Disney Is Planning To Invest $17 Billion Into Resort And New Theme Park

Forbes

Two months after Disney and Florida’s governor settled their legal beef, the company is now authorized to expand with a potential fifth park sometime over the next decade.  Read the full story on Forbes:  https://www.forbes.com/sites/suzannerowankelleher/2024/06/06/disney-fifth-orlando-theme-park/?sh=894ec8869661  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Today on Forbes, Disney is greenlit for a fifth Orlando theme park.

00:05 A little more than two months ago, Disney and Florida Governor Ron DeSantis

00:11 appeared to bury a very big hatchet with the nullification of a lawsuit over how the company

00:16 can grow its theme park empire in the Sunshine State. The two-year feud had escalated with

00:22 DeSantis' hostile takeover of the former Reedy Creek Economic Development District

00:27 from Disney's control following the company's opposition to DeSantis'

00:31 controversial so-called "Don't Say Gay" law, which has been recently watered down.

00:36 On Wednesday, the DeSantis-appointed board overseeing the rebranded

00:41 Central Florida Tourism Oversight District agreed to allow Disney to move forward with

00:46 its long-held plans to invest up to $17 billion in its sprawling Orlando resort.

00:53 The plans include potentially expanding Disney's footprint with a fifth major theme park,

00:58 as well as adding two smaller parks, such as water parks, and hotels.

01:02 Robert Niles, creator of the publication Theme Park Insider, says,

01:08 "It's business as usual again for Disney and Florida. With DeSantis abandoning his

01:13 presidential campaign-driven feud with Disney, the company can go ahead with its post-lockdown

01:18 expansion plans." Disney's Parks and Experiences division generated $32.5 billion in revenue for

01:25 fiscal year 2023. That figure accounted for more than a third of the company's total annual revenue.

01:31 This was a 16 percent increase from the previous year, and a record high for the segment.

01:36 On the company's latest earnings call in May, Disney executives exuded bullish optimism

01:42 while discussing the planned capital investment alongside the rosy financials.

01:48 Disney's CFO Hugh Johnston told investors,

01:51 "Disney's theme parks division is a 25-plus margin business and has been for an extended

01:57 period of time, has terrifically high guest satisfaction scores, which create layers of

02:02 advantage, which suggest we should be able to sustain high margins and high returns on investment.

02:07 With a business with that profile, you invest in it."

02:10 Niles of Theme Park Insider says,

02:15 "Disney has committed to spend $60 billion on its parks worldwide over the next decade.

02:20 We now know how much of that is coming to Florida."

02:22 Niles notes that the $17 billion earmarked for Orlando includes new attractions on expanded

02:29 sites at Magic Kingdom and Disney's Animal Kingdom, as well as a new hotel. Yet he adds,

02:35 "Beyond that, Disney has not revealed any plans. Just because Disney has the authority to build

02:40 a fifth park doesn't guarantee that it will." The last time Disney added a major theme park

02:47 to its Orlando resort was in 1998, when the 580-acre Animal Kingdom park opened at a reported

02:53 cost of nearly a billion dollars. Wednesday's agreement allows Disney to get on with its

02:59 expansion plans while also letting DeSantis normalize relations with the state's biggest

03:03 employer. During their heated back-and-forths, Disney CEO Bob Iger had called DeSantis,

03:09 "anti-business" and "anti-Florida," and the company pulled the plug on a $1 billion company

03:15 campus that would have brought 2,000 jobs to Lake Nona, Florida.

03:19 Not everyone is happy with Disney's foray into hardball politics. At the company's most recent

03:25 shareholder meeting in April, some chafed at the company's political donations toward appeasing

03:30 DeSantis. Laura Nixon, a representative from the Educational Foundation of America, a longtime

03:36 holder of Disney stock, said, "In recent years, Disney contributed over $100,000 to an administration

03:43 that took aim at Disney's employees, mocked the company's values at a national level,

03:47 and then punished Disney by diminishing its tax breaks and degree of self-governance."

03:52 Taking the opposite stance, Scott Shepard, general counsel at the conservative think-tank

03:58 National Center for Public Policy Research, decried, "Making Disney synonymous with

04:03 force-feeding radical gender ideology to small school children and then hiding it from the

04:08 parents would send Disney's core audience flooding away." The company's financial reports

04:14 suggest Disney's core fan base has not gone anywhere. With DeSantis no longer a presidential

04:20 hopeful, experts say Disney is right to just move on. Niles says, "Theme parks are a capital-driven

04:27 business. Tech is always advancing. If you want to be the market leader and charge market-leading

04:32 prices, you have to be expanding and advancing at all times. That costs money."

04:38 For full coverage, check out Suzanne Rowan Kelleher's piece on Forbes.com.

04:44 This is Kieran Meadows from Forbes. Thanks for tuning in.

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