Disney acknowledged risks due to a “misalignment” between the company’s products and the public that are hurting its bottom line in recent filings with the government.
Disney filed its annual SEC report for the year ending on September 30 last week. George Washington law professor Jonathan Turley pointed out the report in a column with The Hill on Saturday.
“We face risks relating to misalignment with public and consumer tastes and preferences for entertainment, travel and consumer products, which impact demand for our entertainment offerings and products and the profitability of any of our businesses,” the SEC filing states.
Disney says that the “success of our businesses depends on our ability to consistently create compelling content.” One of the chief hurdles it faces is “consumer tastes and preferences that change in often unpredictable ways,” the filing says.
“Generally, our revenues and profitability are adversely impacted when our entertainment offerings and products, as well as our methods to make our offerings and products available to consumers, do not achieve sufficient consumer acceptance. Further, consumers’ perceptions of our position on matters of public interest, including our efforts to achieve certain of our environmental and social goals, often differ widely and present risks to our reputation and brands,” the filing says.
The SEC report shows that “Disney appears concerned that [the] ‘invisible hand’ of Adam Smith is effectively giving the ‘House of Mouse’ the middle finger,” according to Turley.
The filing comes after Disney postponed the release of its remake of the classic children’s fairy tale “Snow White” following public backlash to a characterization of the film by its lead actress, Rachel Zegler. A photo release of the seven dwarves for the live-action remake drew skepticism, as well.
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“She’s not going to be saved by the prince and she’s not going to be dreaming about true love,” Zegler said of the film earlier this year. “She’s dreaming about becoming the leader she knows she can be and the leader that her late father told her that she could be if she was fearless, fair, brave and true.”
Turley notes that Disney has gone through a rough series of releases.
“Disney has reportedly lost a billion dollars just on four of its recent ‘woke’ movie flops, productions denounced by critics as pushing political agendas or storylines. Yet until now, the company has continued to roll out underperforming movies as revenue has dropped,” Turley said.
“For shareholders, it may seem counterintuitive that corporate executives would trade off profits for political or social agendas. However, it does serve as a rationale for individual corporate executives who are professionally advanced when they champion such causes,” the law professor continued.