Disney Wisely Plays The Long Game, Again
“Playing the long game” is not a new saying. In sports, it means throwing the football down the field or driving the golf ball toward the green. Urban Dictionary defines it as “considering the future implications of current choices, thinking ahead, being deliberate and patient.”
For more than 200 years, Orange County has thrived because businesses have effectively played the long game: Irvine Company’s preservation of 57,000 acres of open space is larger than many national parks and, for 3 million residents, gives an unparalleled quality of life from the mountains to the sea. Segerstrom’s development of a world-class performing arts center in Costa Mesa enriches the creative culture. Samueli’s investment in integrative healthcare at UCI, treating the whole person–mind, body and spirit—puts us at the forefront of medical innovation, well beyond Broadcom’s global semiconductor leadership. These are just a few examples of businesses playing the long game, benefitting us all.
Thus, it should have come as no surprise that Disneyland Resort President Josh D’Amaro would make a bold, principled decision to dissolve several tax incentive agreements with Anaheim. The agreements–while smart business for both Disney and the city–and a significant, competitive economic development tool for cities and counties across the nation–were used by special interests to sew mistrust of the company’s motives within the community and leverage political gain.
Disneyland and Anaheim have been partners for over 63 years. Remembering that, Disney chose to think ahead, committing to the future. Likewise, Anaheim has been a great home for Disney. For six decades, it has welcomed, encouraged, and incentivized Disney’s growth. Both partners effectively playing the long game.
Their 1990s public-private partnership resulted in the Anaheim Resort, transforming the area around Disneyland into a world-class destination. A new theme park, hotels, an expanded Anaheim Convention Center, new freeway widenings, roadway improvements, beautiful landscaping and parking benefit visitors and residents alike.
And Disney’s investment fueled investment by businesses countywide. In 1995, the Anaheim Resort generated a net surplus of $10 million annually to the city’s general fund; today, that number has grown to almost $90 million. During that same time Disney has almost tripled its employment in Anaheim and its revenue from the theme parks, hotels, retail, dining and entertainment has grown exponentially.
That’s just Anaheim. The multiplier effect for Orange County—and, frankly, Southern California—is palpable. It’s a $6 billion economic powerhouse that produces nearly $400 million in state and local taxes every year. No wonder Disneyland Resort is one of California’s largest employers.
In 2016, Anaheim leaders chose to further expand policies encouraging more investment, traffic improvements, and incentivizing the market place for high-end hotels. These policies worked previously in Anaheim to create new jobs and economic growth as well as drive a steady, permanent stream of revenue to the city for public services such as police, fire, parks and libraries.
But things changed. Critics questioned the incentives, mischaracterized their history, and threatened the value of the city’s relationship with Disney. Add in a dose of endemic economic angst in the face of globalization, the rising cost of living, housing shortages, changing demographics, and an overall contentious political environment, and we saw rapid deterioration in that long-term public-private partnership.
OCBC strongly supported the deals, valuing not only new jobs and the economic benefits to this county’s largest city, but Disney’s commitment to invest over $2 billion over the next several years, including a new “Star Wars” land unlike any in the world. The agreements and incentives were fully vetted and approved by the city. Nevertheless, today Disney contends that no one business deal is more important than the value of a long-range relationship of mutual respect.
Add to this: just a few weeks ago, Disney agreed to a new contract with 9,700 union workers, raising its minimum hourly wage in January to $15 an hour, three years ahead of new state minimum wage laws. A few weeks later, Disney raised the minimum wage of its hourly non-union workers to $15.75 an hour.
And this week, the company launched a new education program for its hourly employees that covers 100 percent of tuition up front and reimburses the costs for books and fees. In a high cost of living county, investing in employees’ education and advancement to move beyond entry-level, minimum wage jobs, is truly forward-thinking.
This is what playing the long game is all about. This is why OC businesses and their partnering cities thrive here.
I think Walt would be very proud.