Disney’s new chief executive shocked the business world last week by admitting that the company’s previous opposition to parental rights legislation in Florida was a mistake.
During a town hall meeting with employees, new Disney CEO Bob Iger expressed regret that his predecessor and would-be successor, Bob Chapek, positioned the company against legislation that bans instruction about sexual orientation and gender identity to students younger than fourth grade. The move angered some consumers and resulted in Disney losing special regulatory and tax privileges in the Sunshine State.
Iger, among his several admonitions to the employees of House Mouse, suggested finding the “delicate balance” between telling stories and “listening” to audience members, as well as maintaining “respect for the people that you’re serving” rather than “disdain for them.” However, the seasoned executive expressed doubt that some hot-button topics that recently landed Disney in nationwide controversy are overtly “political.”
Shares for Disney have fallen nearly 41% since the beginning of the year, while the Dow Jones Industrial Average has declined more than 7% over the same period.
Jeremy Tedesco, the senior vice president of corporate engagement for Alliance Defending Freedom, remarked during an interview with The Daily Wire that consumers will need to witness concrete changes at Disney rather than mere lip service before the iconic brand regains their trust. “I guess the proof will be in what actions he actually takes,” Tedesco said, noting that Iger is more progressive in his personal politics than Chapek. “Hopefully he can be somebody who can rise above that and understand that he’s got a duty to shareholders and employees.”
Indeed, evidence of consumer hesitance has appeared within some verticals at Disney over the past several months. Among other concerning metrics, the company reported a significant slowdown in new domestic subscriptions for flagship streaming service Disney+ after entering into the contentious political battle.
Beyond backlash from shareholders and consumers, conservative employees released an open statement detailing the hostile work environment at the company, which has “come to be an increasingly uncomfortable place to work” for individuals “whose political and religious views are not explicitly progressive.” Tedesco observed that a hostile work environment discourages talent, representing a liability for Disney.
“If you just commit to the fact that ‘We have a broad set of beliefs represented in our employee base, and so we’re not going to engage in these things,’ that will be a boon to the employees,” he said. “They’re going to feel much more engaged and not demoralized, like they are now.”
The employees noted the success of highly popular offerings, such as the historical musical “Hamilton” and Star Wars spinoff “The Mandalorian,” as examples of the company’s ability to unify Americans from all walks of life. Some more recent releases have been far more polarizing and have accordingly been trounced in the marketplace. “Strange World,” an animated film featuring a homosexual teenage romance, fizzled at the box office during what should have been a strong holiday weekend opening. “Lightyear,” the latest installment in the popular Toy Story franchise, featured a homosexual kiss and likewise struggled among moviegoers.
“Disney is an object lesson for getting out over your skis when it comes to pushing things outside of your business’s interest,” Tedesco observed.
The entertainment conglomerate is not alone in its zeal for political activism. Executives who ascribe to the environmental, social, and governance movement, also known as ESG, routinely enact policies such as carbon emissions reductions and corporate diversity audits, even if such gestures are harmful to profits. Asset management companies such as BlackRock, Vanguard, and State Street, which own a combined 15% of shares in Disney, have frequently consolidated market power to encourage ESG initiatives within their portfolio companies.
“If Disney is going to start pulling back from ESG and all this partisan politicking on behalf of Disney as a corporation, I think that could be very good, ultimately, for the broader business community,” Tedesco remarked. “I think the bottom line is, we will see what he actually has in mind. It’s one thing to say a few of things from a stage, which, as encouraging as they were, were couched. They were a little vague, it was not entirely clear what he was saying or what the concrete steps would be. They have to take concrete steps to demonstrate that they are serious about rejecting the partisan pressure game that is ESG and internal employee activism.”
Alliance Defending Freedom unveiled a Viewpoint Diversity Score initiative earlier this year, constituting an effort to track “corporate respect for religious and ideological diversity.” Tedesco said that scores were remarkably low in the inaugural analysis, even though companies can adopt a handful of simple measures if they desire to improve their standing. One easily implementable policy is the reversal of prohibitions on employees donating to religious nonprofits in matching gift programs.
As long as Iger neglects to show the marketplace that Disney will begin to respect diversity of thought, according to Tedesco, consumers “are not going to believe those words that came out of his mouth, because the track record up to now has been entirely in the other direction.”
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