Disney (DIS) and the state of Florida reached a settlement on Wednesday to end litigation over the company's long-standing special tax district.
The district, previously known as the Reedy Creek Improvement District (RCID), allowed Disney to operate as a self-governing entity since its inception; however, Florida Governor Ron DeSantis seized control of the district last year following Disney's opposition to the state's "Don't Say Gay" law. The law forbids instruction on sexual orientation and gender identity from kindergarten through third grade.
"We are pleased to put an end to all litigation pending in state court in Florida between Disney and the Central Florida Tourism Oversight District," Jeff Vahle, president of Walt Disney World, said in a statement.
"This agreement opens a new chapter of constructive engagement with the new leadership of the district and serves the interests of all parties by enabling significant continued investment and the creation of thousands of direct and indirect jobs and economic opportunity in the State," he added.
The high-profile Florida showdown has served as a years-long overhang for Disney as it fends off proxy battles and grapples with challenges that include a declining linear TV business, slower growth in its parks business, and losses in its streaming division.
At the time of his board takeover, DeSantis removed Disney's hand-picked RCID board members and Florida lawmakers retroactively invalidated the agreement between Walt Disney World and the district. DeSantis then appointed five new people to call the shots and rebranded the district as the Central Florida Tourism Oversight District (CFTOD).
The CFTOD sued Disney in May of last year to void what it described as eleventh-hour "backroom deals" that favored the media giant and undercut the new board's powers. Disney countersued the board a few months later, alleging breach of contract.
According to the settlement, those actions would be "null and void" as both parties "now express a mutual desire to resolve all disputes" related to pending litigation in Florida's state court.
"We are glad that Disney has dropped its lawsuits against the new Central Florida Tourism Oversight District and conceded that their last-minute development agreements are null, void, and unenforceable," Bryan Griffin, the governor's communications director, said in a separate statement.
"No corporation should be its own government. Moving forward, we stand ready to work with Disney and the District to help promote economic growth, family-friendly tourism, and accountable government in Central Florida."
The settlement also included language that suggests Disney may drop its federal complaint against Gov. DeSantis "pending negotiations among other matters of a new development agreement between Disney and the District."
Last month, Disney filed a notice of appeal after a federal judge dismissed its free speech case against the governor, determining the company's position ultimately "lacked standing," or the right to sue DeSantis and a separate government official.
Disney filed the federal lawsuit last April, alleging DeSantis and the CFTOD board launched a "targeted campaign of government retaliation" to punish Disney for its position on "Don't Say Gay."
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].
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