We have been discussing the right of shareholders to push back on the social and political campaigns of corporations that reduce share value or damage brands. The concern over the “Go Woke, Go Broke” trend is greatest with companies like Disney, which has been particularly open about its corporate advocacy. That has proven most controversial not just in its announced opposition to the Florida education bill but also children’s movies that contained controversial sexual elements. Now, Deadline has released an analysis showing that Disney lost a staggering quarter of a billion dollars on two of these woke movies: Lightyear and Strange World.
According to Deadline, Lightyear lost $106 million and Strange World lost a whopping $152 million.
“Strange World” is about an explorer family named the Clades. The movie, however, caused a great deal of buzz due to young Ethan talking to his grandfather about his same-sex crush on another boy.
Then there is the actual “Buzz.” In Buzz Lightyear, Disney featured a same-sex kiss. Pixar initially removed the scene. However, after the controversy over the Florida education bill, it was put back into the movie as a reported statement of solidarity.
For many parents, the sexuality elements were a statement that they did not want to address with their young children. The movies bombed at the box office to the tune of a quarter of a billion dollar loss.
Disney has even entered the fray over racial reparations with a controversial children’s episode.
Obviously Disney has company these days in being the subject of a public backlash.
In the case of Bud Light, there has been a backlash and boycott over its sponsorship deal with controversial transgender influencer Dylan Mulvaney.
While Anheuser-Busch InBev CEO Brendan Whitworth issued a non-apology apology, customers are reportedly shunning not just Bud Light but other Anheuser-Busch products.
For its part, Nike is unapologetic and pushed back on critics over its campaign featuring Mulvaney. It told consumers that they needed to be “kind” and “inclusive” while declaring “hate speech, bullying, or other behaviors that are not in the spirit of a diverse and inclusive community will be deleted” from its sites.
These companies could trigger shareholder revolts if the moves continue to spark boycotts or diminish sales.
Environmental, Social, and Governance (ESG) policies have already led to limited litigation, including shareholder demands for greater transparency or ESG commitment from companies. Some shareholders have also argued that the political views of corporate officers are being pursued over the profits of the company.
Such lawsuits on both sides can be difficult. Shareholders may allege a breach of the “duty of loyalty,” but must show that the officials acted in a self-interested manner or in bad faith. Alternatively, they could argue a breach of the “duty of care,” which requires a showing that the officials acted in a grossly negligent manner.
Disney executives were clearly willing to risk taking a loss over these political and artistic decisions. These moves may be personally gratifying and even professionally advantageous for individual executives, though it did not work out well for former Disney CEO Bob Chapek. The question is whether shareholders will continue to subsidize such campaigns regardless of their impact on the brand or the bottomline.