Hiding Behind the Feud With DeSantis Are Disney’s Business Struggles

If you paid attention to any news about the Walt Disney Company last week, you indeed heard that Disney canceled its Lake Nona project. This cancellation cost the state of Florida more than $1 billion in investment and 2,000 high-paying jobs. The headlines, of course, all said the same thing; Disney’s feud with Florida Governor Ron DeSantis cost the state jobs and billions in investment. The truth, as always, is more complicated than that.

The reality was that Disney made this decision a while ago and only made it public now to garner public opinion against Governor DeSantis, as the two have lawsuits against each other. Lake Nona was an idea of former Disney CEO Bob Chapek, and like everything else Chapek touched, Disney decided to ditch the idea.

But this narrative, expertly crafted by the Walt Disney Company, hides some harsh realities: Disney is struggling right now. On the same day that Disney announced the cancelation of Lake Nona, it also announced that it would be closing its expensive Star Wars-themed hotel. The announcement that this interactive experience was closing garnered fewer headlines but was no less embarrassing for the Disney Company.

This sleight of hand by Disney is also distracting from CEO Bob Iger’s earnings call, where he delivered some bad news to investors. In the call, Iger announced that Disney Parks, Experiences, and Products Division is still doing fantastic. Disney Parks still see large attendance figures, and Guest spending has increased.

But that masked some of the issues in other Disney divisions. Disney+ lost more than four million subscribers in the first quarter of this year, primarily due to Disney+ losing cricket rights in India. Disney’s broadcast division, which consists of ABC and ESPN, among other networks, saw a 35 percent decline in ad revenues as consumers continued to cut the cord from traditional cable.

As the feud with Governor Ron DeSantis continues over Walt Disney World and its special district, Disney can at least count on that to distract people from its issues outside Central Florida. But there’s no telling how long before investors start highlighting some of these more significant issues within the Walt Disney Company.

An essential business fundamental is changing the conversation if you don’t like what they’re saying. The Walt Disney Company has become an expert in creating a narrative, and now it has changed the public’s focus to its feud with Governor DeSantis. But that doesn’t change the truth that Disney is struggling now and maybe for the foreseeable future.