If DeSantis drags down Disney, he could bring central Florida with it

Ron DeSantis standing at a podium and speaking into a microphone next to a picture of the Cinderella castle in Walt Disney World.
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  • Disney announced Monday that it had scrapped plans for a $1 billion corporate campus in Florida.

  • A leading expert on Disney's history in Florida said the move showed the state had a lot to lose.

  • Central Florida's economy relies on the tourists drawn in by Disney and its theme parks.

Conventional wisdom says you should never pick a fight you can't afford to lose — but looking at the ongoing feud between Disney and Gov. Ron DeSantis of Florida, the state looks like it's on shaky ground.

After more than a year of escalation, Disney's latest move was to scrap a $1 billion development in Florida. The corporate campus could have brought more than 2,000 jobs to the Sunshine State, but reports said Disney's current relationship with Florida was one of several reasons the project was abandoned.

The announcement renewed questions about DeSantis' decision to pick a fight with one of the state's largest employers — and who had the most to lose: Florida, the governor, or the company.

"I think DeSantis has more to lose, as this incident made apparent, depending on whether, as a fairly skilled politician, he can somehow put a good face on this," Richard Foglesong, a leading expert on Walt Disney World's history and politics, told Insider last week. Foglesong authored the 2003 book "Married to the Mouse: Walt Disney World and Orlando."

DeSantis has faced political blowback for the Disney spat, including accusations from fellow Republicans that the 2024 hopeful wasn't friendly to business and has lost his state jobs. Pending how the ongoing fight plays out, Florida could stand to lose a lot more from Disney.

Disney is an economic powerhouse in Florida

A study by Oxford Economics said that Orlando tourism generated $75.2 billion for central Florida in 2018. While that includes other attractions, Disney dominates the area's tourism with four theme parks and two water parks.

The study also said Orlando tourism accounted for nearly half a million jobs, bringing in $5.8 billion in state and local tax revenue for public safety, infrastructure, schools, and more.

Disney said it employed 75,000 people in Florida — which made it the state's second-largest private employer behind the Publix grocery-store chain, according to the Florida Department of Economic Opportunity.

And Disney Cruise Line ships leave from three ports in Florida.

Theme parks are just part of Disney's business

Disney pulls in more revenue from its media and entertainment division, which made $55 billion in revenue in the 2022 fiscal year. In comparison, Disney parks, experiences, and products pulled in $28.7 billion, or around 33% of the company's total revenue.

And although Disney's Florida resort is its most popular location and brings in 58 million people annually across four parks, the company has many other locations around the world that draw tens of millions of people each year.

Disneyland in Anaheim, California, drew around 28.5 million visitors across its two parks in 2019. Disneyland Paris attracted about 9.7 million people in the same year, while Shanghai Disneyland, of which Disney owns 43%, brought in 11.2 million. Tokyo Disneyland and Tokyo DisneySea — which are owned by the Oriental Land Company with intellectual property licensed from Disney — had nearly 32.7 million visitors in 2019. Hong Kong Disneyland, of which Disney owns 48%, brought in 6.5 million visitors in the 2019 fiscal year.

Disney also has the Disney Cruise Line, which is set to expand to Southeast Asia in 2025.

All to say, Disney has options on where to invest or expand, which could have major consequences for Florida.

If Disney focuses its investment elsewhere, other tourist attractions in Florida could suffer

Foglesong previously told Insider that Disney was stuck in central Florida because the company had made too much brick-and-mortar investment for the theme park and resort to be moved elsewhere.

Although Disney couldn't leave the state, Foglesong said they could "lower their replenishment investment in the Disney World theme park."

He noted that an overwhelming number — about 70% — of Disney World guests were repeat visitors. That's a credit to Disney but also provides added pressure to keep investing in the Florida resort or risk losing customers, which could hurt Orlando's economy and cause a lose-lose situation for the state and the company — unless Disney can make up the money elsewhere.

"The challenging question is how many times will guests come back to see the same rides and attractions?" Foglesong said, adding that Disney drew repeat visitors because it was constantly expanding. "One could credibly argue that the buoyancy of the Orlando economy depends upon Disney's investment, or reinvestment, in new rides and attractions because absent that, people won't come back."

As the state's largest tourist attraction, Disney provides a major boon to other tourism and tourism-adjacent businesses, as well as the entire economy of central Florida. Choosing not to reinvest in its Florida resort could hurt Disney's annual visitation numbers as well as those of neighboring theme parks and businesses.

"The people who come may be attracted by Disney, but they don't spend seven days there," Foglesong said, adding the average Disney visitor might spend four days at Disney parks — and then two at Universal Studios, and one at SeaWorld Orlando, for example.

Apart from the $1 billion corporate campus, it seems that Disney will continue to invest in Florida.

Josh D'Amaro, Disney's chief of parks, said Monday that the company still planned to spend $17 billion in Florida in the next decade and that the fight with DeSantis had not hurt Disney's business, Deadline reported.

However, if DeSantis's campaign against Disney ultimately results in less investment in Florida, it won't just be the House of the Mouse that loses visitors.

"They won't just not come back to Disney World," Foglesong said. "They won't come back to SeaWorld, they won't come back to Universal Studios, they won't come back to the mom-and-pop roadside tourists attractions."

Read the original article on Business Insider