On June 9, The Walt Disney Company dropped a major bombshell when it was announced that Peter Rice — Chairman of Disney’s Entertainment and Programming — had been fired. Prior to his role at Disney, Rice had been an executive at 21st Century FOX, which was purchased by The Walt Disney Company in 2019. According to sources close to Rice, he was completely blindsided by the decision, which was made by Disney CEO Bob Chapek. The source said that Rice was not given a real reason for his firing and was told by Chapek that the decision was not personal.
Rumors had been swirling that Rice was in line to possibly take over Chapek’s position as CEO when Chapek’s contract ran out, something that will happen in 9 months. There were also reports that Rice was “angling” for the role, and his desire to be CEO of Disney was not a secret. Some feel that Chapek fired Rice as a way to get rid of someone he considered competition.
The strength of The Walt Disney Company’s businesses coming out of the pandemic is a testament to Bob’s leadership and vision for the company’s future. In this important time of business growth and transformation, we are committed to keeping Disney on the successful path it is on today, and Bob and his leadership team have the support and confidence of the Board.
After Rice’s firing, it was announced that Dana Walden — another former FOX executive — would be taking over the role of Chairperson of Disney Entertainment and Programming. Rice had a contract that was set to expire in 2024 and Disney said that they will continue to pay out that contract until it is up. Before being made Chairperson of Disney Entertainment and Programming, Walden had been the Chairperson of Walt Disney Television.
Since he became CEO in 2020, Bob Chapek has struggled to gain the favor of Disney fans. Tens of thousands of people have called for the CEO’s ouster for years and have even signed a Change.org petition, which has well over 100,000 signatures, to have him fired. Every time Disney fires a higher-up at the Company, many people comment that Chapek needs to be the one to go.
There were rumors that the Board was considering firing Chapek when his contract expires, but with the firing of Peter Rice, it is looking less likely that that will happen.
During The Walt Disney Company‘s fiscal second-quarter earnings call last week, the company revealed its success in streaming subscriptions to Disney+, but Mickey missed the mark in at least one area, thanks to a more than $1 billion loss related to an early termination of licensing agreements.
The earnings call, in which Disney CEO Bob Chapek and Disney CFO Christine McCarthy participated on Wednesday, was full of the usual for the quarterly call presented by Disney C-level execs against a backdrop of Wall Street‘s finest and listened to by shareholders and interested fans: Chapek referenced “stories” and “storytelling” perhaps more frequently than necessary as he gave an overview of the company’s quarter, and McCarthy followed with scores and scores of figures and numbers.
At least a handful of those figures and numbers stood out to interested parties, the first being the phenomenal growth in numbers of Disney+ subscribers: growth that beat even Wall Street‘s projections. The dynamic C-level Disney duo shared details during the call that painted a picture of Disney’s thriving business, including details about parks attendance on days inside the second quarter, some of which exceeded pre-pandemic demand in the parks.
McCarthy said that Disney continues to “control attendance” to allow for a “quality Guest experience” for everyone.
In Disney’s Parks division, sales more than doubled from $3.1 billion to $6.7 billion, and the division reported an operations profit of $1.8 billion, a welcome number, especially compared to a $400 million loss in the second quarter of Fiscal year 2021. The Parks division can thank Disney’s domestic parks for the uptick in operating profit; even CEO Bob Chapek referred to the U. S. parks—Walt Disney World and Disneyland Resort–as “standout” parks, saying that part of the good news for that division could be attributed to Disney’s new Lightning Lane and Disney Genie offerings for Guests.
Earnings per share of 26 cents saw a decline from 50 cents. EPS was $1.08, an increase from the previous quarter‘s 79 cents.
But Disney’s major loss during the second quarter was in its streaming service, but it wasn’t because of a drop in Disney+ subscriptions. Rather, the company amassed a more than $1.02 billion loss because of an early termination of “license agreements for film and television content delivered in previous years” that it has chosen to use on its direct-to-consumer services.
While Disney’s earnings report didn’t specify which content had been pulled back, Disney CFO Christine McCarthy said during the earnings call with Wall Street that those deals were books as revenue when the agreements were made, so they had to be pulled back from the numbers when Disney terminated the agreements.
Disney is one of several streamers making the decision to take back their own content. Six of Marvel’s original series for Netflix, Daredevil, Jessica Jones, Luke Cage, Iron Fist, The Punisher, and The Defenders limited series, as well as Marvel’s Agents of S.H.I.E.L.D., which had been streaming on Netflix only, are set to move to Disney+ beginning May 16.
For all the grumbling in the atmosphere from Disney Parks fans who have had their fill with The Walt Disney Company‘s affinity for price hikes at each theme park, Guests sure are spending more while on their Disney vacations.
During The Walt Disney Company‘s Fiscal Year 2022 Quarter 2 earnings call on Wednesday, Disney CEO Bob Chapek and Disney CFO Christine McCarthy had lots to share about the good things happening inside the House of Mouse, including an increase in theme park operating income, better-than-expected Disney+ subscriber growth, and perhaps not quite as earth-shattering losses due to Hong Kong Disneyland and Shanghai Disneyland being closed for part or all of the quarter.
“Our strong results in the second quarter, including fantastic performance at our domestic parks and continued growth of our streaming services, with 7.9 million Disney+ subscribers added in the quarter and total subscriptions across all our DTC offerings exceeding 205 million, once again proved that we are in a league of our own,” said CEO Bob Chapek during the call.
When it came to theme park operating income for The Walt Disney Company, Disney’s Parks, Product, and Experiences division reported impressive numbers–numbers that suggest that despite months of unrest over Disney’s newly-revamped (and newly re-priced) Annual Passholder programs at Disney World and Disneyland Resort, increases in food prices in the parks (and smaller portions reportedly being served), and in other prices, Disney Guests are still showing up and still spending cash.
A press release from The Walt Disney Company ahead of Wednesday’s earnings call said it all:
“Disney Parks, Experiences and Products Disney Parks, Experiences and Products revenues for the quarter increased to $6.7 billion compared to $3.2 billion in the prior-yearquarter. Segment operating results increased by $2.2 billion to an income of $1.8 billion compared to a loss of $0.4 billion in the prior-yearquarter. Higher operating results for the quarter reflected increases at our domestic parks and experiences businesses and, to a lesser extent, at our international parks and resorts and merchandise licensing businesses.”
And there was seemingly no attempt to cover the fact that Disney has indeed raised prices for many things across the board, leading to increased profits.
“Operating incomegrowth at our domestic parks and experiences was due to higher volumes and increased Guest spending, partially offset by higher costs. Higher volumes were due to increases in attendance, occupied room nights, and cruise ship sailings. Cruise ships operated at reduced capacities in the current quarter while sailings were suspended in the prior-yearquarter. Guest spending growth was due to an increase in average per capita ticket revenue, higher average daily hotel room rates, and an increase in food, beverage, and merchandise spending. The increase in average per capita ticket revenue was due to a favorable attendance mix and the introduction of Genie+ and Lightning Lane in the first quarter of the current fiscal year. Higher costs were primarily due to volume growth, cost inflation, and higher marketing spending.”
It may be the last time the Disney executives can be so chipper on an earnings call for a while, thanks to even more upset about CEO Bob Chapek‘s recent statement about Florida’s Parental Rights in Education bill, followed by the Company’s admitted determination to see the bill repealed. Many Disney Parks fans feel that Disney is attempting to “indoctrinate” children with some of its recent content, leading many to “boycott Disney,” even if only verbally.
However, the recent events involving Disney, DeSantis, and Reedy Creek didn’t transpire until the current quarter, meaning the bad news can be pushed aside for a little bit longer. The third-quarter earnings call might have a completely different tone to it.
It has been almost two weeks since Florida Governor Ron DeSantis signed a bill that will officially dissolve the Reedy Creek Improvement District in June 2023. The bill was the culmination of the weeks-long battle between DeSantis and the House of Mouse over Florida’s controversial Parental Rights in Education bill. The bill has been dubbed the “Don’t Say Gay” bill, and critics believe it unfairly targets the LGBTQ+ community. Disney CEO Bob Chapek has said that Disney will work to see the bill struck down in the courts.
While DeSantis has signed the Reedy Creek bill and said that it will go through, he faces an intense and steep, uphill legal battle to actually made that happen. There are a number of Florida laws standing in his way, and he knows that. Disney also knows that. Disney sent a note to shareholders not long after the bill was signed, saying that it plans to continue with current operations while exploring all the legal options it has available.
One of the biggest issues that DeSantis faces in dissolving Reedy Creek is the bonds that were issued by Reedy Creek just 4 years ago. Those bonds cannot be redeemed until at least 2029, so if Florida wants to dissolve Reedy Creek it would be responsible for paying out those bonds — which are more than $1 billion. Florida law dictates that the cost would be passed on to taxpayers, but DeSantis has said he will not do that and that Reedy Creek will pay.
In a new report from The Washington Post, insiders are saying that DeSantis knows that he cannot promise taxpayers that they won’t be stuck with the bond debt bill. They claim that DeSantis is working with Reedy Creek, so he can save face with his fellow Republicans and claim victory without that actually happening. Per The Washington Post:
That’s what worries local government officials, who fear that $1 billion in Disney bond debt will be dumped on them. Some analysts say the new law could mean a 20 to 25 percent property tax hike in nearby Orange and Osceola counties, which local government officials said would be “catastrophic.”
Disney has otherwise remained publicly silent about the feud and did not respond to requests for comment for this article. Sources familiar with the negotiations, who requested anonymity to discuss private negotiations, say the company’s lobbyists and lawyers have been working behind the scenes to find a solution that would allow DeSantis “to save face” and continue to claim a victory over “woke culture,” while in reality doing very little to impede the company’s massive operations in Florida…
DeSantis has brushed aside what local officials say could be calamitous consequences if Reedy Creek, which operates as its own county government, is eliminated. A statement from his office says “it is not the understanding or expectation” that the action will increase taxes. But DeSantis and his Republican allies in the legislature have not explained who will pay Reedy Creek’s $1 billion debt, or cover the $163 million in taxes it collects every year to pay for many of its theme park functions.
At this time, Governor DeSantis has not said how he plans to get around current Florida law when it comes to Reedy Creek’s debt and its bond obligations. However, his spokesperson has said that a plan will be released in the next few weeks. It has also been shared that DeSantis is considering creating a special district headed by his own appointees to oversee Walt Disney World.
Experts are also saying that, even if the taxpayers in Orange and Osceola Counties — where Walt Disney World is located — don’t have to pay the bond debt, their taxes will most likely go up because of the attorney’s fees incurred by the state while they fight Disney.
This is an opinion piece that was posted on DisDining.com recently and I would echo these sentiments.
Disney has lost its conglomerate, corporate mind lately, and public, “official” responses voiced by C-level Walt Disney Company executives rather than the voices behind those responses can be likened to preschool tantrums that ensue when playtime is over, the cookie jar is empty, and everybody is called on to help clean up so we can all go home.
Burbank, California-based Disney has about as much business sticking its head up over the fence around Florida’s backyard and telling Floridians what they should be doing as that neighbor three doors down has in ringing your doorbell to offer unsolicited parenting suggestions while her own children blaze down the street barefoot, half-dressed, yelling obscenities at the top of their lungs.
It’s just not her call. And it’s not Disney’s.
Disney’s brazenness in crossing the line into Florida politics is, in a word, obnoxious. A different scenario would manifest itself if the legislation in question had to do with business practices or taxation. After all, some of Disney’s most lucrative business ventures make their home in the Sunshine State.
At that point, Disney would be bound to take a stand and to take productive measures for or against such legislation, much like your neighbor has every right to show up on your front porch and see that you get your kids off her lawn, as they are spray-painting her rose bushes and mudding up her walkways.
But the fact that The Walt Disney Company has danced into Florida’s educational legislation waters makes Disney look even more like the fools in the whole culture war/cancel culture Disney-DeSantis Debacle.
Florida’s Parental Rights in Education law is (shocker) an education law, and Disney’s boldness in digging its heels in the ground on a law related to parents’ rights as they pertain to certain aspects of their children’s education and the curriculum upon which classroom instruction is based is nauseating, embarrassing, and irritating.
Disney very obviously has little to no experience in staying in its proverbial lane. No other out-of-state corporate conglomerate would even consider showing up at another state’s front door and handing down edicts about how things should be run and done–not when they have NOTHING to do with business practices or taxation that would clearly affect the aforementioned conglomerate.
And no other out-of-state corporate conglomerate would be permitted to do so. They’d never even be afforded the limelight with which Disney has been drenched since Disney CEO Bob Chapek made his SECOND “official” statement on behalf of The Walt Disney Company in response to Florida’s education curriculum legislation.
Yes, that was his second statement.
Consider that Chapek did make a response in the very beginning, though he was accused of remaining silent. The embattled Walt Disney Company CEO Bob Chapek made a statement when Florida’s House Bill 1557 wasn’t yet law, but mainstream media didn’t report on that fully.
In what may have been his most sound business decision since taking the helm at The Walt Disney Company from veteran Bob Iger in February 2020, as Florida’s bill began to gain traction in the Florida legislature, Bob Chapek told Walt Disney Company employees that Disney would not take a stance as a company one way or the other.
“As we have seen time and again, corporate statements do very little to change outcomes or minds,” Chapek wrote to employees. “Instead, they are often weaponized by one side or the other to further divide and inflame. Simply put, they can be counterproductive and undermine more effective ways to achieve change.”
Chapek knew that taking a public stance as a company would only create division, rather than creating positive change. Perhaps he also realized Disney had no business creating a campaign against legislation that affects parents of school-aged children and their school-aged children.
Again, it was perhaps the most sound decision Chapek has made during his entire tenure as the head of Walt’s company.
But what’s reported is that Chapek was silent on the bill. The truth is that the University of Michigan MBA grad made a statement to his employees about the frivolity of taking a stance against the bill, as he clearly felt there were better ways to pursue change. He wasn’t aloof, and he never asked his employees to be aloof. It is his job to make decisions that afford the company the best outcomes. (Don’t get us started on all the price increases in the parks.)
But his decision wasn’t met with approval from some who then proceeded to put the pressure on Chapek to not only make a statement but to make the statement they wanted to be made. According to a Cast Member with Disney who is currently running for office, the majority of Disney employees weren’t inflamed by the Parental Rights in Education law, but the company caved to the demands of some while ignoring the majority completely.
Days later, the same Disney CEO who said it was unwise for the company to take a stance, as it would prove divisive and hinder positive change, took a stance against the bill, suddenly calling Florida’s Parental Rights in Education law “a challenge to basic human rights.”
And sadly, that’s just the tip of the iceberg.
The embarrassment only grows in those rare moments when the dust settles briefly, the monotonous sounds of the hum-drum and the riff-raff fade intermittently, and the truth about Florida’s new law becomes glaringly real: the “Don’t Say Gay” bill doesn’t mention the word “gay” in its language even once, nor does the bill have anything under the sun to do with “not saying the word ‘gay’”.
But because corporate America, big business, and the federal government are awarded the role of content manager for almost every single news outlet in the country, many would never know that. Some have even taken things so far as to that the “Don’t Say Gay” bill is a legislative measure aimed at making the use of LGBTQ terminology a punishable offense.
The very idea of such a measure is preposterous. It’s idiotic.
And it’s irritating to the point of inflammation: an inflammation that only grows and spreads as the realization takes hold that the majority of those preaching opposition to Florida’s law to protect the rights of parents of school-aged children have never read a single line of the seven-page bill.
According to Poynter.org, claims about Florida’s Parental Rights in Education law that falsify points about the law can be attributed to its nickname, the “Don’t Say Gay” law, which was coined by a group called Equality Florida, a group that calls itself “the largest civil rights organization dedicated to securing full equality for Florida’s lesbian, gay, bisexual, transgender, and queer (LGBTQ) community” on its Facebook page.
But the moniker is a misnomer.
Florida’s new legislation does not prohibit the use of the word “gay” in any way. It prohibits classroom instruction about sexual orientation and gender identity which, by the way, also encompasses classroom instruction about heterosexuality. And it applies to Kindergartners, first graders, second graders, and third graders. (That means we’re talking about children between the ages of 5 and 9 years old.)
I would be infuriated if my 6-year-old were being taught ANYTHING related to sex. First, that’s far too young. And second, that’s my role as a parent. Period.
But there’s another piece to the whole Disney-DeSantis debacle that’s equally as ridiculous as Disney’s sense of entitlement, and that is Governor DeSantis‘s attempts to retaliate against Disney for its stance. While it’s true that Disney has no place in Florida’s education legislation, it’s also true that the company is entitled to its opinions and its statements.
But the moment DeSantis met with Disney’s disapproval, plans for retaliation began. The proposal to dissolve the Reedy Creek Improvement District magically manifested almost instantly, and from that moment on, it was full steam ahead.
Governor DeSantis is right. Corporations and companies do not run the state of Florida. But neither should government officials who have the thought of using their positions to impose retaliatory measures against those who oppose their decisions, let alone those who push forward (and with great haste) in bringing about those measures.
Then again, some now believe that DeSantis’s decision to retaliate against Disney had little to do with his stance against corporations trying to dictate to states how they should conduct business and more to do with a 2024 Presidential bid for DeSantis. Taking on Disney, some ascertain, allegedly allows Governor DeSantis to prove his prowess, his abilities, and his willingness in taking on big business.
If so, it only adds to the despicable nature of the entire Disney-DeSantis debacle dumpster fire, the flames from which can only be put out by true leaders on both sides who are unafraid to stand up and work together to find a commonality that will make their partnerships much stronger and much more effective than their differences.
