Disney's stock has lost nearly $50 billion in value since the start of March, when it took a political gamble to oppose Florida's controversial new education law.

Disney’s stock was down more than 2% on Friday and by more than 8.5% over the past few days as Florida lawmakers work to punish the company for wading into the state’s politics. The stock's market cap has declined by about $46.6 billion since March 1, just days before the company came out against the legislation.

The public row between Republican lawmakers and Disney has recently been front and center in the battle over the Parental Rights in Education bill, branded the “Don't Say Gay” bill by opponents.

Initially, Disney did not take a position on the legislation, which would ban classroom instruction of sexual orientation and gender identity through the third grade, but under pressure from investors and employees, the company relented and came out in full-throated opposition to the legislation. Furthermore, Disney CEO Bob Chapek said his company would end political donations in the Sunshine State.


Now Republican lawmakers are exacting their revenge.

This week in a 23-16 vote, the GOP-led Senate passed the legislation that would dismantle the Reedy Creek Improvement District, which allows Disney to oversee its own zoning, infrastructure, laws, and policing in the area around its parks. The state House also voted to do so by a 70-38 vote.

The legislation dissolves special districts created before 1968 (Reedy Creek was established in 1967). Thomas Smythe, a finance professor at Florida Gulf Coast University, pointed out there isn’t a precedent for Florida undoing a large special district like Reedy Creek and that the change introduces major business uncertainty.

Florida Gov. Ron DeSantis’s office contended that the Reedy Creek district offers Disney unfair business advantages.

“Special districts could in some instances show favoritism,” the office told the Washington Examiner in a statement this week. “Should a corporation be serving as a regulator and a business at the same time? Should a corporation get to avoid standard environmental permitting processes? Should a corporation engage in eminent domain? Other businesses don’t get these privileges.”

Smythe told the Washington Examiner that the move by Republicans could have unintended consequences for taxpayers and a chilling effect on business investment in the Sunshine State.

Reedy Creek reportedly has bond liabilities of between $1 billion and $1.7 billion. Should it be dissolved, those liabilities would likely be transferred to the nearby counties of Osceola and Orange, according to CNBC.

“The debt service alone for Reedy Creek is over a billion dollars,” Democratic state Sen. Gary Farmer told CNN. “This bill makes no provision as to how that debt service is going to be assumed. Local government entities must pick up assets and liabilities of any special district that is dissolved.”

Reedy Creek’s self-governing services are essentially paid for by Disney taxing itself, with the district collecting an estimated $105 million annually. Should Reedy Creek be taken over by the neighboring counties, they would likely end up having to make up for the loss of revenues needed to fund local services in the special district.

“To me, the big issue here is that nobody knows what the repercussions are financially,” said Smythe, noting that taxpayers could end up footing the bill.

Republican sponsors of the legislation have acknowledged that big questions remain about the legal and financial effects of the legislation but have argued that the logistics can be worked out over the coming months.

Smythe said he doesn’t think the decision by Republicans to target Disney sets a good tone for the state, which has touted its business-friendly bona fides. Smythe said that while he doesn’t think it is good policy for companies to wade into hot-button social and political issues like Disney did, the move by the state legislature could spook business investment in the state.


“It could very well discourage other companies, especially [those] in the high-tech arena. It may give them pause as to whether or not they want to be here or not,” Smythe said, adding that if Democrats return to power, the Disney precedent could lead them to retaliate similarly against conservative advocacy from companies.

“Now that the Pandora’s box is opened, we could just as easily see a Democratic administration targeting somebody, so I don’t think it’s good for the state,” he said.