Disney, NBCUniversal, and WarnerMedia announced that they either will no longer continue filming or be strongly affected in their decision process on filming in Georgia should that state carry out its highly restrictive abortion law.
Economist Milton Friedman wrote about the dangers to businesses that use social and political issues as a controlling factor in their decision processes. Professor Friedman urged particular caution when businesses become involved in hot-button issues. The Barometer calls them “loser issues.” Both labels apply to those social and political issues that find customers divided. No matter what position the business takes on an issue and the decision to boycott cities, states, and other businesses, it will lose customers. The issues themselves are important, but businesses will lose support (and revenue and possibly employees) no matter which position they take. Abortion and gun control are two such issues. They are critical social and political issues, but a business that vows a boycott because a city or state has taken a position its managers oppose will affect the business.
There is one position a business can take on such issues that is universal and easily explicable. That position, the Friedman position, is one made on the basis of the business’s costs and needs. Such a universal position makes the business an agnostic on social and political issues. The business allows the people of cities and states to make decisions on these issues without tantrums and boycotts from a land far, far away (Hollywood). A business should serve people of all views and allow them the freedom to decide for themselves what their laws and regulations will be. Should the residents of a state or city make decisions that infringe rights there is an active and engaged court system designed to handle those emotional issues on the basis of laws and rights, not whether “Black Panther” or “Captain America:Civil War” will be filmed in their state.
Disney stockholders should be scratching their head right now.
First, Georgia has one of the best film incentive programs in the nation. This tidy business deal to attract film business to Georgia saves Disney millions in production costs as well as tidy savings on the line of credit interest payment Disney makes to their bank. But you can be sure that Disney is right now negotiating with abortion states to match the sweet deal Georgia gives Disney.
Second, Disney is telling the shareholder they are now publicly encouraging aborting a large portion of the next generation of the Disney target market (the outcasts), which will result in fewer children enjoying Disney products and fewer parents paying for the products.
It will be interesting to watch the long term consequences of Disney changing their successful entertainment business model to an overt political activism model.
And this from a company that does business in China. On this day, the 30-year marker of Tiananmen Square, we are reminded of the repression, the human rights violations, and the lack of religious freedom that grips the people of that nation in fear and silence. Georgia looks better and better. And the hypocrisy of selective Disney outrage is as silly as making business decisions on the basis of social issues.