Iger: Does Florida Want Disney's Money or Not?

May 10, 2023, 3:17 PM · The Walt Disney Company reported its second quarter earnings Wednesday, with its theme park segment posting big gains, once again. In a conference call with investment analysts after the earnings release, most of the attention fell on Disney's streaming plans, but CEO Bob Iger offered an extended defense of the company's legal position against the state of Florida over the Walt Disney World Resort.

Disney Parks, Experiences and Products reported a 17% increase in revenue to $7.776 billion in the three months ending April 1, 2023. Operating income was up 23% for the segment in the period - to $2.166 billion, partially offsetting a 42% drop in income for Disney's media and distribution segment.

With the Parks segment, operating income was up 10% at Disney's domestic theme parks and the Disney Cruise Line, to $1.519 billion, while income rose to $156 million at the international parks, up from a loss of $268 million in the prior year quarter, when some parks were closed due to lockdown restrictions.

"Results at our domestic parks and resorts were slightly unfavorable to the prior-year quarter, as a decrease at Walt Disney World Resort was largely offset by growth at Disneyland Resort," Disney said in its earnings report.

"The decrease at Walt Disney World Resort was due to higher costs, partially offset by increased volumes. Higher costs reflected cost inflation, increased expenses associated with new guest offerings and higher depreciation. The increase in volumes was due to attendance growth and higher occupied room nights. Increased operating income at Disneyland Resort resulted from growth in attendance and guest spending, partially offset by higher costs. Higher guest spending was due to increases in average ticket prices and average daily hotel room rates. The increase in costs was primarily due to higher operations support costs and increased costs associated with new guest offerings."

The investor conference call that followed today’s earnings report mostly focused on Disney+ and the company’s announced plans to create a single app for viewers who subscribe to the bundle with both Disney+ and Hulu, but when asked about the legal situation with the state of Florida, Iger responded.

And boy, did he respond.

“First of all, I think the case that we filed last month made our position and the facts very clear, and that is really that this is about one thing and one thing only - and that is retaliating against us for taking a position about pending legislation. We believe that in us taking that position, we are merely exercising our right to free speech,” Iger said.

“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 have, I want to set the record straight on that, too. There are about 2,000 special districts in Florida - most were established to foster investment development, where we were one of them. It basically made it easier for us and others to do business in Florida, and we built a business that employs, as we said before, over 75,000 people, and attracts tens of millions of people to the state.

“So while it is easy to say that the Reedy Creek special district that was established for us over 50 years ago benefited us, it is misleading to not also consider how much Disney benefited the state of Florida. We are also not the only company operating a special district. The Daytona Speedway, it has one. So do The Villages, which is a permanent retirement community and there are countless others. So if the goal is leveling the playing field and the uniform application of the law, government oversight of special districts needs to occur or be applied to all special districts.

“There's also a false narrative that we have been fighting to protect tax breaks as part of this. But in fact we are the largest taxpayer in Central Florida paying over $1.1 billion in state and local taxes last year alone. 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 in the legislation. So this is plainly a matter of retaliation while the rest of the Florida special districts continue operating basically as they were.

“It’s also important for us to say our primary goal has always been to be able to continue to do exactly what we have been doing there, which is investing in Florida. We are proud of the tourism industry that we created, and we want to continue delivering the best possible experience for quests going forward. We never wanted 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 have 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 are 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. 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?"

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Replies (25)

May 10, 2023 at 4:40 PM

Yeah, what percentage of that revenue boost is driven by Genie+, the service that gouges guests AND ruins the parks by making everyone wait longer than they did under the free fastpass system?

In other words, how much is Disney profiting by purposefully undermining the visitor's experience? To quote the storytellers at the Royal Theater, I say FIE.

May 10, 2023 at 4:49 PM

I was coming here to post, “Here comes the Disney-hate responses”, but looks like Colonel beat me to the punch and started already.

May 10, 2023 at 7:55 PM

With the increase in revenue at the parks, that must mean that Cast Members wages are going to increase…right? Right? RIGHT?

May 10, 2023 at 10:24 PM

Disney hate? Bro, it's Disney love, there's nothing I love more than going to Disneyland. But when management decides to ream me, and make me pay more for less, I'm going to complain. You don't?

Meahile: Iger is DeSantis' DADDY. DeSantis is doing addition; Iger's doing multivariable calculus. He'll put that bitter little troll in the trash before it's said and done.

May 10, 2023 at 11:37 PM

Personally I think Disney got lucky that Desantis is going after the district like this. It was inevitable that some day, some politician was going to go after it. This guy doing it in this way with this kind of attitude turned public opinion in favor of Disney having its district and now ensures they are going to have it for a long, long time.

May 11, 2023 at 2:24 AM

@ AgustinMacias: Um ... right

WDWNT (03/29/23): "After their 'Rally for a Raise' two weeks ago, Walt Disney World Cast Members won negotiations for a pay raise last week following a return to negotiations by Disney.

"Cast Members will be receiving a minimum wage of $17/hour now, with $18/hour by December. Back pay of $1 extra per hour since October 1, 2022 will also apply to Cast Members hired on or before that date.

"All Cast Members will also receive a minimum of a $5.50 raise over the next five years under this new agreement, with the first $3 coming by December 2023. These new minimum wages will also apply to all new Cast Members. By October 2026, the minimum rate will increase to $20.50 per hour for current workers, and $20 per hour for all workers hired after December 3, 2023.

"Additional raises will also come to several classifications of unionized Cast Members:
Housekeepers: $17 to $20 immediately, $24 by October 2026
Dishwashers: $15 to $18 immediately, $22 by October 2026
Cook 2 (Prep cooks) : $16.40 to $20 immediately, $24 by October 2026
Cook 1 (Line cooks): $19 to $23.10 immediately, $27.10 by October 2026
Chef Assistant: $20 to $24.60 immediately, $28.60 by October 2026
Bus Drivers: $18 to $20.50 immediately, $24.50 by October 2026

"The agreement also contains a new provision for eight weeks of paid Child Bonding Leave, which allows a parent to take time off to bond with their newborn child within its first year. Other hourly premiums will also increase with the contract."

May 11, 2023 at 5:12 AM

It’s about time Disney put that question out there. If I were them a few “leaks” would follow about locating land to relocate the parks. As they’d be complete nonsense documents produced for press consumption they’d all of course support the view that it’s possible to relocate assets if necessary…

May 11, 2023 at 8:16 AM

So, Colonel, I have to know who you are cheering for in this legal battle: The evil and greedy Disney corporation, or the evil conservative government of Florida. Who is the lesser of two evils (in your mind)?

May 11, 2023 at 9:35 AM

These 2 sides are just made for each other, no? Florida wouldn't be half the tourist magnet it is today without Disney, and Disney would probably be a fraction of the theme park chain it is today if it had not expanded into Florida. This is like an empty nested couple trying to figure out if they need to still live in the same house. For all of the political bluster and ulterior motives, Disney NEEDS Florida and Florida NEEDS Disney. At some point, smart people on both sides will realize this and restore the norms that allowed this relationship to prosper for the past 50 years.

May 11, 2023 at 10:03 AM

Look, I get it, politicians on both sides of the political spectrum want to be seen as standing up to the "soulless, mega-corp." Going after Reedy Creek in this manner (haphazard, no solid plan or approach, being caught off guard by previous contract agreements) wasn't the way to go.

So what could a public servant do? Increase the proportion of property tax that is paid on land, while decreasing the proportion paid for buildings, attractions, etc. It's no secret that Disney owns large tracts of unimproved land in FL, and currently they're more than willing to squat on it and pay a paltry amount of taxes on it every year. If land taxes rose, Disney would be forced to: eat the additional cost & pay more into the community; develop the land by building additional attractions, commercial areas, or (better yet) housing to offset the cost; or, sell the land to someone else who will develop.

The entire Reedy Creek debacle could have and should have been avoided. There are much more reasonable measures that could be taken to fix some of the incentive structure around Disney and other large landowners in the state.

May 11, 2023 at 10:29 AM

How is it possible for Disney parks to be posting revenue gains? We’ve been assured repeatedly by the right that “Go woke, go broke”.

May 11, 2023 at 10:46 AM

"So, Colonel, I have to know who you are cheering for in this legal battle: The evil and greedy Disney corporation, or the evil conservative government of Florida."

Disney's "greed" is a function of capitalism. The street requires every Company to constantly grow, which is ridiculous when you stop to think about it. Do I wish Disney would stop sticking it to me, their loyal fan, in order to increase revenues? Of course. Do I think the Company is evil? No, when they're on their game, they represent the best of America.

DeSantis, on the other hand, is a would-be fascist, a sad, pathetic man (like Trump) who has no platform other than using culture war nonsense to inflame his white nationalist base. He's a hateful imbecile who never smiles, a sentient piece of beef jerky who cares about no one but himself. His time is almost done, and he can go join the boards of gun manufacturers and spend his weekends calling the cops on Black family cookouts.

@Russell You write "at some point, smart people on both sides will realize this and restore the norms that allowed this relationship to prosper for the past 50 years." Disney hasn't upended any norms, and Iger is the same man who had a peaceful, profitable relationship with Florida for decades. The ONLY thing that's changed is the tinpot Mussolini in Florida's statehouse (and, of course, his political party's descent into complete asshattery).

May 11, 2023 at 11:26 AM

Ok so somewhat reasonable scenario here:

What if De Santis becomes president in 2024 or even 2028?

Then the real important thing here is... will he be included in Magic Kingdom's Hall of Presidents?!

Stuff to ponder.

May 11, 2023 at 12:44 PM

@thecolonel - I would agree that Disney didn't throw the first rock in the fight, but I think there's some validity to the fact that Disney could give a little more considering that WDW has not expanded as dramatically over the past 20 years than it did the previous 30. Do I think Disney needs to cave, and pay standard commercial rates for their property and operations in Florida? Absolutely not, but simply because they're the state's biggest employer shouldn't exempt them from paying a reasonably representative share to do business in what is now the 3rd most populous state in the US (leapfrogging New York).

With any relationship there is some give and take, which means Disney should be willing to give a little to help sort things out while also taking concessions from the State. By no means do I think Disney should give up their ability to manage their own development nor their special exemptions to other corporate laws (or even meeting DeMoron halfway on many of his demands), but there are ways for Disney to "grease the skids" so the 2 sides can find a compromise to restore what was a very healthy and fruitful relationship that has lasted over 50 years. As MAGA-ites are apt to do, DeMoron has injected issues of morality into what should be a purely business relationship, but I question Iger's tactic to counter with his "free speech" argument. While Iger is absolutely correct that a company has a right to free speech, the reason Disney had the obligation to fight back was because of the established business relationship between the company and the state was disrupted illegally by DeMoron, and the only leg the buffoon has to stand on is to rally his base to turn this into a morality test.

May 11, 2023 at 12:26 PM

@thecolonel your post on what DeSantis is is pure poetry. I salute you.

May 11, 2023 at 1:44 PM

Fair enough, Russell. Is Disney not paying commercial rates? I thought I understood Iger to say yesterday that they actually pay more with regards to real estate.

And thanks OldCream, haha, he's easy to skewer.

May 11, 2023 at 3:29 PM

I think what's "tough" here, for me anyway, is that I absolutely agree large businesses should pay higher tax rates — particularly in places like florida, where they get great deals at the expense of taxpayers with (imo) limited benefit to the state. but that's not how florida has ever operated. it's always operated under the mindset that lower taxes for businesses is, well, the way to do business.

so, I think disney should pay higher taxes (just like many other businesses that have fled to florida) but this situation gives the game away as it relates to late-stage republicans. they don't care about economic conservatism except in so much as it enriches themselves or punishes those they despise. it's not great!

May 11, 2023 at 7:43 PM


May 12, 2023 at 2:41 PM


May 12, 2023 at 6:49 PM

So I guess that makes Disney the lesser of two evils, Colonel?

May 12, 2023 at 11:04 PM

Ignoring the nonsense about Disney picking up stakes and moving WDW somewhere else, can anyone else see this tit-for-tat getting bad enough that Disney and DeSantis try to really draw blood? If things get crazy enough, I could see Disney moving the reservations call centers from Orlando and Tampa to say, Atlanta, Charleston, or Charlotte, or Disney or the state spiking the deal to move WDPEP to Lake Nona. It’d be extreme, but then I never thought things would get as far as it has, either.

May 13, 2023 at 12:54 AM

Disney will continue to invest in Florida regardless of what happens here because Universal is investing and they are still running a business that needs to stay competitive. 5 years from now if people are going to Universal and saying its better than Disney, and it's because Disney didn't make investments over this, that would be bad for Disney.

I think there is no chance Desantis wins this lawsuit, him and the Republicans in the state legislature have incriminated themselves far too much and Disney now has complete control over the situation. This was a stereotypical case of one party playing chess while the other was playing checkers. I think either they will agree to de-escalate and drop the lawsuits (which would make the most sense, but with Desantis acting the way he has been, that may not happen) or Disney will win and Desantis will take a page from the Trump playbook and say the court is rigged and try to play it off like he got cheated somehow.

May 13, 2023 at 1:36 AM

“Never play chess with a pigeon. The pigeon just knocks all the pieces over. Then sh*ts all over the board. Then struts around like it won.”

May 13, 2023 at 11:38 AM

disney was here in FL long before desantis was born and they will be here long after he's forgotten...he's merely a road bump for them

May 16, 2023 at 3:09 AM

There are some serious misconceptions about this whole situation. First of all, the Governor of Florida and the state's number one tourist attraction are on the same side -- or should be. They are both in the business of living off tourism!

Second, this is not some "tit for tat" feud, fight, battle, or whatever you want to call it. De Santis has been attacking Disney for petty, personal reasons, and Disney is simply defending itself.

This whole thing is incredibly surreal, because DeSantis is acting like Disney is public enemy number one, instead of the greatest thing to ever happen to the state of Florida. It's overwhelmingly the latter; how many billions does Disney World bring into the state every year?

I am very saddened that our escapist happy place is getting impacted by today's toxic politics. Disney World is a place for families, and children in particular should be able to enter and be shielded from the ugliness of today's world. I hope that Disney can preserve this bubble of escape and fantasy that makes it such an ideal vacation destination.

P.S.: Disney should also sue him for diffamation, either now or, at least, when he leaves office. In one of his typically incoherent statements, he was accusing Disney of "sexualizing children", apparently parroting some kind of QAnon nonsense.

P.S.S.: I've critisized thecolonel in the past, but I gotta say, he really nailed it, in his dissection of the petty, small minded troll currently occupying the post of Florida governor. This is a man who was berating children for wearing masks at school!

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