2
Credit: Inside the MagicLost in the drama between Florida Governor Ron DeSantis and The Walt Disney Company are the financial repercussions that are being felt on both sides. We examine the economic battle for both Disney and the State of Florida.
Related: Disney Vs. Ron DeSantis Not What It Seems, Report Says
The Walt Disney Company has been in a significant battle with Florida Governor Ron DeSantis, but it may not be what it seems.
Over the last 18 months, Disney’s stock price has plummeted. Disney lost nearly 40% from last fall and hit below the $100 mark even with the spring tourism season in full swing. Disappointing first-quarter earnings from Disney+ competitor Netflix, consumer fears of a recession, and continuing inflation contributed to the loss. Still, there has been one issue the media has focused on regarding Disney World’s domain of Central Florida.
Many pundits have said in the past that the overhang from the battle over the future of control of the Reedy Creek Improvement District could have pivotal implications over the financial future of The Walt Disney Company and have attributed the company’s falling stock price as a consequence of the fight between the two sides. However, contrary to popular belief, the financial performance disappointments have been due to the other segments of the business and have had nothing to do with the performance of Walt Disney World Resort.
Related: Disney Will Face ‘Biggest Decision Yet’ According to One Expert
Even though the battle has had a minimal financial effect, it doesn’t mean that this couldn’t be costly for The Walt Disney Company. According to a recent article published by GOBankingRates.com, if DeSantis were to win the war between the two sides, Disney could lose much of the substantial power it has developed in Orlando, Florida. If Disney wins, the company’s massive fan base — not to mention shareholders — could see “significant expansions, projects and, ultimately, revenue,” Motley Fool writes.
Given everything at risk for Walt Disney World, the legal battle will last for years.
In the interim, other aspects of the company beyond the flagship theme Park, including Disney+, are likely to drive overall sales and Disney’s stock fluctuations. If Disney were, for example, to sell off Hulu to Comcast, as some analysts predict, and use the proceeds to pay down debt on their balance sheet and buy back stocks they sold off last year, it could help raise the stock price. In addition, reinstating a dividend for shareholders, which CEO Bob Iger suggested earlier in 2023, will also help increase the cost of Disney’s stock.
Why do you think Disney’s stock price continues to struggle? Let us know what you think by leaving a comment below.