A recent corporate filing by the Walt Disney Co. admits that its unrelenting wokeness and battles with Florida Gov. Ron DeSantis and Republican leaders in Tallahassee may have taken a big financial toll.
Disney recently filed its annual financial report with the Securities and Exchange Commission that lays out for current and potential investors some observations about its past performance and future risks.
Analyzing the statement, published on Tuesday, the website That Park Place argued that Disney has signaled to its investors that its standing as a pop culture icon and prominent entertainment provider has taken a major hit because of its latest woke content and its fight with DeSantis over last year’s opposition to Florida’s Parental Rights in Education law — which bans school districts and classroom teachers from implementing lesson plans rooted in gender identity or sexual orientation.
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Disney argues that some of its woes are attributable to attendance at movie theaters not returning to pre-pandemic levels, the cost of providing content such as the sports broadcasts it carries on ESPN, the expenses and challenges of doing business overseas and keeping up with technological advances.
But Disney also seems to admit it’s taken a hit by waging a left-wing culture war, as in a portion of its SEC Form 10k quoted by That park Place:
“We face risks relating to misalignment with public and consumer tastes and preferences for entertainment, travel and consumer products, which impact demand for our entertainment offerings and products and the profitability of any of our businesses. … Generally, our revenues and profitability are adversely impacted when our entertainment offerings and products, as well as our methods to make our offerings and products available to consumers, do not achieve sufficient consumer acceptance.”
Disney has in recent months released a series of bombs that lost money or barely broke even. One common denominator in those films, most of which were animated, was the outright advocacy for the LGBTQ agenda.
“Further,” Disney added in reference to its political brawl in Florida, “consumers’ perceptions of our position on matters of public interest, including our efforts to achieve certain of our environmental and social goals, often differ widely and present risks to our reputation and brands.”
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These consumer “tastes and preferences,” as Disney said, affect almost every aspect of its business, including “revenue from advertising sales …, affiliate fees, subscription fees, theatrical film receipts, the license of rights to other distributors, theme park admissions, hotel room charges and merchandise, food and beverage sales, sales of licensed consumer products or sales of our other consumer products and services.”
That Park Place columnist Lew Ghost also offered takeaways from other parts of Disney’s filings.
For one thing, Ghost wondered why Disney would admit to having “social goals.”
“What the hell business does a public for profit company have enacting/espousing ‘social goals’???” Ghost wrote. “I haven’t read a zillion 10k’s but a few and I’ve NEVER seen a company say ‘Hey, we’re in business to please our customers but we have SOCIAL GOALS and if they don’t like them and aren’t pleased, screw ’em and we risk all on that.’ EVER.”
Ghost also noted that in the “Risks” section of its statement, Disney glossed over the costs of being stripped of the special protections that went to its previous Reedy Creek Development District in Orlando.
Disney admitted “new laws and regulations … may require us to spend additional amounts to comply with the regulations, or may restrict our ability to offer products and services in ways that are profitable, and create an increasingly unpredictable regulatory landscape.”
Ghost noted that would include the “huge” expenses of new taxes that had been excused before DeSantis and lawmaker dissolved Reedy Creek, as well as the recurring legal fees, compliance with the new district’s mandates, potential criminal and civil issues created by alleged “illegal freebies” to Reedy Creek employees and more.
The columnist also pointed out that Disney admitted that these litigation costs are not going away soon.
In other parts of the report, Ghost noted that Disney reported:
- A 14% increase in its passenger days on its ocean cruise line compared to just 4% from hotel stays, meaning people are less inclined to stay at the parks.
- A decline in domestic advertising revenue due to a 14% drop in impressions that reflected lower average viewership.
- Walt Disney World was open all 52 weeks of their year being reported on, while Disneyland in California was open only 22 weeks. “On purely financial terms,” Ghost observed, “it is hilarious that they love [California Democratic Gov.] Gavin Newsom and hate Ron DeSantis.”
- That in 2024 it will spend at least $10 billion on licensed content for sports, out of a total pot of $25 billion, which signals less confidence in their upcoming movies.
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As for movies slated for theatrical release, Ghost noted the series of flops are hurting “downstream revenue sources” such as merchandise, licenses, theme park attractions, shows on their cruise ships, and so on.
Ghost wrote those aspects of Disney’s business “are serially tanking.” “Bad movies that lose money are the cancer that infects so many other areas of corporate behavior,” he added.
Along that line, he pointed out that Disney also acknowledged that its decrease in licensing revenue was attributable to lower sales of merchandise rooted in fan favorites such as “Star Wars,” “Frozen,” “Toy Story” and “Mickey and Friends.”
The company, he added, does not mention that its new content shows no ability to generate replacement revenue.
“So if the new stuff is tanking, everything else downstream depends on it, and your ‘fallback’ classic and popular IP’s are selling ‘lower’ than before, where does that leave you going forward?” Ghost wrote. “Up a reedy creek without being able to kiss-de-girl?”
“Let’s just say that in what they say, how they say it, and what they do NOT say or get specific about, this is NOT the picture of a confident, moving-forward, and strong international company worth billions of dollars with investors big and small putting faith in them based on the very recent past to be just that,” Ghost concluded.
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