Disney, Florida settle bitter legal feud over Disney World district

[March 28, 2024]  By Dawn Chmielewski and Lisa Richwine

(Reuters) -Walt Disney and appointees of Florida Governor Ron DeSantis reached a settlement on Wednesday to end a high-profile lawsuit in state court over control of the special district that includes the Walt Disney World theme parks.

Disney also agreed to defer briefings in a federal lawsuit it filed against DeSantis while the parties try to reach a consensus on a new development agreement for Walt Disney World, among other matters.

"This agreement opens a new chapter of constructive engagement with the new leadership of the district," Walt Disney World President Jeff Vahle said.

DeSantis and Disney, one of Florida's biggest employers, have been embroiled in a dispute since 2022, when former Disney CEO Bob Chapek criticized a state legislative effort to limit classroom discussion of sexuality and gender issues for younger students. Critics described it as the "Don't Say Gay" law.

A Florida board appointed by DeSantis to oversee development around Disney's theme parks sued the company to void "backroom deals" favorable to the entertainment conglomerate.

The clash was a centerpiece of DeSantis' speeches last year as he sought the Republican nomination for U.S. president and bashed the company as "woke Disney."

DeSantis later limited his public attacks on the company and dropped out of the presidential race in January.

The settlement showed that both sides wanted to move past the skirmish and restore the historically strong relationship between Disney and state officials, said David Jolly, a former Republican congressman from Florida who is now an independent.

Jolly said he believed DeSantis and his allies lost their appetites for the battle once the governor exited the presidential contest.

"It made sense for his politics," Jolly said. "It never made sense for Florida's economy or for the long-term interests of the state."

Disney's four theme parks in Orlando attracted roughly 47 million visitors in 2022, according to industry statistics.

Speaking to reporters on Wednesday, DeSantis said the state's actions had been "vindicated."

Republican presidential candidate and Florida Governor Ron DeSantis speaks during a campaign visit ahead of the South Carolina presidential primary in Myrtle Beach, South Carolina, U.S. January 20, 2024. REUTERS/Randall Hill/File Photo

"A year ago people were trying to act like all these legal maneuvers were all going to succeed, and the reality is here we are a year later, not one of them has succeeded," he told reporters, according to the New York Times.

Under the terms of the settlement, Disney agreed not to challenge the oversight board's view that the land use plan adopted by the previous board, in the waning days of its oversight of Walt Disney World, is invalid.

That would leave a plan adopted in 2020 as the working blueprint for the Orlando theme parks and retail district. Disney also agreed to drop a lawsuit over access to public records.

Members of the Central Florida Tourism Oversight District approved the settlement at a meeting on Wednesday. The agreement was reached after the departures of board chairman Martin Garcia and the district's administrator, Glen Gilzean.

"We're eager to work with Disney and other businesses within Central Florida to make our destination known for world-class attractions and accountable governance," Central Florida Tourism Oversight District Vice Chairman Charbel Barakat said on Wednesday.

In the federal suit, Disney had accused DeSantis of "weaponizing" government by punishing the company for exercising free speech rights. A judge dismissed that lawsuit in January, but Disney appealed. The appeal is now paused while the sides hold talks.

The Florida legislature created the Reedy Creek Improvement District in 1967 to promote the development of Walt Disney World on 38.5-square miles of land.

Disney paid taxes to that district, which provided municipal services and exempted it from some regulations.

The company's shares rose 0.9% to close at $120.98 on the New York Stock Exchange on Wednesday.

(Reporting by Dawn Chmielewski and Lisa Richwine in Los Angeles and Aditya Soni in Bengaluru; Editing by Arun Koyyur, Mary Milliken and Bill Berkrot)

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