Disney Opposes Biden Tax Increases … Gosh

 by Ray Keating

Commentary

DisneyBizJournal.com

September 4, 2021

 

When The Walt Disney Company signs on to the latest political cause favored by liberal activists, the company receives praise … or at least the company hopes to be praised … from those political corners. However, when Disney opposes an effort favored by the Left, the criticism, of course, comes swift and hard.

 

We’re seeing the criticism juicing up as Disney is part of a wide business coalition opposing the various tax increases proposed by President Joe Biden and Democrats in Congress, including increasing the corporate income tax rate by 40 percent, from 20 percent to 28 percent.

Getting involved in political issues always ranks as a dicey proposition for any business. And while lots of people talk about “corporate social responsibility,” there are assorted problems with such undertakings, from the risk of angering and chasing away part of your customer base to the ethical questions regarding corporate managers using shareholder dollars to fund their personal causes.

 

But the effort by Disney and seemingly countless other businesses regarding the Biden tax plan is an obvious case of businesses basically being forced to engage in the political process, such as via lobbying and advertising, to stop legislative measures that will directly hurt the company and its owners.

 

There is nothing nefarious about such undertakings by businesses, despite efforts by some to paint them that way, such as in a recent Washington Post story that verges on presenting rather standard responses by businesses to damaging legislation as a kind of conspiracy by business to hurt the little guy. 

 

Of course, President Biden, whose administration has been unrelenting in hammering away at large businesses, is presenting his tax increases on business somehow as tax cuts for the little guy. Never mind that this makes no sense. Never mind that tax increases on business are never good news for individuals seeking jobs and increased earnings. After all, entrepreneurs, businesses and investors create jobs, and make investments that enhance worker productivity and therefore worker incomes.

 

So, with the Biden administration, Democrats in Congress, and their many political allies pushing for increased tax burdens on business, the business community must respond. It would be irresponsible not to do so. Indeed, it was the same case when the Republican Trump administration and its allies pushed protectionist measures that reduced opportunities in international markets and raised costs for business.

 

The decision of whether or not to engage on a political issue should be easy for companies like Disney. It shouldn’t be about the personal political preferences of company executives. Instead, it should simply be based on whether or not the issue or proposed legislation will impact the business. If so, then engage for or against as called for; and either way, get back to business, that is, innovating and serving your customers.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant 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?

 

Keating has three new books out. Vatican Shadows: A Pastor Stephen Grant Novel is the 13ththriller/mystery in the Pastor Stephen Grant series. Get the paperback or Kindle edition at Amazon, or signed books at www.raykeatingonline.com. Past Lives: A Pastor Stephen Grant Short Story is the 14th book in the series. Again, get the paperback or Kindle edition at Amazon, or signed book at www.raykeatingonline.com. And order the 15th book in the series What’s Lost? A Pastor Stephen Grant Short Story – grab it at Amazon.com or signed editions at www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

 

You also can order his book Behind Enemy Lines: Conservative Communiques from Left-Wing New York  from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. 

 

Please support the efforts of DisneyBizJournal.com to bring news, analysis and commentary on Disney to readers such as yourself. Make a contribution right here via PayPal. Thanks!

Chapek Issues Statement Regarding the Attack on US Capitol

 by Ray Keating

News

DisneyBizJournal.com

January 7, 2021

 

Bob Chapek, CEO of the Walt Disney Company, issued a statement this evening (January 7) regarding the attack on the U.S. Capitol Building on Wednesday (January 6). The following was posted via Disney’s Twitter account:

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the  Pastor Stephen Grant novels and assorted nonfiction books. He can be contacted at  raykeating@keatingreports.com.

 

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

 

Keating’s new book Vatican Shadows: A Pastor Stephen Grant Novel is the 13th thriller/mystery in the Pastor Stephen Grant series. Get the paperback or Kindle edition at Amazon, or signed books at www.raykeatingonline.com.

 

You also can order his book Behind Enemy Lines: Conservative Communiques from Left-Wing New York  from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. 

 

Please support the efforts of DisneyBizJournal.com to bring news, analysis and commentary on Disney to readers such as yourself. Make a contribution right here via PayPal. Thanks!

From King of Disney Streaming to TikTok Troubles: The Strange Journey of Kevin Mayer

by Ray Keating

Analysis

DisneyBizJournal.com

August 3, 2020

It’s been a wild eight-plus months for Kevin Mayer, the former head of Disney’s streaming business.

In November of last year, Disney+ launched to great acclaim, and subscriber numbers ran far ahead of expectations. The new streaming service and Hulu were under the leadership of Mayer at the Walt Disney Company. He was riding high, and most watchers expected him to be named Bob Iger’s successor to run the entire House of Mouse empire.

However, Iger and Disney surprised just about everyone in February, when Iger announced he was stepping down immediately as CEO, and Bob Chapek – not Mayer – was named to run the Walt Disney Company.

About three months later, on May 18, Mayer announced that he was resigning from Disney to take the job of CEO of TikTok, the app for easily making and sharing short videos, as well as chief operating officer of the app’s parent company, ByteDance, a Beijing-based company.

It’s not unusual for a key executive passed over for the C-Suite to leave for another position. But Mayer had one of the best streaming jobs at the top entertainment company on the planet. And while TikTok had gained enormous popularity – though largely among teens – there were questions about the company. And those questions have only multiplied since Mayer became CEO at the app.

The combination of TikTok’s wild popularity and the fact that it is a Chinese company, with potential exposure to informational demands and controls by the Chinese communist government, makes for an uncertain future, to say the least. The U.S. federal government has national security concerns, and has unleashed attacks on TikTok, with President Trump threatening to shut it down in the U.S. The Indian government already has banned TikTok in that country. 

Clearly, TikTok was hoping that hiring Mayer, as an American CEO, would help, along with Mayer’s U.S.-China experience given the fact that Disney is deeply involved in China, with parks in Shanghai and Hong Kong. 

In fact, the ByteDance founder, Zhang Yiming, took certain structural precautions with his company hoping to avoid political woes. The New York Times reported:

He made TikTok unavailable in China so the video app’s users wouldn’t be subject to the Communist Party’s censorship requirements. He stored user data in Virginia and Singapore. He hired managers in the United States to run the app and lobbyists in Washington to fight for it on Capitol Hill. None of that counted for much in the end.

In the U.S., the politics have swung between Trump threatening to close the app down to the president being open to Microsoft buying the U.S. business of TikTok. And in a still more bizarre and unprecedented twist, President Trump wants the U.S. Treasury to receive “a lot of money” for “making it possible for this deal to happen.” 

According to The Wall Street Journal, Microsoft not only is interested in TikTok’s U.S. business, but talks also are covering the app’s business in Canada, Australia and New Zealand. September 15 stands as the target date, for now, to get a deal done. Microsoft apparently is enticed by the idea of expanding its business to young consumers, given the company’s success in recent years with corporate customers.

Whether a Microsoft deal gets done or not, either outcome presents further uncertainty for Mayer. If Microsoft purchases this chunk of TikTok, one would think that Mayer would go with the U.S. part of the business. And then one has to wonder if Microsoft would want to keep Mayer in the top spot at the U.S. version of TikTok. If so, he would suddenly be back running one part of a larger business. If the Microsoft deal doesn’t materialize and the app gets shutdown in the U.S., what value would Mayer then bring to TikTok?

So, many questions and unknowns loom for a guy who, just a few months ago, was one of the top players in online streaming. Indeed, Mayer has gone from the heights of playing a key role at one of the world’s top brands – Disney – to now slogging around in the muck of political controversy in the U.S., China and India. You have to wonder if Mayer is wondering.

In the end, Kevin Mayer might still emerge from this seeming mess sitting pretty – perhaps leading a Microsoft effort to compete with Facebook. But right now, it seems that leaving the leading streaming gig at Disney might not have been the best choice for Mr. Mayer.

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.

Also, get the paperback or Kindle edition of Ray Keating’s new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York.

Ugly Trade Policy Means Things Could Get Ugly for U.S. Businesses, Including Disney

by Ray Keating

Analysis/Commentary

DisneyBizJournal.com

May 10, 2019

Trade – indeed, free trade – matters. It matters to American consumers. It matters to U.S. businesses and their workers. And it matters to the Walt Disney Company.

In an August 2018 article, DisneyBizJournal.com gave a rundown on trade, and why protectionist measures – imposed and threatened – are negatives for the U.S. economy, and for Disney. As we noted:

History and economics make clear that advancing free trade makes for sound policymaking. The way to deal with China, for example, and its challenges is not to hurt U.S. consumers and businesses with tariffs and a trade war, but instead to constructively engage with the Chinese in an effort to work toward a free trade agreement.

So, protectionism is a wildcard working against sustained strong economic growth. And it certainly is troubling for a company like Disney. Obviously, any barriers to and reductions in trade will hurt The Walt Disney Company given its sizeable international footprint. 

Indeed, near the start of the Trump administration, Disney CEO Robert Iger warned, “An all-out trade war with China would be damaging to Disney’s business and to business in general. It’s something I think we have to be very careful about.”

And if a trade war expands, it must be recognized that U.S. intellectual property industries, including the entertainment business, rank among our top exporters, and could come to be a target of retaliation. In addition, Disney will be hurt at home due to increased costs resulting from U.S. tariffs.

Unfortunately, things just seem to keep getting uglier in terms of trade policy, with the latest problem being President Trump’s increasing tariffs on a wide array of goods coming from China from 10% to 25%, with threats of more tariffs (i.e., taxes on imports) being imposed.

Politicians often make silly statements about free trade, how trade works, and tariffs – either out of ignorance, due to political pandering, or both. But during much of the post-World-War-II era, the U.S. fortunately led the globe toward reducing government barriers that raise costs for individuals and businesses to trade across borders. However, that started to change during the Obama administration, with the U.S. sitting on the trade sidelines during much of President Obama’s time in office, and then the U.S. turning hostile toward freer trade under President Trump.

Moments like these point to the reason why I originally became an economist, and why, much more recently, I started doing the “Free Enterprise in Three Minutes Podcast.” Following are episodes dealing with trade. Please take a few minutes to listen, and if you see value, please pass on to others, including any politicians you might know.

Link to the general “Free Enterprise in Three Minutes Podcast” page.

http://www.buzzsprout.com/155969

And here are direct links to trade topics...

Free Trade Rocks!

http://www.buzzsprout.com/155969/649162-episode-2-free-trade-rocks

Protectionism Sucks!

http://www.buzzsprout.com/155969/651383-episode-3-protectionism-sucks

The Real Deal on the Trade Deficit

http://www.buzzsprout.com/155969/656803-episode-4-the-real-deal-on-the-trade-deficit

Mercantilism – Wrong in the 18th Century, Wrong Today

http://www.buzzsprout.com/155969/820421-episode-19-mercantilism-wrong-in-the-18th-century-wrong-today

Trade, Investment and the Balance of Payments

http://www.buzzsprout.com/155969/860172-episode-23-trade-investment-and-the-balance-of-payments

In the end, the protectionist agenda of the Trump administration ironically works directly against the administration’s tax and regulatory policies. Namely, while the tax and regulatory policies have been pro-growth – by reducing governmental burdens on entrepreneurs, businesses and workers – the Trump trade agenda has been explicitly anti-growth by increasing such burdens.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels, with three books - Reagan Country: A Pastor Stephen Grant Novel, Heroes and Villains: A Pastor Stephen Grant Short Story and Shifting Sands: A Pastor Stephen Grant Short Story – published in 2018. In addition, the second edition of Warrior Monk: A Pastor Stephen Grant Novel was published in January 2019. He can be contacted at  raykeating@keatingreports.com.