DeSantis Violating Disney’s Free Speech, Florida Residents Claim in Suit

Erik Larson
Wed, May 4, 2022


(Bloomberg) -- Florida Governor Ron DeSantis trampled Walt Disney Co.’s constitutional right to free speech by dissolving the company’s debt-issuing district as punishment in a political fight, three residents claim in a lawsuit.

The violation of Disney’s First Amendment rights will result in taxpayers being forced to foot the bill for the district’s debt, estimated at $1 billion to $2 billion, according to the suit filed Tuesday in federal court in Miami.

DeSantis, a Republican and potential 2024 presidential candidate, signed a law April 21 repealing the Reedy Creek Improvement District after Disney announced its opposition to the state’s new parental rights law that restricts classroom instruction on sexual orientation or gender identity.

“Corporations are obviously capable of expressing themselves, as Disney did when it spoke out against the ‘don’t say gay’ bill,” the residents said in the complaint. “If a government retaliates and attempts to punish a speaker’s freedom of speech, they are violating the speaker’s constitutional rights.”

DeSantis’s office didn’t immediately respond to a request for comment.

The dissolution of the Reedy Creek Improvement District is set to take effect on June 1, 2023.

According to the suit, Florida is violating a 1967 statutory agreement the state entered into when it formed the Reedy Creek district. The state is also accused of violating the taxpayers’ due process rights under the Constitution.

Disney vs. DeSantis: ‘Florida needs Disney World,’ Harvard professor says

Mon, May 2, 2022

Harvard Business School Senior Fellow Bill George examines the financial outcomes of Florida Governor Ron DeSantis revoking Disney's special tax status and Disney's values.

Video Transcript

DAVE BRIGGS: It's almost pay per view worthy, Disney versus DeSantis. It is the battle dividing Florida along party lines. But across the country, CEOs in all industries are eyeing the daily developments here, wondering how it might impact their company, how they should navigate these choppy political waters. Bill George is the former chairman and CEO of Medtronic, now a professor at the Harvard Business School. He joins us now. Good to see you, Bill.

BILL GEORGE: Thank you.

DAVE BRIGGS: Let's go back, if we can, to the start of this mess. Disney CEO Bob Chapek wanted to stay out of the controversy over Disney's so-called Don't Say Gay legislation, but the combination of angry employees and former CEO Bob Iger coming out against the law. He really had no choice. He offered this relatively mild statement. How do you think he handled it?

BILL GEORGE: Well, he should have thought about all these things first, I believe. I don't think he did his homework. We're in a different world today. He was acting like he was back in the 1990s. In this world of 2022, you have all kinds of stakeholders who expect you to take a position, especially your employees. Employees have found their voice. And particularly, in this post-COVID world, they want to be respected, whether it's a Minneapolis CEO when George Floyd was murdered or people on the LGBTQ+ side that want to be respected and heard from. They want their CEOs to speak on their behalf.

And when they don't do that, as Bob Chapek didn't, they get very upset and it leads to the kind of uproar we've had. And then they get to the worst case, which is a political crossfire with the politicians. And that's the last thing any company wants to get into. And Disney is right in the thick of it, and it's struggling to get out of this mess, as you called it.

DAVE BRIGGS: Even after the statement, he had the employee walkout. So what could Bob have done to keep them his employees happy and somehow stay out of the crosshairs of the governor?

BILL GEORGE: He should have gone back months before, talked to his board, talked to his leadership team. What do we stand for? Disney has always been very pro-family, but also very gay-friendly, if you will. And they should have made those points very clearly. And when this legislation started in Florida, they should have had a position ready to go. And they didn't have to lead with their chin, but they should have had a position that was true to their mission and values of what Disney is that accepts everyone for who they are.

DAVE BRIGGS: So, as I mentioned, CEOs across the country are shaking a bit in their boots. What are you hearing from them, and what's your advice?

BILL GEORGE: Well, they're very concerned. They don't want to get caught into this crossfire either. But they are all going back now, I think, in really thinking about, what do I stand for? What issues should I get involved in? And when shouldn't I get involved in? And how do I avoid getting in the crosshairs of some politicians. They may get caught anyway, but if they're true to their mission and values, this is a question of, should I get out of Russia because of the Ukraine war?

These things are coming up every way right now, and CEOs today need to know how to lead through a crisis because we go from one crisis to the next. We go to from COVID to George Floyd to Russia and Ukraine. And there's probably another one just around the corner. So they need to be prepared to deal with these and have a position that's true to their company.

For instance, Johnson & Johnson has taken a very clear position that we're there to help people. And so if that means we're going to stay in Russia, we have lifesaving drugs, we don't want to get out. Hey, I respect that position. It goes to their credo. That's what each CEO should do, to go true back to their mission and values.

DAVE BRIGGS: A fascinating poll came out last week showing the majority of the country is against the government punishing business over their political beliefs. But the fascinating part within this is Democrats were far more supportive of business than were Republicans. What do you make of that political dynamic we have today?

BILL GEORGE: I'm smiling because when I was a boy growing up, the Republicans were seen as the party of big business. And Democrats are seen as the party of the working class, the blue collar workers. And things seem to have flipped. And we're much more into cultural wars. Businesses are not interested in that. They're interested in helping their customers make a difference in their lives, whether Disney is bringing fun to people or organizations in the apparel business, bringing joy to them, or Medtronic providing good healthcare to help save lives. That's what they want to do. But they need to represent all their employees and all their stakeholders. And I think that's what they've lost sight of here.

DAVE BRIGGS: What's fascinating is, I read this statement, and I want you to guess what party it comes from. A senator-- it's very simple. We need to see a majority of American corporations as American. They don't act in the best interests of the country. They act in the best interest of shareholders, period. Was that a Republican or a Democrat?

BILL GEORGE: I have no idea. I probably would have normally would have guessed a Democrat today, maybe a Republican. But I'll tell you this. It's not just the shareholders today. It's not just the world it was in the '80s and '90s, the shareholder primacy. It's the world of stakeholders. They have to operate in the best interests of their customers. They have to operate in the best interests of their employees. And they need to find an alignment with those interests with their shareholders' interests.

DAVE BRIGGS: That statement continued. We are, as policymakers, we need to be acting in the best interest of the country, not big business. It sounded like Elizabeth Warren, it was Marco Rubio. Stunning when I got to the finish of it. How do you think this plays out for Disney? Their special exemption wouldn't actually go into effect until June 2023. Can they wait out the governor?

BILL GEORGE: Yes, they may have to. There's this billion dollar question about who's paying off the bonds, which legally have to be paid off. And if that's not clear, I'm not sure Orange County has the money to do that, the Orlando County. And so they are going to have a continued battle. But understand the governor has different objectives than Disney. And so Disney can't meet all of his needs because he is working a whole political angle here.

And that's why I say, they don't want to get caught up in that, but they have to run a great Disney World, I can tell you that, that welcomes everyone to their premises. And that's the most important thing for them. And they have to make sure this doesn't turn against them. And they probably have some legal recourse on this whole latest legislation that had to do with pulling back that special district. And there are many unintended consequences, frankly, that have not been thought through there that it will give Disney more ammunition.

A good example is Ed Bastian at Delta a few years ago, the Georgia legislature, withdrew a $41 billion-- a million dollar tax break that they got on a fuel savings. They've been giving it for 30, 40 years. And he stood up, and he said Disney's values are not for sale. A year later, the legislature restored that and retroactively.

So in the end, Disney didn't really throw out-- Delta didn't really get hurt by that. So I'm optimistic that Florida needs Disney World. I can tell you that. It's a huge revenue producer. I was just in Orlando, actually, for a soccer game, not for Disney World. But I can tell you, it's created everything around there. They need that. And all the merchants, all the hotel owners, and all the restaurants desperately need Disney World. They-- Florida can't do without Disney World. So it's a question, who needs who more?

DAVE BRIGGS: 70,000 plus jobs as well. Bill George--

BILL GEORGE: Exactly.

DAVE BRIGGS: --Harvard professor, former chairman, and CEO of Medtronic, it is tricky times to be a CEO. Thank you, Bill.