
--:-- Robbie Whalen: But the most important one is getting an approved development agreement. And this is essentially a zoning agreement. You know if you want to build up five stories on your house you got to get air rights If you want to you know build a new hotel you got to make sure you have enough parking You got to make sure the setbacks from the street are proper and correct
--:-- Robbie Whalen: Disney basically put together this massive development agreement that lasts for 30 years and they had the old board approve it or the old board did approve it at the very least. And they did this in a public meeting, very public way, transparently in accordance with Florida sunshine laws, and no one in Tallahassee on the governor's team was paying attention.
--:-- Robbie Whalen: So this whole project that DeSantis had to defang Disney and strip power away from how they get to control their own destiny at Walt Disney World was undermined by the fact that they admitted themselves.
--:-- Robbie Whalen: They said in public meetings, we didn't even know about this development agreement until our own lawyers that we hired told us about it. They looked into it. They were on the case, and they found, you know, you really don't have that much power like you thought you did.
--:-- Robbie Whalen: So this whole power play that DeSantis put together kind of fell flat because Disney seemed to have outmaneuvered the governor and his intents here.
--:-- Robbie Whalen: To this point, what I've heard you say is Disney won. Disney outmaneuvered the governor. How do we end up then with Disney suing the governor?
--:-- Robbie Whalen: What happened was once it became clear that Disney had sort of outwitted Governor DeSantis on this point, the governor needed to do something to sort of, well, A, to save face, but also to sort of strike back, I guess.
--:-- Robbie Whalen: And so this is the Empire Strikes Back part of the story. There is a great disturbance in the force. I have felt it. We have a new enemy. What he did was that he had some sympathetic legislators draw up an amendment to his bill establishing the new control of the board at Reedy Creek.
--:-- Robbie Whalen: And the amendment said that the board can't enter into any new agreements four months in any direction on either side of when the new board is seated.
--:-- Robbie Whalen: Basically, an amendment that would retroactively cancel this development agreement that Disney had put in place in early February to sort of mute the impact of DeSantis' attacks, which is kind of like preposterous on its face.
--:-- Robbie Whalen: But my understanding of the strategy is that they knew that if they did this, that Disney would sue on constitutional grounds, and that would essentially keep this issue in the news for a few years to come.
--:-- Robbie Whalen: And keep in mind that we have a presidential election coming up in November of next year. There's a primary earlier in the year. And if that is Ron DeSantis' goal, and I'm not sure exactly that it is, but if that was an aspiring presidential candidate's goal, to sort of have one of your hot-button issues, which is standing up to woke corporations, be in the news for the next 18 months or so, it would seem like this would be a good way to do it.
--:-- Noel King: Support for Today Explained comes from Built Rewards. These days, it seems like everybody has a rewards program. You swipe your card and you get one cent on the hundred dollars. But with your rent, frequently, you just pay month after month. You never get anything from it other than that roof over your head.
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--:-- Noel King: I order you to stop. Ah, but there's a new order now. My order. Finally, you will bow to me. We will never bow to you.
--:-- Noel King: Why am I not surprised? If you won't bow before a sultan, then you will cower before a sorcerer. It's Today Explained.
--:-- Noel King: We're back with Robbie Whelan of The Wall Street Journal. He covers Disney.
--:-- Robbie Whelan: When Disney files this lawsuit, it says it's suing on what grounds?
--:-- Robbie Whelan: So Disney is sort of preemptively suing the state in federal court over what they're describing as an unconstitutional move or an unconstitutional attempt to punish them for speaking their minds.
--:-- Robbie Whelan: And Bob Iger, the new CEO, has said this at the annual meeting this year. He said, you know, look, you can't punish a corporation just for speaking its mind. There's something called the First Amendment. We have rights.
--:-- Robbie Whelan: Our point on this is that any action that thwarts those efforts simply to retaliate for a position the company took sounds not just anti-business, but it sounds anti-Florida.
--:-- Robbie Whelan: Generally speaking, what they want is injunctive relief from a federal judge from these constant attacks that DeSantis is launching against the company.
--:-- Robbie Whelan: Because they're saying this is retaliation. You can't retaliate against a company for speaking its mind and exercising First Amendment rights.
--:-- Robbie Whelan: You also can discard contracts like the development agreement that they signed in February with the old board.
--:-- Robbie Whelan: You can discard a contract like that just because you want to. It goes against the Constitution.
--:-- Robbie Whelan: About 50 million visitors will go through our gates this year alone about 8 million of them from outside the U And we are the largest taxpayer in the state.
--:-- Robbie Whelan: Is this dangerous for Disney? It's not a movie set. You can't just pick up Disney World and move it.
--:-- Robbie Whelan: Is it a dangerous move to go and sue the governor of the state where you almost certainly have to be located?
--:-- Robbie Whelan: I can't tell you with 100% certainty if it is dangerous or not. What I can tell you is that I don't believe Disney views this as a dangerous or risky situation.
--:-- Robbie Whelan: And the reason why is, well, for starters, Disney has much better lawyers than Ron DeSantis has and much higher paid lawyers and a lot of firepower to throw at this governor.
--:-- Robbie Whelan: But I think that there's a little bit of a bluff calling going on here. I mean, I think that Disney's view, or my sense from talking to people who work with the company and sort of have talked to its lobbyists, is that this is a guy, Ron DeSantis, who is doing this for optics reasons rather than for real governing concerns or real policy issues.
--:-- Robbie Whelan: And his goal is mainly to keep this in the news and to continue going on Fox News and giving interviews about this.
--:-- Robbie Whelan: What should we do with this land? And so, you know, it's like, OK, I mean, people have said, you know, maybe maybe have another maybe create a state park, maybe try to do more amusement parks.
--:-- Robbie Whelan: Someone even said, like, maybe you need another state prison. Who knows? I mean, I just think that the possibilities are endless.
--:-- Robbie Whelan: In other words, this is not really about anyone having a problem with the way Walt Disney World is run.
--:-- Robbie Whelan: The goal is more related to kind of keeping this as an issue on people's minds going into the Republican primary next year.
--:-- Robbie Whelan: And I should also say another reason why Disney probably does not view this as a very dangerous situation is that even Republicans in Florida, those allies to Governor DeSantis, who had been very vocal in their support of him a year ago, are starting to turn on the governor.
--:-- Robbie Whelan: I do worry that if this happens too many times, businesses that are thinking about coming to Florida are saying maybe we don't want to go there because if we get into a firestorm with them politically. they're going to come after our business.
--:-- Robbie Whelan: We had a story last week where we quoted one such lawmaker. He said, I agree with the governor, but I don't think the people are with us anymore.
--:-- Robbie Whelan: People are getting tired of this. And so when Disney sees comments like that, I think that what they're thinking is likely something along the lines of, well, not even this guy's best friends are getting behind him anymore.
--:-- Robbie Whelan: That means this is near the end. This is a big employer inside Florida. I think the governor should shut down with him. I don't think the idea of building a prison next to a place that you bring your family is the best idea.
--:-- Robbie Whelan: Ron DeSantis is popular in some quarters, including in Florida, where he won the governorship. However, Disney is also popular in a lot of quarters.
--:-- Robbie Whelan: Do you get the sense that Ron DeSantis is weighing what this does to his electability at all? It sounds like Disney is very much weighing what this means for him, his electability, and them as a company.
--:-- Robbie Whelan: Any evidence that DeSantis is doing the same?
--:-- Robbie Whelan: The main evidence we have on that question has to do with campaign donors, right? Everyone who wants to be a president of this country from whatever party needs to secure the backing of prominent party donors from their party.
--:-- Robbie Whelan: And the impression that everyone has that Ron DeSantis is not doing as well with those donors as he needs to be.
--:-- Robbie Whelan: And like I said, it's not unimportant that the Republican Party traditionally is the party of big business.
--:-- Robbie Whelan: And so when donors and big backers of a potential Ron DeSantis campaign see this guy, their champion, who they want to see in the White House, when they see him going after big companies over what appears to be a personal vendetta, they start to get worried.
--:-- Robbie Whelan: And DeSantis is definitely aware of that. The question is how far will he go before he pulls back his attacks on Disney?
--:-- Robbie Whelan: Has anything changed at the Disney World resorts? Will kids and Disney adults like today explained to editor Matthew Collette feel any repercussions from all of this chaos?
--:-- Robbie Whelan: Well, there's been some sort of frankly silly talk about building a prison next to Walt Disney World, or I've even heard things about a fertilizer processing plant next to the entrance of Disney World to make people make their experience unbearable.
--:-- Robbie Whelan: I doubt any of that will happen. On the Disney side of things, one thing that might change people's user experience is that Disney seems to be going doubly hard on its efforts at inclusion and sort of equity practices.
--:-- Robbie Whelan: For example, in September at Walt Disney World, they'll be hosting the world's biggest LGBT interests conference at Disney World, which is a real slap in the face. I mean, it's hard to see that as anything but sort of a kiss off to Ron DeSantis for going after them on this issue.
--:-- Robbie Whelan: But no, by and large, I don't think things will change. Disney World is one of the most profitable entertainment venues in the entire world.
--:-- Robbie Whelan: The parks division at Disney is going great guns. They're making money hand over fist. They're trying to improve the user experience.
--:-- Robbie Whelan: There was one thing, which is that Iger announced $17 billion in new investment at Walt Disney World over the next decade, including the creation of 13,000 new jobs and thousands more indirect jobs.
--:-- Robbie Whelan: And so that's one plus, I think, one silver lining for fans is that some of these kind of things they're planning to do to improve and expand the parks, add more rides, add more attractions, might actually get fast-tracked as a result of this fight, which will be quite to the pleasure of Disney World fans.
--:-- Noel King: Robbie Whelan of The Wall Street Journal.
--:-- Noel King: Today's episode was produced by Hadi Moagdi and edited by the aforementioned Matthew Collette.
--:-- Noel King: It was fact-checked by Serena Solon and engineered by Michael Raphael and Paul Robert Mouncey.
--:-- Noel King: I'm Noelle King. It's Today Explained.
