Jeese, I don’t know how this story got by me last week. I guess — what with all those investment institutions that were coming out against Michael Eisner — I got kind of distracted there for a while.
Which is why I want to thank Sweet Pretty Polly Purebred and JaketheSnake — both loyal JHM readers who reside in the Central Florida area — for bringing the whole Reedy Creek Improvement District controversy to my attention.
“Reedy Creek Improvement District what-sy?,” you ask. Okay. Let me explain: Back in 1967, the Florida State Legislature -since it was so desperate to actually close the deal with Disney — passed three bills which gave the Mouse unprecedented control over its Central Florida land holdings. These bills- in essence — made Disney World a separate world unto itself within the State of Florida.
Thanks to the powers that the state had awarded to the cities of Bay Lake and Reedy Creek as well as the Reedy Creek Improvement District, Disney was basically free to call its own shots. Within that 39 square mile area, the Mouse could determine how it policed itself, how high its buildings could be, its tax rates, even where and when liquor could be served.
Obviously, this was a pretty sweet deal for Mickey. But not so much for the Florida State Legislature. Who particularly felt like they’d been had when the plans for Epcot the City (A fun and futuristic place to work and play that was supposed to have added thousands of high paying hi-tech jobs to the Florida State’s tax rolls) somehow mutated into Epcot the theme park (which was still a fun and futuristic place to work and play. The only problem was … Only 25% of the people who work at Epcot receive a salary that is significantly higher than minimum wage).
So — back in 1984 — when it looked like Walt Disney Productions was actually in imminent danger of being chopped up and sold off for parts by greedy corporate raiders like Irwin Jacobs and Saul Steinberg, the Florida State Legislature quietly began to review the Reedy Creek Improvement District charter. Why for? To see if the unprecedented power that the State had granted Disney over its Central Florida land holdings would automatically be transferred to the property’s new owner. However — since neither of these hostile takeover attempts really made it past the saber-rattling phase and the Disney corporation remained pretty intact — those 1980s era Central Florida state reps eventually abandoned their quest.
But now here we are in 2004. With Comcast actively attempting to acquire the Walt Disney Company. Given that history seems to be repeating itself once more, Florida State Representative Andy Gardiner (R-Orlando) supposedly sent a letter to Attorney General Charlie Crist last week. Asking Crist to look over the language of the Reedy Creek Improvement District charter. To determine, once and for all, whether — in the event that Comcast or some other corporation were to suddenly seize control of the Mouse House — that all of these unique governmental powers that Florida had awarded to Disney back in 1967 would automatically be transferred to the Central Florida property’s new owners.
The consequences here, folks, could be enormous. For example: What do you suppose the new owner of the Walt Disney Company might do were they to learn that — just because the Florida Legislature has declared the Reedy Creek Improvement District’s charter to be null and void — that Disney World is no longer the money making machine that it once was? Do you think that they’d then sell the resort off to the highest bidder? Or attempt to make up the monetary shortfall by building on previously underdeveloped land? Maybe adding an enormous house development and/or a series of high priced condos?
I know, I know. This all sounds rather far fetched. But not to Florida State Sen. Lee Constantine (R-Altamonte Springs) or Rep. Jim Kallinger (R-Winter Park). These guys are already getting ready to raise the whole Reedy Creek Improvement Distrct issue in the next legislative session. Which begins — appropriately enough — tomorrow. Tuesday, March 2nd. The very day that Comcast is expected to unveil its latest bid for the Walt Disney Company.
Trust me, folks. This whole Reedy Creek Improvement District question is going to wind up being a HUGE issue as the Disney acquisition talks roll on. In fact, some investment analysts are now suggesting that this issue alone may be enough to make Comcast Corp. abandon its current hostile takeover attempt.
So what might happen then? Well … among the possible scenarios here is that Comcast might be forced to throw in with Roy and Stanley’s “Save Disney” effort. To explain: Let’s say that Wednesday’s proxy vote actually does turn out to be a vehicle to bring about some significant change within the Mouse House. Like — maybe — a”No Confidence” vote of 30% or higher really is enough to get Michael Eisner and several members of Disney’s Board of Directors to finally step down.
As a goodwill gesture, the remaining members of the Board of Directors then ask Disney and Gold to come back home to the Mouse House. Roy and Stanley agree … but only if they’re allowed to get several other individuals appointed to the board as well. Among these people are Comcast CEO Brian Roberts and Comcast Cable president Steve Burke.
With seats on Disney’s Board of Directors, now Roy, Stanley, Roberts and Burke can work from within. So what was once a hostile takeover attempt now becomes a peaceful merger. And — given that a merger means that the Walt Disney Company now doesn’t actually change hands — that means the Florida State Legislature would no longer have grounds to revisit the whole Reedy Creek Improvement District deal.
Trust me, folks. As far fetched as the above scenario may sound, there are people within Disney, Comcast AND Shamrock who have already thought of this. And who are — even as we speak — preparing even more devious scenarios which will prevent major Mouse House assets (like the Reedy Creek Improvement District deal) from wandering off the table.
I promise that JimHillMedia.com will look into this issue once we all get back from Philadelphia. Speaking of which … I’ve gotta get packing here.
More importantly, if anyone has an extra ticket to Wednesday’s annual meeting and would like to take along a guest (mainly me and/or Chuck Oberleitner), I’d really appreciate it if you’d drop me a line.
I mean, I’ve tried going through official channels to get press credentials for Wednesday’s event. But — to date — I haven’t heard back from anyone at Disney.
Gee, do you think that it could be something that I said?
Anyway … look for all sorts of JHM exclusive coverage coming out of Philly starting on Tuesday. In the meantime, you guys have a great Monday, okay?
jrh