The Corner

Economy & Business

Bob Iger Ups the Ante

Then-executive chairman of the Walt Disney Company Bob Iger at the world premiere of The King’s Man at Leicester Square in London, England, December 6, 2021. (Hannah McKay/Reuters)

In my column today, I asked of Disney CEO Bob Iger, “How much shareholder value is he willing to burn in order to pursue a political vendetta?” Now, we have one answer:

On Thursday, Mr. Iger and Josh D’Amaro, Disney’s theme park and consumer products chairman, showed that they were not bluffing, pulling the plug on a nearly $1 billion office complex that was scheduled for construction in Orlando. It would have brought more than 2,000 jobs to the region, with $120,000 as the average salary, according to an estimate from the Florida Department of Economic Opportunity.

The project, known as the Lake Nona Town Center, was supposed to involve the relocation of more than 1,000 employees from Southern California, including most of a department known as Imagineering, which works with Disney’s movie studios to develop theme park attractions. Most of the affected employees complained bitterly about having to move — some quit — but Disney largely held firm, partly because of a Florida tax credit that would have allowed the company to recoup as much as $570 million over 20 years for building and occupying the complex. . . . About 200 Disney employees already relocated to Florida from California.

While “the company’s battle with Mr. DeSantis and his allies in the Florida Legislature figured prominently into Disney’s decision to cancel the Lake Nona project, according to two people briefed on the matter, who spoke on the condition of anonymity to discuss private deliberations,” further down in the New York Times report by Brooks Barnes, we learn that this is less about the company changing its mind than about changing its CEO:

The Lake Nona campus, about 20 miles from Disney World near the Orlando International Airport, had been championed by Bob Chapek, who served as Disney’s chief executive from 2020 until he was fired last year. Mr. Iger, who came out of retirement to retake Disney’s reins, was much less enthusiastic about the project — even before the company became mired in its battle with Mr. DeSantis. As soon as he returned to Disney, Mr. Iger began telling lieutenants, for instance, that it made little sense to move Imagineering so far away from Disney’s movie studios.

I had to laugh when Barnes described DeSantis as making a “scorched-earth attempt to tighten oversight of the company’s theme park resort.” It would be nice if more government efforts to tighten oversight over business were described as earth-scorching.

If Iger is walking away from half a billion dollars in tax breaks and the associated benefits Florida offers in order to score political points against DeSantis, this battle is likely to go on a while without any regard for the interests of Disney shareholders — and it’s inevitably going to impose some costs on Floridians, too. DeSantis has taken some important stands here and is likely on stronger legal ground than most people think, but it would still behoove him to use that leverage to make some sort of peace with Disney.

Exit mobile version