Florida Governor Ron DeSantis solidified who will oversee Walt Disney World (DIS) after the politician signed a bill into law that allows him to take control of the company's long-standing special tax district.
"The corporate kingdom finally comes to an end," DeSantis said at a press conference following the bill's signing on Monday. "There's a new sheriff in town, and accountability will be the order of the day."
DeSantis, who rebranded the district previously known as Reedy Creek to the "Central Florida Tourism Oversight District," hand-selected the five board members who will now oversee Disney's municipal services. Previous board members were selected by Reedy Creek, which was fully controlled by Disney.
"The good question now is what will be the impact of the new board that he appointed," Richard Foglesong, Disney historian and author of the book "Married to the Mouse: Walt Disney World and Orlando," told Yahoo Finance Live in an interview on Tuesday.
"We have a five-member board of supervisors that consists principally of cultural warrior types, Christian nationalist types. ...I think there is an issue here," he warned.
DeSantis' board includes Bridget Ziegler, a conservative member of the Sarasota County School Board and co-founder of Moms for Liberty; Martin Garcia, an attorney who runs investment firm Pinehill Capital Partners, which donated $50,000 to a DeSantis-aligned political committee; and Ron Perri, chairman and CEO of The Gathering USA, a ministry "of evangelism, discipleship and mission opportunities for men."
"The Disney company is the major manufacturer of culture in the United States," Foglesong said. "When you have people appointed to a board who can appropriately, fairly by their own description, be called cultural warriors and Christian nationalists. ...I think that's a combustible mix."
Foglesong noted there should not be much change to Disney's day-to-day operations given a full dissolution did not occur: "[Disney] had special powers, and it still has those powers."
DeSantis previously suggested he would fully strip Disney of its special tax privileges, throwing the district's $997 million worth of bond debt and some $163 million in annual tax payments into question — a sizable fear among local taxpayers.
However, DeSantis stressed Disney is still responsible for its municipal debts and that local governments would not raise taxes.
Disney did not respond to Yahoo Finance's request for comment, although the company told other outlets last month it would not fight the governor's takeover.
Why it matters and how we got here
The 40-square mile area, known for years as the Reedy Creek Improvement District, allowed Disney to operate as a self-governing entity since its inception.
Disney, in addition to paying property taxes to Orange and Osceola counties, paid taxes directly to Reedy Creek. In turn, the district used that money to fund Disney's various theme park projects and operations, including infrastructure upkeep.
That means Disney controlled all of its utilities and infrastructure, set building codes, operated its own emergency services and fire departments, and could expand and grow whenever it wished — all without local or state government interference, until now.
In addition to the newly named board, the bill will end some of Disney's other privileges, such as its exemption from adhering to Florida building codes, along with its exclusion from state regulatory reviews and approvals.
The battle over Disney's special privileges began in April of last year — largely seen as a politically-targeted response over the company's reaction to the so-called "Don't Say Gay" bill.
The bill states: “Classroom instruction by school personnel or third parties on sexual orientation or gender identity may not occur in kindergarten through grade 3 or in a manner that is not age appropriate or developmentally appropriate for students in accordance with state standards.”
At the time, then-CEO Bob Chapek, who initially decided not to speak publicly on the matter, opted to work behind the scenes in a failed attempt to soften the legislation.
The executive eventually reversed course following intense backlash, publicly denouncing the act during the company's annual shareholder meeting on March 9, 2022, in addition to directly apologizing to employees in a company memo.
Chapek's mishandling of the situation has been categorized as one of the many catalysts for his ousting, as Bob Iger returned to the CEO chair in November.
Alexandra is a Senior Entertainment and Media Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]
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