Disney CEO Iger blasts DeSantis: ‘This is plainly a matter of retaliation’
Disney CEO Bob Iger lambasted Florida Gov. Ron DeSantis for his perceived targeted retaliation against the company Wednesday, saying the continuing feud over the former Reedy Creek district is “not about special privileges, or a level playing field, or Disney in any way using its leverage around the state of Florida.”
Iger’s comments came as Disney reported strong revenue in the division that includes its theme parks. Walt Disney World — the center of the Florida fight — saw an earnings decrease thanks to higher costs even while attendance grew.
He said Disney’s lawsuit filed against DeSantis last month “made our position and the facts very clear:” that DeSantis’ actions against the company were retaliatory for Disney speaking out against Florida’s so-called “don’t say gay” law last spring.
“We operate responsibly, we pay our fair share in taxes, we employ thousands of people — and by the way, we pay them substantially above the minimum wage dictated by the state of Florida,” Iger said. “… Does the state want us to invest more, employ more people, and pay more taxes, or not?”
Responding to a question about investor risk over the issue, Iger said Disney’s former Reedy Creek Improvement District is one of nearly 2,000 special districts in Florida and the others have not seen the same treatment.
“If the goal is leveling the playing field, then the uniform application of the government oversight of special districts needs to occur,” he said.
Iger also refuted the claim that Disney was trying to protect its tax breaks in the fight over the district, which is now overseen by a DeSantis-appointed board.
He said Disney invests in Central Florida as its largest taxpayer and contributed over $1.1 billion in state and local taxes last year, including a significant real estate tax from the district. The company has filed several lawsuits against the Orange County property appraiser in recent years, alleging the office inflated land values.
“We’re proud of the tourism industry that we created, and we want to continue delivering the best possible experience for guests going forward,” Iger said. “We never wanted, and we certainly never expected, to be in a position of having to defend our business interests in federal court, particularly having such a terrific relationship with the state.”
During Wednesday’s financial report, CFO Christine McCarthy said Disney expects increased costs through the remainder of its financial year in Florida, due in part to paying higher wages under a new union contract.
In March, a union coalition representing Disney’s workers successfully negotiated to increase the resort’s minimum wage from $15 to $20.50 an hour by October 2026. Disney’s lowest-paid workers will earn at least $18 an hour by the end of this year.
McCarthy and Iger also referenced ongoing layoffs across the company announced during the last earnings call in February.
Disney plans to cut 7,000 workers as part of a larger $5.5 billion cost-cutting measure and has completed two of three anticipated rounds of layoffs so far. Iger said the company is “on track to meet or exceed” its overall savings goal.
“There’s been great cooperation throughout the entire company, which has been really rewarding … and of course, there’s the reality of headcount reductions, and we’re going through those, but there’s also other things,” McCarthy said.
In the quarter ending April 1, Disney’s Parks, Experiences and Products division reported $7.7 billion in revenue, up over $1.1 billion from the same period in 2022. The division’s operating income was $2.1 billion.
Growth at Disney’s domestic parks was “slightly unfavorable” compared to 2022’s second quarter, and Disneyland’s financial performance was better than Disney World’s, according to a release.
Disney does not release individual parks’ finances. McCarthy said the U.S. parks’ operating income “came in slightly below the prior year but was still up over 50% versus 2019.”
The company’s international parks “were a bright spot” early this year, McCarthy said.
Shanghai Disney Resort and Disneyland Paris had higher attendance and increased guest spending. Hong Kong Disneyland was also open more days this year compared to early 2022, when it closed for most of the quarter due to COVID-19.
“We do expect a really solid year overall for our domestic parks,” McCarthy said. “That being said, we also expect increased costs. … But we think that this is a growth business for us.”
krice@orlandosentinel.com and @katievrice on Twitter