The year-over-year financial comparisons for Walt Disney's (DIS -0.01%) Florida theme park business have been looking a bit meager lately, but the entertainment giant knows how to paint a rosy picture of its position in the Sunshine State when it matters most. On Tuesday, Disney rolled out an economic impact study showing just how significant Disney World is to the Florida economy.
Gloating about the value of its massive resort when that was the one weak spot among its gated attractions in last week's blowout fiscal fourth-quarter report may seem like an odd choice. It's not. There's always a method to the Mouse-ness. Here's why Disney is likely talking up its game in Florida now.
Wallet Disney World
The new study from Oxford Economics takes a look at Disney's total statewide impact for its fiscal 2022, which ended in September of that year, and concludes that the company had a $40.3 billion impact on the state's economy. The role of the travel and tourism industry bellwether as a major private employer in Florida has never been questioned, but quantifying its enormousness has some tactical advantages.
Disney's workforce of 82,000 across the state includes not just employees of its Central Florida theme parks, but also its Disney Vacation Club business and those who support its growing fleet of cruise ships. The study also zooms out to show that the livelihoods of 263,000 Floridians -- or just over 3% of the state's workers -- are tied directly or indirectly to the success of the world's leading theme park operator.
After all, how many of Central Florida's third-party hotels, souvenir shops, and other touristy beacons would survive in the heart of the state -- and away from Florida's signature beaches -- without the lure of Disney's pixie dust to attract visitors? And thousands of small businesses rely directly on Disney as a buyer of their products and services.
Image source: Disney.
The impact study concludes that Florida's unemployment rate would jump from 3% to 5.4% if Disney closed up shop in the state, leaving it with the second-highest unemployment rate in the country. Disney's revenue and off-site visitor spending contributed $12.1 billion in total labor income in fiscal 2022, generating $6.6 billion in tax revenue.
Why is this important now? Well, since early last year, Florida Gov. Ron DeSantis has been at war with the House of Mouse. The conflict began when former CEO Bob Chapek became vocal against the controversial Parental Rights in Education bill, widely described by its opponents as the "Don't Say Gay" bill -- now law -- and promised that Disney would have more inclusion and representation in its content. After Bob Iger returned to the company's helm late last year, he took a more strategic approach to dealing with DeSantis, but Disney wasn't going to back down from its stance.
Times have changed a bit since then. DeSantis may have been riding high last year as a potential Republican candidate for the 2024 presidential election, but enthusiasm among the electorate for him has softened. According to the poll trackers at political news site FiveThirtyEight, support for DeSantis in the Republican primary has softened from 34% in January to just 14% now. Taking jabs at his state's largest private employer didn't weaken his approval score in Florida, but it understandably did not play well nationally with the pro-business wing of his political party.
Both DeSantis and Iger have softened their rhetoric and attacks on each other, but that only makes Tuesday's economic impact study all the more timely. A statistics-packed punch could easily get lost in a flurry of political fisticuffs, but now -- when things are calmer -- the facts being presented may be accepted more readily. And perhaps the prospect of that data floating around in the public consciousness will provide a bit more of a deterrent the next time that a politician thinks about taking a swing at Disney in Florida.
Disney announced in September that it would double its capital expenditures for its theme parks-helmed experiences segment to $60 billion over the next 10 years. That's a major financial commitment at a time when Disney is cutting back elsewhere with the goal of shaving $7.5 billion off of its annual operating expenses. If the company is going to spend that kind of money -- much of it in Florida -- it no doubt wants to be sure that it's competing in front of a friendly home team crowd, not playing in a hostile environment. Making the dollars-and-cents case for itself when it can be heard nice and loud is a smart choice. And those numbers should be remembered the next time someone with political aspirations is thinking about taking a swing at Disney.
