Q1 The issue in the case of “A Brawl in Mickey’s Backyard” is that the employees at Disney feel that they are not treated well by the famous theme park owners going so far as to say that “they want to make money [referring to Disney], but they don’t care about the employees”. The uproar and the sentiment was expressed more vigorously in the opening scene of the case, when dozens of protestors gathered in August of 2007 to stage a kit to express their open displeasure at Disney’s lack of support for their employees.
The protest was instigated when a local developer called SunCal arranged to buy 26 acre site in the resort district across the street from the theme park. SunCal plans were to build 1,500 condominiums with 15% of the units set aside for below the market rate rental apartments. Since housing in Anaheim, California [the home to the Disney theme park] was expensive, many of Disney’s 20,000 employees couldn’t afford to live there.
The average price of a house in the vicinity was more than $600,000 and a rental of a one bedroom apartment was $1400 a month.
Keeping in mind custodians at the park earned an average of $1916 a month so that would leave them with only about $500 of their salary barely enough to sustain them for the rest of the month! Also, keep in mind that restaurant attendants earn around $1166 a month, so a rental is out of the question, which brings us to the fact that only about 18% of the resort employees are able to afford living in the area. The 16400 employees are left to commute long distances by car or bus to get to work.
Furthermore, when SunCal wanted to proceed with its plans it had to get permission from the City Council, because its plans for the development were in the resort area. It wasn’t clear if SunCal was going to succeed so it roused a lot of advocates from the employees at Disney as well as affordable housing advocates as well as by other individuals and groups who supported the prospect of reducing long commutes, thus reducing air pollution. However, Disney was in the way. It greatly opposed the plan for several reasons. One of which was that the resort district across the street was just that: a resort district.
In the early 1900’s , the city of Anaheim designated 2 square miles across the street from the theme park as a special resort district. The resort area, which was 5% of the city’s area only, produced more than half of its tax revenue by 2007. Therefore the area and any development new or old within it were restricted to serve only tourist needs. This meant tourism related development such as hotels and restaurants, Disney argued, and not affordable housing. Disney argued that it wasn’t against the issue of providing the employees with affordable housing, but it is against it being in the area that is allocated for tourism.
Having SunCal go ahead with its plan will affect the area and its theme park subsequently because it will take land away from being allocated to tourists needs [will be explained more fully in Q3]. “It’s not an either/or” Disney argued “Anaheim has to address the issue of affordable housing but it also had to protect the resort area! ” The two sides quickly formed their own advocates. SunCal advocates formed the Coalition to Defend and Protect Anaheim declaring that “these new homes would enable many families to live near their places of work and thereby reduce commuter congestion on freeways”.
Disney’s advocates on the other hand formed Save our Anaheim Resort District to protect the resort area from non-tourism projects. The City Council was split on the issue, to say the least. The five person council has to decide if it will give permissions for SunCal to proceed to build its development plan in a site located strictly for tourism projects, only because this will solve the affordable housing dilemma, or stick with Disney’s claim that the site was made from the start for tourism projects and disregarding the fact now will only hurt the area and the businesses in it as well the theme park of course.
Q2 The relevant market stakeholders are Disney’s stockholders, creditors, suppliers, customers, employees and distributors as well as other resort based owners located within the resort district. The nonmarket stakeholders are the community, government, media, and non-governmental organizations. Q3 The stockholders of Disney will be affected adversely by SunCal plans because it might slow down the flow of tourists to the area and thus affect the theme park’s profits and the stockholders profits, dividends subsequently.
They are opposed to SunCal’s proposal solely because the area should be targeted to bring about as much tourists to the area and thus enlarge the theme park’s tourist segment and bring out more potential profit and capital appreciation for the stockholders. The same can be said about the resort based business owners, because they may depend on Disney which is the main attraction for the continuation of their businesses.
Fewer developments for tourists, less tourists, lesser incentives for them to come to the area and as such will affect Disney adversely which in return will affect the businesses that depend on it for tourist attractions. Moreover, this will in turn affect the creditors, suppliers, and distributers of Disney. The amount of credit needed to run the theme park will be reduced heavily since there will be fewer tourists to attend to. Fewer supplies will be needed if tourism will lessen in the area and as such there will not be as many supplies being distributed.
Therefore, the creditors, suppliers, and distributors are all against SunCal’s proposal because it might affect the success of their business if Disney’s attraction is compromised. This can even affect the employees [at Disney and at the various businesses in the resort area] because they will be impacted in various ways including reduced hours or layoffs and reduced salaries, if tourism in the vicinity decreases. The community, government, media and non- governmental organizations can be all entities that are split on the issue.
The community for example, is split between providing a solution for the affordable housing issue [therefore in favor of the proposal], or preserving the area that brings prosperity to a lot of businesses [against the proposal]. The same can be said about the government, to be specific, the chamber of commerce is against SunCal’s proposal because it might lesson the profits that the city reaps [the resort area produces more than half of its tax revenue] and the other side of the government wishes to appease its community and wants Disney to take responsibility for its employees.
The non-governmental organizations such as the activists we’ve seen in the first scene of the case and the unions that represent Disney’s affected employees from the long communes’ are in favor of SunCal’s plan. However there might be other unions and activists against the plans, even though they are not mentioned specifically in the case text. Q4 The relevant market stakeholders are Disney’s stockholders, creditors, suppliers, customers, employees and distributors as well as other resort based owners located within the resort district.
They all have legal power, in which they can bring suit against a company for damages, based on harm caused by the firm. The stockholders in Disney have Voting Power, of which they can exercise their voting rights based on share ownership. They also have the power to inspect the company’s books and records. The creditors, suppliers and distributors, customers and employees have Economic Power. The creditors may call in loans if payments are not made.
Suppliers and distributors may supply or distribute to competitors, or even refuse to meet orders if conditions in the contract are breached. Customers can imitate the suppliers and distributors in which they can switch loyalties and purchase their goods from competitors, or even go to extremes such as boycotting the goods and products if deemed unsatisfactory. The employees can from unions to bargain for their wants, they can even refuse to work or take action and perform strikes. They may even go public and influence the media to adopt their issues.