Disney Blocks Ron DeSantis With King Charles Clause

Cinderella Castle at Walt Disney World.

Robert Machado Noah | Light Rocket | Getty Images

Forget Disney princesses. Mickey Mouse may have just proved who the real King of Florida is.

Disney used a legal clause that King Charles III. is conducting name checks in what appears to be a thwarting an attempt by Florida Gov. Ron DeSantis to strip the company of its powers of self-government in the state.

For nearly a year, state legislators, encouraged by DeSantis, have been trying to exercise more control over the company’s Florida-based theme parks by passing legislation that would disband Disney’s special tax district. DeSantis also wanted to rename the area the Central Florida Tourism Oversight District and create a new board to oversee it.

DeSantis, widely viewed as a contender for the 2024 GOP presidential nomination, engaged in a bitter and public feud with the entertainment giant early last year over the company’s condemnation of Florida’s HB 1557 law. HB 1557, dubbed the “Don’t Say Gay” law by critics, restricts teaching in early childhood education about sexual orientation or gender identity.

State Rep. Randy Fine told CNBC’s Squawk Box last April that the bill was not retaliation, but then said, “When Disney got into the hornet’s nest, we looked at specific counties.”

While Disney has been silent on the matter for months, the House of Mouse appears to have hatched a plan to retain its control of the land within the outer borders of Orange and Osceola counties.

On Feb. 8, a day before the Florida House of Representatives voted to put DeSantis in charge, the former Disney-allied board signed a long-term development agreement that drastically limits the control that can be exercised over the company and its district.

Under a 30-year development agreement, Disney no longer requires board approval to construct high-density projects and buildings of any height, and to sell or assign development rights. It also prohibits the board from using Disney’s name or any of its characters.

The agreement includes a royal clause, dating back to 1692 in Britain, that would extend their term limits by decades.

This “declaration is intended to remain in force until 21 years after the death of the last surviving descendant of King Charles III, King of England, who is alive at the time of this declaration,” the document reads. This type of clause is most commonly used in the UK, typically when dealing with trusts, and provides a buffer against perpetuity.

“So as long as any of those grandchildren live to be 80, that clause would be in place for 100 years,” said Robert Lord, senior adviser on tax policy at the progressive group Patriotic Millionaires.

DeSantis replaced all Disney-allied board members with five Republicans on February 27. Only then was Disney’s new binding agreement discovered.

“This essentially makes Disney the government,” said Ron Peri, one of the new board members appointed to the CFTOD by DeSantis, during a board meeting Wednesday. “For practical reasons, this body is losing most of its ability to do anything beyond maintaining the roads and maintaining basic infrastructure.”

Florida Gov. Ron DeSantis answers questions from the media in the Florida Cabinet following his State of the State address during a joint session of the Senate and House of Representatives March 7, 2023 at the Capitol in Tallahassee, Florida.

Cheney Orr | AFP | Getty Images

DeSantis officials did not immediately respond to CNBC’s request for comment.

Florida lawmakers have opposed the new agreement, vowing to find a legal way to vacate or invalidate the document. However, Disney says that all of his behavior was legal.

“All agreements signed between Disney and the District were reasonable and were discussed and approved in open, respected public forums in accordance with the Florida government’s Sunshine Act,” the Walt Disney Resort said in a statement.

The district in question is the Reedy Creek Improvement District, established in 1967. It was created by the Florida Legislature to allow Disney to develop the infrastructure for Walt Disney World at no cost to Florida taxpayers.

The agreement has allowed Disney to build theme parks, hotels and other tourism experiences in the Reedy Creek District with little to no oversight. The company also became the largest employer for Florida residents and helped the Orlando area become one of the largest tourism centers in the United States

Until recently, there hasn’t been much public discussion about the dissolution of Disney’s 55-year special borough, leading DeSantis critics to question the timing and speed with which the governor has cracked down on the company.

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