The Walt Disney Company just can’t seem to pull itself out of hot water and recently admitted its foray into politics may be the cause of its financial woes. In its annual Securities and Exchange Commission (SEC) report, the company said its success “depends on our ability to consistently create compelling content,” but when it does not “achieve sufficient consumer acceptance,” profits fall.
Disney SEC Report: A Red Flag
If a company wants to remain profitable, it needs to meet the needs and wants of its consumer base. From mom-and-pop stores to big brands such as Disney, if they aren’t offering what customers want to buy, then they will soon be out of business.
Some companies, like the House of Mouse, are discovering – or perhaps rediscovering – that sticking their noses into politics can be just as detrimental to the bottom line as offering unwanted or cheap products. Disney pointed this out in its SEC report, saying its revenues and profits:
“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 positions 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.”
Sen. Ted Cruz (R-TX) talked in depth about the company’s latest financial statements on his podcast, Verdict. He said the report was eye-opening to Disney’s investors, who now realize that the entertainment company prioritized politics over “making the business successful,” claiming it “is one of the most stunning corporate disclosures I’ve ever read.” The lawmaker continued:
“Because what that means, is number one, Disney has lost billions of dollars. The phrase, ‘go woke, go broke,’ Disney has sadly embodied that phrase. I am sure Walt Disney is spinning in his grave at horrors as what has happened to his namesake.
“But the fact that they put this in their SEC disclosures means, number one, the money they’re losing is so significant. Number two, their projections for future money that they’re going to lose are so significant that their lawyer said, ‘D—it, you have to acknowledge this in the disclosure or else you will be sued for misleading investors.'”
Recently, the entertainment giant delayed the release of a Snow White reboot, a $330 million project starring 22-year-old Rachel Zegler (West Side Story) as the princess. Cruz mentioned Disney is showing that it doesn’t want to continue throwing money at movies bound to be unpopular with its audience, and this delay may back up his theory.
Over the summer, fans and critics found out about changes designed to make the film more politically correct. For instance, the famous seven dwarfs were being replaced by “magical (non-dwarf) creatures,” Daily Mail explained.
Zegler didn’t do the project any favors by admitting she “hated” the original 1937 movie and described Prince Florian as a “stalker.” Regarding the reboot, the actress said her character is “not going to be saved by the prince and she’s not going to be dreaming about true love,” which are significant plot points in the film. “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, brave, and true.”
But the actress wasn’t finished, indicating the story didn’t even need the prince’s character, played by Andrew Burnap. “We have a different approach to what I’m sure a lot of people will assume is a love story just because we cast a guy in the movie,” she said, adding, “All of Andrew’s scenes could get cut out, who knows? It’s Hollywood, baby!”
For Disney’s four big-budget releases that flopped this year, Forbes reported that Mouse House spent close to $1 billion. The Marvel Cinematic Universe (MCU) has not been doing well at the box office, either. The Marvels, the latest MCU sequel, earned only “$76.9 million domestically and $110.2 million overseas in the three weeks since it opened,” the New York Post reported. The fairy tale film Wish, released in time for Thanksgiving, generated only $31.7 million out of the forecasted $50 million during the five-day holiday period.
The box office flops are the reason Disney must disclose what caused the company’s continued profit loss. As Cruz said:
“In other words, we must write these words so that when investors sue us and say your executives are putting your woke politics ahead of profitability, ahead of producing entertainment that consumers want, ahead of actually producing family-friendly entertainment that kids are interested in, and parents want their kids to see. That your politics matters more to you than making the business successful. They want to be able to point to this disclosure and say, ‘No, no, sorry, you invested, and we told you up front. We don’t care about making a buck. Our politics is all we care about. And even if it flushes the corporate profits down the commode.’”
Jonathan Turley, a George Washington University law professor and contributor to Fox News, used economist Adam Smith’s “invisible hand” metaphor to explain Disney’s problem with consumers who can use their right to choose between products. In a piece for The Hill, he wrote, “Disney appears to acknowledge that Smith’s invisible hand is giving the ‘House of Mouse’ the middle finger. In a new corporate disclosure, Disney acknowledges that its controversial political and social agenda is costing the company and shareholders.”
He compared the family-oriented icon’s woes to Bud Light executive Alissa Heinerscheid, who said the brand needed to get rid of the frat boy reputation. She was “heralded by colleagues, even though her move went on to tank that brand as a whole,” Turley emphasized.
“The question is the balance and degree of the political and social agenda. Disney’s products are now viewed by many conservatives as empty virtue signaling and endless attempts to indoctrinate children,” Turley advised. He used Disney’s continued fight with Florida Gov. Ron DeSantis (R) and the so-called “Don’t Say Gay” bill as an example. “Moreover, when the company publicly declares its opposition to a popular parental rights bill in Florida, it is moving away from a commercial to a political focus.” He concluded:
“You can bring movies to the public, but you cannot make them sell. Once an unassailable and uniting brand, Disney brand is now negatively associated with activism by a significant number of consumers.”
Now just one question remains: Will Disney wake up from the woke fever dream before there’s no brand left to sell?