Disney’s Interesting Market Risk Acknowledgment

 by Ray Keating

Commentary

DisneyBizJournal.com

November 23, 2023

 

The story about the political battle between Disney and Florida Governor Ron DeSantis has dragged on for some time now, with neither side behaving well. Quite simply, Disney dove into controversial political issues that had nothing to do with the company’s business; and in reaction, DeSantis wielded, i.e., abused, the power of government to attack an entity espousing a political position with which he disagreed.

So, why am I possibly bringing this up again? Well, I just came across an interesting op-ed at TheHill.com written by Jonathan Turley, a professor of public interest law at the George Washington University Law School. It caught my attention because Turley brought up Adam Smith, the father of modern-day economics and author of An Inquiry into the Nature and Causes of the Wealth of Nations (1776), and Disney. For a free market economist who edits and publishes DisneyBizJournal, this amounted to required reading. 

 

Turley’s basic point is that Adam Smith noted “how the ‘invisible hand’ of the market worked as people exercised their choices between certain products. It can shape economies and challenge whole governments. One company in particular appears to be learning that lesson.” That “one company” is Disney. Now, Turley’s subsequent points can be debated, but the most interesting aspect of his piece is what he reported from Disney’s own report to the SEC:

 

In its annual SEC report, Disney acknowledges that “we face risks relating to misalignment with public and consumer tastes and preferences for entertainment, travel and consumer products.” In an implied nod to Smith, the company observes that “the success of our businesses depends on our ability to consistently create compelling content,” and that “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.” (Emphasis added)

 

Wow. Interesting. Again, let the debate rage, but that is a fascinating acknowledgment on the part of Disney.

 

By the way, while Turley went to economist Adam Smith to make his point about the market and consumer choice (and understandably so), I previously noted economist Milton Friedman’s points from a classic 1970 New York Times Magazine article on “social responsibility” of business that directly addressed the matter of corporations and social activism. Check that out here.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

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