Amid Feud With DeSantis, Disney Cancels $1 Billion Development in Florida

The Lake Nona campus, about 20 miles from Disney World near the Orlando International Airport, had been championed by Bob Chapek, who served as Disney’s chief executive from 2020 until he was fired last year. Mr. Iger, who came out of retirement to retake Disney’s reins, was much less enthusiastic about the project — even before the company became mired in its battle with Mr. DeSantis. As soon as he returned to Disney, Mr. Iger began telling lieutenants, for instance, that it made little sense to move Imagineering so far away from Disney’s movie studios. As he is fond of saying, “Creative teams need to be together.”

Mr. Iger has been systematically reversing Mr. Chapek’s decisions. In February, for instance, he announced that Disney would restructure its inner workings, ending a framework put in place by Mr. Chapek. In March, as part of wide-ranging layoffs, Mr. Iger shut down a 50-person metaverse project that Mr. Chapek had started.

Disney is also in the midst of cutting $5.5 billion in costs as it seeks to improve profitability, pay down debt and restore its dividend. Later on Thursday, for instance, Disney said it would close an underperforming luxury hotel at Disney World. The 100-room property, announced in 2017 and opened last year, simulated a two-night trip on a “Star Wars” spaceship. Bookings started at $6,000 for a family of four; the price limited interest. Disney spent hundreds of millions of dollars to build and market the immersive offering, which it called the Galactic Starship.

Disney shares closed at about $94 on Thursday, down about 45 percent from two years ago.

Mr. DeSantis and Disney have been sparring for more than a year over a special tax district that encompasses Disney World. The fight started when the company criticized a Florida education law that opponents labeled “Don’t Say Gay” because it limits classroom instruction about gender identity and sexual orientation — angering Mr. DeSantis, who repeatedly vowed payback.

Since then, Florida legislators, at the urging of Mr. DeSantis, have targeted Disney — the state’s largest taxpayer — with a variety of hostile measures. In February, they ended Disney’s long-held ability to self-govern its 25,000-acre resort as if it were a county by giving Mr. DeSantis control over government services at the resort.

It was soon discovered that the previous, Disney-controlled board had approved development contracts that lock in a growth plan for the resort. An effort to void those agreements has since resulted in dueling lawsuits, with Disney suing Mr. DeSantis and his allies in federal court and the governor’s tax district appointees returning fire in state court.