Imagine Mickey Mouse with sunglasses and a visor at the World Series of Poker. Maybe you can see Goofy in your mind’s eye at the roulette table shouting, “Mommy wants a new pair of really big shoes, ah-haw-haw!”
Dare I suggest Daisy Duck smoking a stogie and hitting on 17 in blackjack?
If these thoughts seem out of place, then imagine how Walt Disney (NYSE:DIS) would feel at the juxtaposition of these images. Yet despite the oddities involved in these scenarios, they are not the reasons why Disney is donating 90 cents of every dollar to Republican candidates in the state of Florida. Disney wants Republicans in the state legislature because they’ll oppose plans to permit casino gaming in the state of Florida.
That’s right: It has nothing to do with Disney’s squeaky-clean image at all. It’s because Disney doesn’t want the competition.
Disney World and all its associated theme parks are there in Florida, and Disney’s cruise line has a home in South Florida. And let me tell you: Given a choice between waiting in an hourlong line for Dumbo or behaving like a degenerate at some Wynn Resorts (NASDAQ:WYNN) casino, I’m taking the low road every time.
Disney has cause for concern.
And because there are important political and investing lessons from Disney’s behavior, and since investing is often informed by politics, this bears examination.
I am well-entrenched in various areas of business, and consequently also am entrenched in the political process regarding my areas of expertise. The general public has no idea how much goes on behind the scenes that they never hear about, never see and never be privy to.
Lobbyists exercise their — and their clients’ — First Amendment rights by intelligently discussing issues with policymakers. Policymakers and their staff will often look carefully at an issue to determine whether it will benefit them, and if so, whether it will benefit their constituents. They take their jobs seriously — at least some of them do, anyway. Deals are struck, compromises are made, and regulations or legislation gets passed. The guy who donates the most might not always get what he wants, but he will get heard.
I don’t begrudge Disney at all. Not a bit. The company is exercising its right to free speech and using the political system to protect its investment. Likewise, the casinos certainly are pressing their case as well.
In the meantime, both are trying to get their voices heard amidst the din of all the other interested parties.
From an investor’s perspective, the truth is it probably won’t matter very much either way.
If Disney loses and casinos appear, there’s likely to be some impact on theme park and cruise revenue, but considering the sheer breadth of Disney’s empire, I doubt it would be significant. In addition, the casinos would employ a lot of people in an economy that could use more employment. Public casino stocks that open up shop there are now even more diversified, as are providers like SHFL Entertainment (NASDAQ:SHFL) and International Game Technology (NYSE:IGT), so they might see an uptick in revenue.
There’s no downside here, if you ask me. More jobs get created at Disney’s revenue expense, or Disney maintains its entertainment dominance in South Florida.
Seems to me the only issue is if Pluto runs away from home to become a pole dancer, and that’s not likely.
As of this writing, Lawrence Meyers did not hold a position in any of the aforementioned securities. He is president of PDL Capital, Inc., which brokers secure high-yield investments to the general public and private equity. You can read his stock market commentary at SeekingAlpha.com. He also has written two books and blogs about public policy, journalistic integrity, popular culture and world affairs.
The opinions contained in this column are solely those of the writer.
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