Disney takes a knee to the altar of wokeism and may face an investor backlash
The company cannot afford to discriminate against the owners of the company—its shareholders—in its pursuit to overrepresent the LGBTQIA+ community.
The path of least resistance for corporate America is to support a loud and woke minority—the LGBTQIA+ community. Why? Because the Democratic party labels those who don’t agree with their policies as homophobic, chauvinists, bigots, racists, or even neo-Nazis. For the Democrats, it’s just another wedge issue, aimed at those who oppose their economically destructive policies.
And now Disney, the company most synonymous with childhood narratives, has weighed in on one particular issue. “Disney Advertising supports and celebrates our LGBTQIA+ employees, colleagues, partners, families, and allies and recognizes them today and every day. We oppose any type of legislation that infringes on the basic human rights of people in the LGBTQIA+ community. We are committed to inclusion and equality for all” — Rita Ferro, President, Disney Advertising Sales, and Partnerships.
Fine words. But perhaps Disney should take a leaf out of its most famous nanny’s rulebook. “That’s a pie-crust promise. Easily made, easily broken”— Mary Poppins.
Indeed, the word on the street is that the traditional Disney [young girl] princess has died. Even worse, she was killed—by her mother.
Disney’s corporate president, Karey Burke says, “as a mother of one transgender child and one pansexual child,” she supports having “many, many, many LGBTQIA characters in our stories” and wants “a minimum of 50 percent of Disney’s characters to be LGBTQIA and racial minorities”— a percentage that is hardly representative of the United States. Just because you’re in charge of Mickey Mouse doesn’t mean that halving him is the answer.
The target of Disney’s new ad is a GOP-led Florida bill that restricts teaching about sexual orientation. Gov. Ron DeSantis has signaled his support for the measure opponents call the ‘Don’t Say Gay’ bill. Supporters say the bill is aimed at asserting more parental control over their children’s education and barring inappropriate content from the classroom. Democrats, civil-rights groups, and other opponents say the measure would censor discussion about lesbian, gay, bisexual, and transgender people and isolate LGBT children who are vulnerable to bullying.
Following the signing of the bill, a Disney spokesperson issued this statement:
“Florida’s HB 1557, also known as the ‘Don’t Say Gay’ bill, should never have passed and should never have been signed into law. Our goal as a company is for this law to be repealed by the legislature or struck down in the courts, and we remain committed to supporting the national and state organizations working to achieve that. We are dedicated to standing up for the rights and safety of LGBTQ+ members of the Disney family, as well as the LGBTQ+ community in Florida and across the country.”
It sounds like Disney has taken to heart one of its own narratives, casting itself as Robin Hood and Florida’s GOP as the Sheriff of Nottingham.
“For Disney to come out and put a statement and say that the bill should have never passed and that they are going to actively work to repeal it, I think one was fundamentally dishonest, but two, I think that crossed the line”— Gov. Ron DeSantis.
The bill prohibits instruction on sexual orientation or gender identity from kindergarten to third grade and bans it in later grades if not “age-appropriate or developmentally appropriate for students.” It prevents school districts from withholding information about a student’s mental, emotional or physical health, including potential matters of gender identity, from parents. And it allows parents to sue school districts over alleged violations of the bill. U.S. Secretary of Education Miguel Cardona said after the bill’s passage, “Leaders in Florida are prioritizing hateful bills that hurt some of the students most in need.”
“We see a lot of focus on transgenderism, telling kids that they may be able to pick genders. I don’t think parents want that for these young kids … I think it’s inappropriate to be injecting those matters, like transgenderism, into a kindergarten classroom”— Gov. Ron DeSantis.
The legislation is one of several similar measures introduced in states, including Iowa, South Carolina, and Tennessee in the past year.
Florida's new bill has nothing to do with what Disney suggests—legislation that infringes on the basic human rights of the LGBTQIA+ community. Disney, which employs 70,000 people in Florida at the company’s popular resort and theme parks, is an active political donor. It donated $4.8 million to Florida candidates in the 2020 elections, according to campaign records analyzed by Politico.
Disney CEO Bob Chapek said in a statement that the company will soon be “reassessing our advocacy strategies around the world—including political giving.” Disney is rethinking plans for an all-hands company diversity forum known as “Reimagine Tomorrow Global Summit” that had been scheduled for April 13, instead of considering reframing it as an event focused on LGBTQ1A+ issues, according to people familiar with the matter.
Disney's former CEO Bob Iger delivered a rebuke to his successor for his handling of the 'Don't Say Gay' controversy. “I used to determine whether we should or should not weigh in, considered a few factors: What would its impact have on our employees, on our shareholders, and our customers. And if any one of those three constituencies had a deep interest in, or would be affected by, whatever the matter was at hand then it was something that I thought we should consider weighing in on.”
Iger's remarks threaten to drive an even greater wedge between him and his successor, whose contract only runs until February 2023. Disney employees staged a series of walkouts earlier in the month in protest of Chapek's failure to be more vocal on the issue.
Bob Iger, 71, handed over the reins of the company after 15 years at the helm in February 2021, with Bob Chapek, 61, his successor. The bill, which Joe Biden called 'hateful' but which supporters say protects children, was signed into law on Monday.
Chapek has been criticized by Disney employees for his failure to publicly condemn a Florida education bill dubbed 'Don't Say Gay', which prevents teachers from discussing sexual orientation and gender identity from kindergarten through third grade.
Regrettably, Disney’s parent company is now compromised between two tradeoffs—promoting LGBTQIA+ Disney characters or remaining non-political—that appear to be poorly thought out by the Board of Directors. It’s also likely that they have not considered the unintended consequences of a customer and investor backlash that will surely follow. As a shareholder, I’ll signal my displeasure by selling the shares and avoiding any movies or musicals that focus on the sexual orientation of the Disney characters. I suspect a lot of people will do the same.
The real problem for Corporate America and our country is that wokesim harms our children and drives down sales and profits for businesses. This is a risk all companies face when pandering (virtue-signaling) to woke minorities even though their intentions are well-meaning. For Disney, they may pay a price literally in lost sales and earnings.
As an example, a 1% drop in Disney’s revenue would reduce its market value by 4.7%, based on its current 4.7x price to sales ratio. In other words, every 1% hit in revenue would reduce the value of Disney’s market value of $248.7 billion by $11.75 billion (4.7%). A 3% drop in revenue would be $35 billion, a 14% reduction in the value of the company. The company cannot afford to discriminate against the owners of the company—its shareholders—in its pursuit to overrepresent the LGBTQIA+ community. While the company’s fortunes have improved after the government-mandated lockdowns in 2020 and a pandemic that has lasted two years, any backlash hit to earnings will be offset by higher sales this year and next as the economy recovers.
It is the silent majority that purchases the highest percent of goods and services. Everyone should have a voice but not at the expense of silencing those who disagree. I suspect that this will be a painful lesson for the many companies that pander to the loudest woke minority. It’s a social and equality agenda that in effect discriminates against the traditional definition of men and women by slicing our population by race and gender for political purposes. Disney’s apparent goal is to overrepresent a minority with the loudest voices and outsized political power. This is a bad corporate decision because Disney takes a knee to the altar of political correctness and identity politics—wokeism—while disregarding the values and best interests of the majority of Americans.
We mustn’t conflate respecting and protecting individual rights with teaching them in elementary school. Many of us have gay friends, associates, and family members. We do not discriminate against transgendered women but we believe that allowing them to compete against other women in sports is unfair. For generations of girls, the Disney princess has been part of their passage to adulthood—and she has changed as our expectations for girls have. While we believe that the LGBTQIA+ community should be respected and protected, mispresenting their numbers is statistically and ethically unsound. Good intentions alone seldom make good laws.
Disney has come a long way since Snow White in diversity, audience reach, and animating skills for which we are all the beneficiaries. Released eighty-five years ago to universal delight and acclamation, she now rests in peace, poisoned not by an apple but by an ideology, the twenty-first century’s Evil Queen.