Published Online: July 8, 1998
Published in Print: July 8, 1998, as State Journal

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Debating Disney

Over the past two years, Texas has divested $99 million in tobacco stocks from its $14 billion state investment fund for K-12 education.

Now, a five-member bloc of socially conservative state school board members wants to add the Walt Disney Corp. to the list of investments that carry unacceptable social and financial liabilities.

What's more, in a rare alliance, the board's conservative and moderate Republicans, as well as Democrats, may even join forces to pass the proposal to sell the $47 million in Disney stock that the board oversees as part of the Texas Permanent School Fund.

"Disney does a lot of good, but it might not be a prudent investment as more people find out about some of their films," said Jack Christie, the moderate Republican who chairs the 15-member state board.

Proponents of the move argue that the company that created Mickey Mouse is producing and investing in movies whose violent and sexual content is stirring up so much protest among conservatives that its financial worth may suffer. The board is scheduled to vote on the issue when it meets this week.

For some, the issue is more than financial.

"By holding the stock, the board is forcing decent, God-fearing Texans to be complicit in bankrolling an agenda diametrically opposed to their own," argued Wyatt Roberts, the chairman of the conservative American Family Association of Texas, which has lobbied for the sell-off. The group backs a boycott of Disney in protest of what the organization sees as its "anti-family policies," such as giving benefits to live-in partners of homosexual employees.

But board members say that while social concerns may have grabbed their attention, the final decision will be based on economics. "This is not a boycott," Mr. Christie said of the divestment plan.

A spokeswoman for Disney, speaking from the company's headquarters in Burbank, Calif., said that Disney's stock is strong and rose 36 percent in value over the past 12 months.

But, Republican board member David Bradley pointed to a seven-week trend that ended last month during which shares in Disney lost more than 15 percent of their value following an all-time high earlier in the year.

"Certainly, this is not our largest holding," Mr. Bradley said of the Disney investments. "Nor is selling it going to rock the market."

--ROBERT C. JOHNSON rjohns@epe.org

Vol. 17, Issue 42, Page 20

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