News Reedy Creek Improvement District and the Central Florida Tourism Oversight District

[lazyboy97o]

So there are two questions:

1. If the Swan wanted to add hotel rooms, does the developer agreement say that Disney has decision-making authority there, which Disney did not previously have (e.g., through an existing contract with the Swan)?
2. If the answer to (1) is yes, is that unusual for special districts in Florida?

It's a fact that other Florida SD boards include people who have direct and substantial financial interests in the board's decisions. The Wilton Drive board is composed entirely (IIRC) of people who own land and businesses there.

I believe that yes, the development agreement does require the Swan get Disney’s approval to add rooms because Disney has the right to those rooms. I’m not certain an agreement to which they are a party would matter to the District and how it operates.

 

[Fordlover]

Whether this decision was good or bad for the bottom line is up for debate. In reference to the fiduciary duty of the board I don’t believe anything they did is a violation even if it resulted in a negative impact to the bottom line. The board is obligated to act in a manner that they believe is in the best interest of the corporation. Directors have a duty to be loyal to the corporation over themselves (no self dealing) and they are required to make decisions for the benefit of the corporation and the stockholders. I see no evidence that Chapek or anyone on the board acted in their own self interest and no evidence that they acted in a way that they didn’t feel was in the best interest of the corporation and the shareholders. Whether the decision ultimately is good or bad for business isn’t the point. Many would say Disney should not have bought Fox. That doesn’t mean the board failed to meet their fiduciary duties when considering that acquisition.

Corporations take many different political positions all the time. It’s impossible not to. Disney was one of 100s of company who publicly opposed this bill including Comcast/Universal, most major airlines and hotel chains, big tech companies, other streaming competitors, etc, etc. Just about every one of Disney’s competitors. It was not a unique action but it was uniquely singled out by a politician looking to score political gain and donations.

Usually your first instinct is the correct one. In this case Disney kept quiet initially, even if they were working in the background regarding the law. The vocal minority pressed the issue and forced Chapek into speaking out. Because Disney's business is entertainment, seems to me they should focus on that. Considering the many recent box office duds I think it would be wise to refocus Disney on what they excel at: providing entertainment customers desire to consume, which would benefit shareholders in the end.

 

[lazyboy97o]

Makes sense. I hadn't considered what ulterior motives CFTOB might have had. So basically, regardless of whatever the superficial legal reasoning of their argument is, they're really just upset that the development agreement would prevent them from enacting their plan to "stick it" to Disney by letting the competition develop on the doorstep of the parks.

That’s my hunch. It’s just speculation.

If I was on the Board I would have waited to say anything about the agreement. Bring in the consultants to review the plan, cook up the deficiencies and then take action. That way you have some alternative need to point to as needing to alter the agreements. But they were mad that they couldn’t just start interfering and are now acting.

 

[GoofGoof]

This is where I lose you. Disney can't threaten to leave, we both agree. So where is the counter of Florida loosing Disney's tax money crippling the state coming from? You can leak out the figures on how many tax dollars Disney brings in to Florida.....but absent Disney going away, that tax revenue is STILL going to be coming in no matter what. There is no counter if there is absolutely no threat of those tax dollars disappearing.

They can’t pick up WDW and move it but they could impact the state in other ways. Pull back the jobs moving from CA. Pull their cruise ships out of the state. Invest less in growth at WDW which long term will reduce tax revenues. The tax dollars won’t go to zero, but they certainly could go down as the direct and indirect result of these actions. My guess is if Disney prevails in court then we don’t see any major changes from this that negatively impact the state.

 

[GrumpyFan]

If Disney really wanted to hurt FL, which I don’t believe they do, they could move their cruise ships out completely. Baltimore or Galveston would be more than happy to take the business. That would be a big blow to the state cruise industry and a trickle down impact to businesses who get people from the airport to the cruise or hotels and restaurants that have extra business from people going on a cruise.

I'm not sure it would hurt Florida as much as it would Disney. The amount of jobs for cruise line workers is small. Sure, it would impact taxes and revenue, but I could easily see other cruise lines filling those spots quickly.
Moving the ports further away from the Caribbean would mean added fuel costs for the ships to make their way to Castaway and Lighthouse point.
Also, those other ports don't have as big of a draw for cruisers either. The ports aren't as nice, and they just don't have the same appeal as Florida. I've heard that many of those don't sail completely full. They would also lose a lot of the combos where people do WDW and a cruise back to back. I don't think those are a significant portion but they do add to the overall number of passengers.

 

[lazyboy97o]

They don't even need to follow through and do that. The threat of doing it would create enormous leverage over Disney. That's clearly what they want.

They want to be able to say Disney should adjust Disney+, movie, and whatever other content. Even if that isn't an action available to the board. If they can can give a nod to "We're so distracted by this content we don't like that we're thinking of opening a high rise office building on the land between Animal Kingdom Lodge and Animal Kingdom."

They don't actually need to build that high rise, but they do need it to be a credible threat. Anything that removes it as threat option is a win for Disney.

Nothing gives a threat more power than actually acting on it. I agree that they wouldn’t need to do anything, but actually doing it definitely adds weight. It’s also just such an easy grift and I no longer give the benefit of doubt.

 

[Disstevefan1]

Moving DCL wouldn't necessarily have a negative impact on its Financials- especially if the state continues trying to find ways to punish Disney since DCL could be a potential target for petty vindictive interference.

Not building more WDW hotels isn't necessarily "neglecting" WDW, either - but if the state is going to continue to seek out ways to cost Disney money then perhaps that money is better spent in places where they won't have to mount legal battles to build and won't face building inspectors who could potentially care more about pleasing the governor and his handpicked CFTOD board than actually making sure the building is up to code. Those added costs, delays, and headaches would alter the cost-benefit analysis when choosing between multiple options and locations. They could simply save any WDW projects for a time when a reasonable board is in place at CFTOD, which may be several years down the line if Disney somehow loses the court case.

At this moment it may seem like the end of the "world" but let's all hope, this is just a bump in the road for WDW and Florida.

My hope is that WDW and Florida can safely get past the "DeSantis era" this becomes just a footnote in the long and successful partnership between WDW and Florida.

 

[GoofGoof]

So TWDC would purposely neglect WDW and relocate DCL (both cash cows for the company) to prove a point?

The company needs these dependable sources of income.

Not trolling, just asking.

It has nothing to do with proving a point. If they lose the lawsuit the state will be attempting to damage their business any way they can. WDW cannot be moved but you can move the other stuff listed to avoid as much of the retribution as possible. If they attack WDW now what is to stop them from attacking the cruise business next? The difference is the ships can be moved. Not tomorrow, but over time it wouldn’t be hard to find a new permanent home. States would kill to have DCL based there. Bet Disney wouldn’t have to pay a dime for relocation. Same goes for office jobs. Many states are still business friendly. They still want jobs and the economic benefits even if the company is woke. The FL government right now does not.

 

[GoofGoof]

I must disagree. As I said above, Disney has spent $$$$ upgrading their terminal at Port Canaveral and finishing work on the berth they acquired from Carnival at Port Everglades. The Caribbean is the bread and butter of the US cruise industry. The only other options would be Houston or New Orleans.

Why port further away from your most lucrative routes that include Castaway Cay and the addition of Lighthouse Point next year?

It’s not ideal, but the DCL could be moved. WDW cannot. Yes they would throw away investment but what if the state decides to control that business too?

 

[Notypeo]

They can't pack up WDW and move to another state, but they can relocate DCL home ports, slow/stop construction of new hotels in FL (and prioritize new DVC builds in CA over FL, possibly with more Hilton Head type beach resorts outside of FL), and move office workers to other states. None of that would equal the impact of moving all of WDW, obviously, but it's not nothing, either. I'm sure Disney would prefer to have the courts rule in their favor over those options, though.

In the immediate context of this dispute, any suggestion of disinvestment is probably some combination of a bluff and “we were about to fix the yeti until all this happened.”

But I can see the whole episode having an impact on the company’s thinking as far as expansion within existing properties, versus expansion beyond them.

Here’s an analogy. Imagine your family owns two successful, beloved restaurants on either side of town. You “grow” them by charging an arm and a leg, but they’re still packed every night of the week.

Some in the family have pushed to expand into more of an actual chain. Sure, that might cannibalize sales at the existing restaurants, and, after expansion, the profits at every given site might be less than the profits-per-site of you stay at two. But on the whole, profits will be larger. Others have pushed back, emphasizing the risks and the fact that the family has a good thing going with the two-unit setup.

Now imagine if the landlord at the current flagship turns on you….

 

[GrumpyFan]

What if they ran a campaign in Florida to have Floridians reach out to their elected officials regarding the unfairness that is being foisted upon them by the governor and legislature? They could pad it with how much they've invested in Florida and the economy, how they've responsibly built and maintained their property and then make an appeal to Floridians to contact their representatives and the governor to stop the unfair attacks. How would something like this play?

 

[el_super]

The Caribbean is the bread and butter of the US cruise industry.

Yes, but they are also testing Australia this year and added capacity in Europe. Additionally their already announced plan to move into Asia. Spending money to grow their international business instead of growing their business in Florida is always an option, and more than likely they were planning to spend less in Florida after Lighthouse Point anyway.

Outside of these, they could suspend or slow development in Florida, but that will hurt them more than the state. Sadly, they seem to be over a barrel here. Theirs and Florida's best bet would be for this to be settled and a return to what they had or something similar.

Yep. That will have to be their ultimate goal because they will need to work with Florida for years and years to come. They need to get this settled and out of the headlines ASAP.

 

[WDWHero]

Meanwhile in Florida, insurance industry still in shambles, glad Gov is staying concentrated on RCID, ya know the important stuff

 

[Dranth]

Seems bad

Stop it. It is the will of the people!

 

[Andrew C]

Seems bad

this is separate from the topic at hand...

 

[JohnD]

The House is taking up SB 1604 which, among other things, revokes the Disney-RCID development agreement. They're in 30 minutes of debate.

Request Rejected

 

[RamblinWreck]

What if they ran a campaign in Florida to have Floridians reach out to their elected officials regarding the unfairness that is being foisted upon them by the governor and legislature? They could pad it with how much they've invested in Florida and the economy, how they've responsibly built and maintained their property and then make an appeal to Floridians to contact their representatives and the governor to stop the unfair attacks. How would something like this play?

My guess is their legal team is going to advise them to stay as absolutely quiet as possible.

 

[WDWHero]

good point lol

 

[GoofGoof]

Usually your first instinct is the correct one. In this case Disney kept quiet initially, even if they were working in the background regarding the law. The vocal minority pressed the issue and forced Chapek into speaking out. Because Disney's business is entertainment, seems to me they should focus on that. Considering the many recent box office duds I think it would be wise to refocus Disney on what they excel at: providing entertainment customers desire to consume, which would benefit shareholders in the end.

So then we agree that there was no breach of fiduciary duties by the board or management . You like the original bill and don’t think Disney should be against it. That’s your prerogative to have that opinion. Disney execs and the board decide what the company does and doesn’t do. That is their job. You can’t please everyone. As a shareholder you should know what TWDC’s corporate values are and if that’s not something you can support you can sell the shares.

Disney is still very much focused on providing entertainment and based on their financials I‘d say a whole lot of people desire to consume it. I think I’ve said it a hundred times in this thread but here goes again, when Chapek made his public comments about this bill TWDC didn’t stop all business and focus just on this. Business went on as usual and still does. Some lawyers are going to court now and it costs them some money, outside of that nothing has changed. What people should be questioning is why the Governor isn’t focused on Governing the state. There are real issues that he’s neglected in his petty fight with the mouse. While people’s houses are underwater and there’s an insurance crisis he’s holding Press tantrums obsessing over winning against Disney at all costs. Talk about someone who has lost focus on what his actual job is.

 

[GrumpyFan]

That's probably the wisest move for the moment. Don't do a "Chapek" and shoot themselves in the foot.
Although, they can do a LOT behind the public eye to influence things.