As far as theme park destinations go, Walt Disney World is unique in a number of ways.
One of those ways, which understandably goes unnoticed by most guests is how the land the
resort sits on is governed.
You see, Disney World is within the Reedy Creek Improvement District, a governing jurisdiction
that was created for Disney and one that is effectively controlled by Disney.
I have other videos that go in-depth into how and why it was created and what kind of
power it grants Disney, but the short version is that it allows them to essentially govern
themselves on a municipal level.
It was passed back in the day where the primary goal of Walt Disney World was Walt’s dream
of EPCOT, a real functional city.
Today I want to talk about the two times Disney came closest to losing those powers.
So buckle up and get ready, because we’re about to dive into the most thrilling and
exciting form of history: government bureaucracy.
To say that 1984 was a struggle for Walt Disney Productions would be an understatement.
Disney was the target of a hostile takeover attempt by Wall Street raiders that year.
They made for the perfect target.
They were Disney after all.
Mickey Mouse.
Snow White.
Disneyland and Disney World.
It was this American cornerstone that most companies wished they could achieve.
Yet as a business, the company wasn’t evolving or growing enough to keep up with the times.
That sentiment of trying to hold on to the good old days of Walt was a nice one, but
for a public company in a world that was quickly changing with or without them, it was a weakness.
The result of that weakness was that the company that had a lot of potential value but was
at the same time undervalued on the stock market.
That’s what made them a prime target for a takeover.
This worried a lot of people for a lot of reasons.
Disney was a massive part of American culture for the past half century.
What would happen if raiders bought it up, broke it up, and sold off the pieces?
It was bad enough that at one point Roy Disney, Walt’s nephew, entertained the idea of borrowing
money to buy the company himself, and then selling off the theme parks to pay back the
loan and save the film studios.
But while the public was worried about the fate of the overall company, politicians in
Florida were worried about the Reedy Creek Improvement District.
The general sentiment was that Disney was pretty responsible with the powers they had
been granted through the jurisdiction.
They paid their taxes.
They built their own infrastructure.
They even set aside a third of their land for conservation.
All the while, they basically put central Florida on the map when it came to tourism.
County officials had to wonder: Would they be as lucky if suddenly the next day Disney,
and by extension the Reedy Creek Improvement District, was owned by a bunch of Wall Street raiders?
One of the reasons for Disney’s undervalued stock was that they owned so much valuable
land in Florida that they weren’t putting to use.
So it wasn’t a stretch to think that new corporate owners would focus on developing
all that land and getting their money’s worth out of it.
That kind of rapid short-term development without looking at the long-term plan could
have a real negative impact on a region.
So the Orange County commissioners began to speak up and speak out about the possibility
of revisiting the legislation that created the district in order to do anything from
limiting the powers granted to Disney to as far as abolishing the district altogether.
Four of the five commissioners expressed their desire to roll back the district’s powers.
However commission Chairman, Lou Treadway, wasn’t prepared to act just yet.
And it was a good thing that he wasn't, because luckily Disney would be able to ward off the
takeover attempt.
They pulled it off with a combination of tactics, including paying greenmail, which is when
you buy back some of your own stock at a premium from the party trying to take you over, as
well as making an acquisition themselves.
Most importantly though, they were shocked into the realization that the era of Walt
was long over and that the company needed to move swiftly into the future.
To do that, they needed new leadership from the outside and that’s when Disney CEO Michael
Eisner, entered the picture.
Even with all the measures to ward off the takeover, some of the Orange County commissioners
wanted to continue with limiting the Reedy Creek powers anyway, because they felt more
takeover attempts were bound to happen and it would only be a matter of time before one stuck.
Still though, the discussions ultimately faded away.
As Disney faced a decade of immense success, the threat of new owners taking over Reedy
Creek just fell to the side.
Two decades passed and while Disney would face up and downs, they continued to do well
enough that nobody worried about the fate of the Reedy Creek Improvement District.
That is, until 2004 rolled around.
This time it wasn’t about Disney not keeping up or clinging onto the era of Walt.
They definitely weren’t in Disney decade anymore, but they were nowhere near the position
they were in back in ‘84.
They simply weren’t the biggest fish in a sea filled with fish that were getting larger
and larger every year.
So in 2004 the telecommunications conglomerate Comcast set their sights on Disney, and suddenly
another takeover attempt was looming.
Once more those same questions from the 80’s returned.
Would Comcast be as responsible with Reedy Creek as Disney was?
So once again local politicians raised the question of whether they should act against
the powers of Reedy Creek before it was too late.
Similar to the last time, there were plenty who felt that Disney was responsible with
their use of the powers and that, considering their contributions to the local economy,
it would be a bad idea to punish them just because they might be bought in the future.
However where 1984 started and stopped with just talk, 2004 brought upon action, albeit
minor action.
In April of 2004 representative Andy Gardiner requested that the Florida Legislature’s
Office of Program Policy Analysis and Government Accountability, and apparently long names,
conduct a state level review of the Reedy Creek Improvement District legislation.
The review was ordered by a joint House and Senate auditing committee, and over the following
eight months, for the first time in nearly 40 years, the state took a close look at the
powers they had granted Disney back when Disney World was still just a dream.
This is where an actual takeover might have lead to some sweeping legislation.
However there was no takeover.
Disney lucked out again and Comcast lost their bid for the Walt Disney Company.
While less direct, it was an event that once more lead to a change in leadership at the company.
Michael Eisner would be replaced by Bob Iger, and Disney would move into the era we’re
currently in.
The state report was still conducted though, and it was concluded that December that the
current laws in place for the district were sufficient enough to prevent a new owner from
making sudden and drastic changes.
It also highlighted that there were a number of measures the state could add onto the legislation
to further prevent it if they needed to.
But because the report took so long to put together, they no longer needed to.
So once more the discussions of altering the district’s powers fell to the side.
Today, with each new acquisition, it becomes harder and harder to imagine a world in which
someone might buy Disney.
But if 1984 and 2004 teaches us anything, it’s to never say never.
With a company so large and so broad in its cultural reach, any kind of future takeover
of Disney would carry with it endless questions and implications.
And among those endless questions would be: What would happen if suddenly someone else
was handed the keys to that Magic Kingdom?
Whether it’s the good favor they’ve gained with Florida over the decades, the benefit
of how slow the government moves on the issue, or a combination of both, they’ve dodged
having to answer that question.
Still, those two years act as reminders that the powers Disney was granted 52 years ago
might not last forever.