Disney is in 'fool around, find out' mode

An illustration of Mickey arm wrestling with a man from Florida.

By Ryan FaughnderCompany Town Senior Editor

April 4, 2023 6 AM PT

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Credit Bob Iger for being prepared for the Florida question at the Walt Disney Co.’s annual shareholder meeting.

It was hard to not see the chief executive’s opening video — paying homage to the company’s legacy in the former swamp lands of central Florida — as a subtle taunt at Gov. Ron DeSantis, who has been battling with Disney for control of the area that’s home to Walt Disney World.

Iger addressed the matter head-on during the Q&A session Monday. Responding to one shareholder’s question, Iger criticized DeSantis for trying “to punish a company for its exercise of a constitutional right.”

“And that just seems really wrong to me, against any company or individual but particularly against the company that means so much to the state that you live in,” Iger added, calling the governor’s efforts “not just anti-business” but also “anti-Florida.”

Disney’s Florida battle started last year when Iger’s successor-turned-predecessor Bob Chapek, acting under pressure from employees, denounced a Florida law that limits instruction of sexual orientation and gender identity in younger grades.

DeSantis, presumed to be gearing up to seek the Republican presidential nomination, shot back by trying to strip Disney of its special privileges in the 43-square-mile area encompassing Disney’s parks near Orlando. He signed a law to dissolve the Reedy Creek Improvement District, which had acted as Disney’s own government since the Florida Legislature established it in 1967.

Ultimately, though, instead of doing away with the district entirely, DeSantis seized control of it through new legislation that allowed him to appoint members of the board who, under the prior arrangement, were essentially handpicked by Disney.

But Disney lawyers had another idea to gum up DeSantis’ plan. They secured a deal with the outgoing members that stripped the new board of its powers except the authority to “maintain the roads and maintain basic infrastructure,” according to one of the new board members.

DeSantis will surely challenge Disney’s attempt to evade state authority. He’s already called for an investigation into Disney’s deal.

How this will all play out is unknown. One thing’s not in doubt during this Sunshine State dispute, and that is Disney’s uncomfortable place at the center of American political discourse.

The tenor of the Q&A session at the shareholder meeting, often reminiscent of a contentious school board meeting, highlighted how much of a “political football” Disney has become, to borrow Chapek’s phrase to describe the situation he tried, desperately and with spectacular futility, to avoid during his short tenure.

Iger faced an AM talk radio call-in show’s worth of barbs during the meeting. Some callers took an adversarial tone against Disney’s “woke agenda,” as many cultural conservatives have taken to describing the company’s stance on LGBTQ issues and attempts to create inclusive and diverse content.

One man talked of Disney catering to “LGBTQIA+ — however many letters you want to add — lobbies” and repeated tropes about efforts to “groom children” by exposing them to certain ideas about gender and sexual orientation.

Iger handled the questions firmly but respectfully, acknowledging that parents have “different levels of comfort” with the kinds of content Disney makes and delivers for children.

“Our primary mission needs to be to entertain, and then through our entertainment, to continue to have a positive impact on the world, and I’m very serious about that,” Iger said. “It should not be agenda-driven, it should be entertainment-driven.”

That said, there was no sense that Iger was willing to back down from political stances that he feels are important to the company’s business and its employees.

Iger’s dealings with Florida are just one example of the not-messing-around approach he’s taken to his second tenure at Disney so far, as the company reckons with the costly streaming strategy that Iger put in place before he stepped aside as CEO in 2020.

Disney last week axed former Marvel Chief Executive Ike Perlmutter, long a source of annoyance for Iger and a backer of one-time proxy challenger Nelson Peltz, amid the company’s planned 7,000 job cuts. Marvel executive Victoria Alonso was fired after she moonlighted by producing a movie for Amazon, although her legal counsel is saying there are other reasons for her ouster.

If you happen to be on Disney’s bad side, this is starting to feel like — to paraphrase a popular online maxim — a “fool around and find out” moment at the company.

Stuff we wrote

— Writers Guild of America calls for strike authorization vote as talks stall. The call for a possible strike comes amid growing concern that writers will stage a walkout in a dispute over streaming compensation.

— Fox News defamation case headed to trial after judge rejects motion to dismiss. The ruling means the $1.6-billion suit will go before a Delaware jury this month, putting Fox News executives and anchors on the witness stand unless the sides settle.

— Will celebrities pay for Twitter Blue? Many are ready to lose the check. Twitter now gives verification check marks to Blue subscribers only. It will be a crucial test to see who is willing to pay.

— ‘Rattled with guilt,’ assistant director David Halls convicted for role in ‘Rust’ shooting. The assistant director handed the loaded weapon to actor Alec Baldwin on Oct. 21, 2021, on the “Rust” set. On Friday, Halls pleaded no contest to negligent use of a deadly weapon.

— Hollywood never did ‘Dungeons & Dragons’ justice. A new movie rolls the dice. “Dungeons & Dragons: Honor Among Thieves” is the latest stab at turning the decades-old D&D franchise into a blockbuster hit. The $150-million movie opened with a decent $38.5 million domestically.

— Are Hollywood movies backsliding on diversity? What the latest numbers say. Representation by people of color as movie leads and film writers has slid back to 2019 levels, according to UCLA’s Hollywood Diversity Report.

— ICYMI. E3 cancels 2023 event. Hollywood to drop COVID safety measures. ABC News senior managers out amid Disney layoffs. Roku to lay off another 200 workers.

Numbers of the week

Ultimate Fighting Championship and World Wrestling Entertainment will combine into one publicly traded yet-to-be-named sports and entertainment giant, majority-owned and controlled by UFC parent Endeavor.

Stocks of both Endeavor and WWE were down Monday, suggesting some skepticism of the deal on Wall Street.

The combined company is valued at $21.4 billion — $9.3 billion from WWE, $12.1 billion from UFC. But as LightShed’s Brandon Ross pointed out, the market will determine the firm’s true worth .

This deal is a coup for Ari Emanuel, who will rule the operation as CEO, with Vince McMahon staying on as executive chairman. The deal leaked on Sunday, Day 2 of WrestleMania 39 at SoFi Stadium in Inglewood, where Emanuel had ringside seats.

Numerous media conglomerates were rumored to be interested in WWE, which McMahon put up for sale after rejoining the company. Disney, NBCUniversal and Fox were said to be potential fits. Even Saudi Arabia.

With the new arrangement, the brand remains an arms dealer in the pricey market for live sports. Fees for sports rights are where it’s at right now, with streamers increasingly getting in the mix. WWE’s media rights deals with NBCUniversal, which airs “Monday Night Raw,” and the Fox Corp., which carries “Friday Night Smackdown,” are coming up for renewal.

How this will all work out is unclear. The continued involvement of UFC President Dana White and McMahon will surely be controversial. Also yet to be proved is how the two brands will mesh or complement one another. WWE matches are planned out and theatrical. UFC is bare-knuckled and undeniably violent.

Mixed martial arts have taken some of WWE’s younger male audience over the years. This deal could be a way to address that.

— Stephen Battaglio contributed to this item.

Three months into the year, the U.S.-Canada box office is down 28% from pre-pandemic levels, according to Comscore. Theater owners and studios have been saying that when there are more movies, ticket sales will increase accordingly. This year will be a big test of that theory.

One quarter can tell you only so much. It matters what kinds of movies are released, not just how many. The first quarter of 2019 had “Captain Marvel,” a huge hit that eventually did $427 million domestically. This year’s biggest release so far, “Ant-Man and the Wasp: Quantumania,” won’t come close to that. Technically, the movie that’s made the most money this year is “Avatar: The Way of Water,” released in December.