Disney’s empire in Florida will expand over the subsequent decade. (Photo by Matt Stroshane)
Walt Disney World Resort via Getty Images
A Just over two months ago, Disney and Florida Gov. Ron DeSantis appeared to bury a significant hatchet once they settled a lawsuit over how the corporate could expand its theme park empire within the Sunshine State. The two-year-old dispute escalated when DeSantis took control of the previous Reedy Creek economic development district from Disney after the corporate protested DeSantis’ controversial “Don’t Say Gay” law, which recently watered down.
On Wednesday, the DeSantis-appointed board of the renamed Central Florida Tourism Oversight District agreed to permit Disney to maneuver forward with its long-held plans to take a position as much as $17 billion in its sprawling Orlando resort. The plans include potentially expanding Disney’s footprint to incorporate a fifth major theme park, in addition to adding two smaller parks (like water parks) and hotels.
“It’s business as usual for Disney in Florida,” says Robert Niles, creator of Theme Park Insider“With DeSantis abandoning his presidential campaign-fueled feud with Disney, the company can move forward with its post-lockdown expansion plans.”
Disney’s Parks and Experiences division generated revenue of $32.5 billion in fiscal 2023, representing greater than a 3rd of the corporate’s total annual revenue, a rise of 16% over the previous 12 months and a record for the segment.
At the corporate’s last earnings call in May, Disney executives exuded optimism as they discussed planned investments alongside rosy financial figures.
“[Disney’s theme parks division] is a 25%+ margin company and has been for a long time. It has incredibly high guest satisfaction scores, which gives us other advantages that suggest we should be able to sustain high margins and high returns on capital,” Disney CFO Hugh Johnston told investors. “A company with that profile is one you invest in.”
“Disney has committed to spending $60 billion on its parks worldwide over the next decade,” Niles says. “We now know how much of that is going to Florida.” The $17 billion earmarked for Orlando includes latest attractions on expanded lands at Magic Kingdom and Disney’s Animal Kingdom, in addition to a brand new hotel, he notes. “Beyond that, Disney has not announced any plans. Just because Disney has the authority to build a fifth park doesn’t mean it will.”
The last time Disney added a significant theme park to its Orlando resort was in 1998, when the 580-acre Animal Kingdom park opened, at a reported cost of nearly $1 billion.
Wednesday’s agreement allows Disney to maneuver forward with its expansion plans while allowing DeSantis to normalize relations with the state’s largest employer. During the heated back-and-forth, Disney CEO Bob Iger had called DeSantis “anti-business” and “anti-Florida,” and the corporate pulled the plug on a $1 billion corporate campus that may have brought 2,000 jobs to Lake Nona, Florida.
Not everyone seems to be pleased about Disney’s foray into hard-line politics. At the corporate’s last shareholder meeting in April, some were offended in regards to the company’s political donations to appease DeSantis. “Over the last few years, Disney has donated over $100,000 to an administration that has targeted Disney employees, mocked the company’s values on a national level and then punished Disney by reducing its tax breaks and level of self-governance,” said Laura Nixon, a representative of the Educational Foundation of America, a long-time Disney stockholder.
Scott Shepard, general counsel on the conservative think tank National Center for Public Policy Research, takes an opposite view, condemning: “Making Disney synonymous with force-feeding radical gender ideology to young schoolchildren and then hiding it from parents would drive away Disney’s core audience.” The company’s financial reports suggest that Disney’s core fan base has not disappeared.
With DeSantis not a presidential candidate, experts say Disney is correct to simply keep going. “Theme parks are a capital-driven business,” Niles says. “Technology is constantly evolving. If you want to be a market leader and charge market-leading prices, you have to constantly expand and evolve. That costs money.”
