As a person who reads regulatory filings for fun and profit, I hope to bring some insight to this thread by quoting from Disney’s latest 10-k, the annual report which is filed with the SEC.
Some of you are familiar with these reports, some are not, but a 10-k (and the attendant 10-q, filed every quarter) is a standardized regulatory filing where the company must disclose their financials, their risk assessments, more. As a general rule, one doesn’t really want to lie on a government filing, but one can use these filings to obfuscate, de-clarify (I just coined that), and hide all sorts of chicanery… and it takes people willing to dig through the footnotes to find this shit out.
Enron, for example, was undone merely by a reporter, Bethany McLean, who wrote a story in March, 2001, about what she found in Enron’s 2000 10-k, asking “Is Enron Overpriced?” (PDF). Enron effectively disclosed, for years, that it was a criminal enterprise, but did so in a way that you had to painstakingly read this 300 page document to figure this out. This process, begun by McLean and then added on by others alerted to her findings, eventually collapsed the company 10 months later. And none of it was new information, it was just information everyone ignored, partly because Enron hid it.
So I want to tackle the question of how important is diversity to Disney as expressed in their government filings, really, the best way to see how a company thinks of itself and how it approaches what they do. I also want to look at their risk assessments - knowing that corporate executives were prepared for this eventuality would help me, as an investor, rest easy.
Diversity and the Disney Business Model
Fortunately, to answer the question of 'where does diversity and LGBTQ fit in the Disney business model?" we don’t have to dig into footnotes.
In Disney’s latest 10-k, filed 11/24/2021 which is causing this hate filled activity, on Page 1 we find that diversity, equity, and inclusion… far from being ‘not what the company does’… is, in fact, the prime driver of future business growth:
(DPEP is “Disney Parks, Experiences, and Products”)
So… diversity is a core business strategy? What else do they say?
Holy shit! No wonder conservative heads are asploding. “This is Disney’s freaking financial blueprint and they’re talking about… diversity? Education? Health care? Environment sustainability? WT actual F? What about parks? What about Snow White? What about ESPN? Why all this hippy-hoppy woke shit???”
(For those who want to learn about ESPN and parks, that’s page 3. But the above is what Disney led their financial report with, and let’s focus on that.)
Let’s look at the Disney model, 30,000 foot view, no moral judgements: They started as a company which mines cultural touchpoints from across the globe, modifies them according to their own internal artistic sensibilities, and then produces a product which, hopefully, resonates with the American audience they produced it for.
And this model worked great for a damn long time, from 1926-2000ish. There was a massive market for cis-heteronormative productions featuring white people and Disney worked, ruthlessly, for 75 years to market and sell into that pipeline (and they’re still selling into it!)
But, like all markets, that one became saturated. And Disney realized that there are other pipelines, one not featuring white kids or with the white kid as the central figure in a cringingly-diverse group setting.
Disney doesn’t “run theme parks”. They create art, UV, and to create art which touches as many people as you can… because the capitalist ethos states all of are are to be sold to, and that companies need to relentlessly push for growth… a company which produces art in such an economic environment literally needs people who can speak to all of humanity, not just middle-aged white guys like me. They need to speak to blacks. To gays. To Filipinos. To Uyghurs and Chinese. More. Everyone.
This is why the 10-k, the most important filing of the year, literally started with diversity. Diversity and human resource development is their announced growth strategy, i.e., the development of stories which I, a cis-heteronormative white guy, may ignore but still makes $500,000,000 in revenue. They’re still making movies for me, my God, are they, but their growth strategy must include making stories for Not Me.
And this is stated, page one, of their business model. And Ron DeSantis knows this, and he is knowingly crippling Disney’s efforts to be fiscally responsive to their shareholders by limiting the company’s products to only those which appeal to the most bigoted and hateful subset of the American population.
This is why diversity matters specifically to a company like Disney. They produce art which needs to sell to all people and art limited only to the aesthetic sensibilities of men like me has reached its economic saturation point.
Disney’s Risk Assessment Model needs changing
And, frankly, so does every other corporations in America.
In all 10k’s there exists a section called “Risk Factors”, usually pretty early in the document - in the Disney 10-K it’s Item 1.a, on page 18. Disney’s is pretty significant, going on for 9 pages. I’d like to highlight two of them:
I do not see the potential loss of the district listed as a potential risk. In fact, issues regarding legal changes in “ownership restrictions” only appear in the line about foreign governments.
Next paragraph:
This is about foreign governments.
However, I do think that future 10-k’s would be prudent to include governments within the United States which are expressing corrupt intent, including purposely damaging a corporations business model as to bring it to heel, such as forcing a company to align against a politically marginalized community.
UV, you are arguing for camps. This step of bringing corporations on the side of fascists against marginalized communities… especially a corporation which must reach out to these communities in order to reach their growth targets… is but one step which leads to those communities being placed into ‘hospitals’ (camps), prisons (camps), or just camps.
Stop it. You are wrong. Business-wise, legally, morally. You have lost this argument.