Florida Senate passes bill to eliminate Disney special status

Yahoo Finance's Rick Newman discusses a Florida bill that would strip Disney of its special status in the state.

Video Transcript

DAVE BRIGGS: Welcome back to Yahoo Finance Live. Don't you tell Florida Governor Ron DeSantis not to mess with Mickey Mouse. As a response to Disney CEO Bob Chapek's criticism of Florida's so-called Don't Say Gay legislation, DeSantis is taking aim squarely at Disney-- the state Senate voting earlier today to terminate Disney World's special status.

And the Republican-led House is expected to pass it as well. Rick Newman here to explain what this means for the happiest place on Earth. Rick, good to see you. I'm old enough to remember when conservatives wanted to stay out of business, but that is no longer the case. But what does this mean for the business model at Disney?

RICK NEWMAN: We're not really sure, because this has been in place since Disney World got started in Florida in the Orlando area all the way back in 1967. But probably, it means Disney will have to pay more in taxes. And interestingly, it could also mean that people who live in that area who may not have anything to do with Disney may have to pay more in local taxes as well, basically because Disney kind of runs the government there. It's like a quasi-governmental setup.

So if Florida does change this law-- sorry, that's my cell phone-- then the people who live there might have to pay more because Disney won't be covering government services in the way it does right now. So this is just one of many, many ways we have seen consumer-facing companies face fire from both sides in the last few years over political issues. And let's remember that one of the reasons Disney has opposed-- and this is all about the so-called Don't Say Gay law regarding education in Florida schools-- Disney was getting flak from its customers and from the public for not opposing the law.

So they're getting pressure from customers to oppose the law, and now the government in Florida is basically saying, nope, we're going to raise your taxes because you're opposing this law. So can't win situation for Disney.

BRAD SMITH: From customers and also from their own employees as well. And so with all of that, both internal and external backlash, what does this square up for Disney going forward from here? We're taking a look at shares-- of course, much of the share price action that we've seen on the day is closely tied to the streaming side of the business, as we have been watching Netflix earnings yesterday. But I think going forward from here, what would you particularly look for to come from Disney-- their own management is going through their own little brouhaha at this point in time as well.

RICK NEWMAN: I mean, probably very little in terms of how this one action-- I mean, clearly, this is politically motivated. This has stopped being surprising. So this is really just a cost of doing business for some of these companies. So I don't expect this will affect Disney's financials very much.

But something that caught my eye is that the Democratic governor of Colorado, Jared Polis, said, hey, we would love to host Disney-- he's offering Disney asylum in Colorado and saying, hey, why don't you start a Mountain Disney, or a mountain escape, and we'd be happy to have you. So Colorado is, fair to call it, a purple state. And Jared Polis is a Democrat. He's also gay.

And you have one Democrat saying, we'd love to have you under any conditions. We want the business. So maybe there are a few states in the middle that still would just like to have companies come and run their business without getting in the way.

RACHELLE AKUFFO: And, Rick, you raise an interesting point, because, obviously, Florida is pushing into things like wanting to become a crypto hub, a global crypto hub. What sort of message does this send when we do keep seeing this sort of intersection between politics and how that could affect your business if you want to do business in Florida but you know that you have to tread this fine line?

RICK NEWMAN: Well, clearly, the message from Governor DeSantis is we want businesses to come to Florida as long as you're not a woke business. So I guess it's worth keeping in mind that there are a lot of companies that don't have to take sides on these issues. It's really the consumer-facing companies-- the companies that would face some kind of boycott from customers and also from employees, as Brad pointed out.

Those are the ones that have to know steer around these types of landmines. There are a lot of industrial companies, wholesale level companies, and companies like that I guess can take advantage of what still is a pretty favorable business environment in Florida to go there. But this is just a new thing CEOs have to deal with.

I don't think this is a passing fad. I think CEOs at this point as part of the risk of doing business in any environment, they have to ask themselves, am I going to get stuck in the middle of some political controversy I don't want anything to do with that's going to force me to take sides? And then if you do have to take sides, what should you do?

There are some advocates who say, look, just take a principled stance and deal with the consequences. But of course, we see a lot of companies kind of trying to have it both ways, which is basically what Disney did here by staying silent for a long time and not taking a position, and then taking a late position that has now generated this action from the governor.

DAVE BRIGGS: Rick, another company dealing with Ron DeSantis is Twitter-- he also took aim at them saying he wants to hold their board accountable for their fiduciary duty. His suggestion is that they should accept Elon's takeover bid. And at the base of all this is a guy who wants to run for president.

Most see him as the signature opponent of Donald Trump. Is this a popular play? Is this how he builds a campaign? Or is there any actual teeth to holding the board accountable here?

RICK NEWMAN: My first question for Governor DeSantis is, whatever happened to limited government?

DAVE BRIGGS: Yeah.

RICK NEWMAN: I mean, Dave, I think you raised that question at the beginning of this segment. I mean, what is the deal with Republican governors who supposedly believe in just letting businesses run themselves and stay out of the way? I mean, how often do we hear Republicans say the best thing for government to do is just stay out of the way?

Well, clearly, this is one Republican who's not staying out of the way. So as with many Trumpy elements of the Republican Party, this is a test of, does the old pro-business Republican Party even still exist? Or is it more effective politically these days for Trumpy Republicans, which is to say, I think, the majority of the Republican Party, to just go for winning anti-woke points or every type of point-- and this gets into the culture wars, and the cultural battles, and all those things-- should they just regard business as yet another combatant in these various types of wars? I don't know the answer. But it's quite interesting to watch, I'll say that.

RACHELLE AKUFFO: Especially in a midterm election year as well. A big thank you to our very own Rick Newman there.