Texas Board of Education votes to sell Disney stock
Decision comes after lobbying by religious conservativesJuly 10, 1998
Web posted at: 11:33 p.m. EDT (0333 GMT)
AUSTIN, Texas (CNN) -- Despite more than doubling its money in the last two years, the Texas Board of Education voted Friday to sell $46.4 million worth of stock it holds in the Walt Disney Co. because of the content of the entertainment giant's products.
By an 8-to-4 vote that split down party lines, the Republican-dominated board overruled the advice of its own investment managers and ordered its 1.2 million shares of Disney sold.
The decision came after a campaign by religious conservatives, including the American Family Association of Texas, to convince the board to divest itself of holdings in the company.
"[Disney is] not Mickey Mouse and Donald Duck anymore. It's blowing people's heads off," said board member Richard Neill, who described Disney fare as "garbage."
Disney stock shakes off decision
The decision is expected to have little financial effect on Disney, which has a stock market capitalization of more than $25 billion. The company's stock, which split 3-for-1 on Friday, shook off the news and rose more than $1 a share.
But some religious conservatives hailed the Texas decision as the first of many to come. Stephanie Cecil of the Eagle Forum said it put Texas "in front of the parade."
"The people are tired of sex, violence, mayhem and religious bigotry [in movies]," Cecil said.
Board Chairman Jack Christie told reporters he was convinced to sell the stock after he was shown clips from "Pulp Fiction," a 1994 movie starring John Travolta that was produced by Disney's Miramax Films unit.
The movie, nominated for seven Oscars, included scenes of drug use, murder and sadomasochism. Ironically, the board originally invested in Disney stock after that film was released.
The American Family Association also sent board members clips of the Disney-produced movie "Chasing Amy," which featured a lesbian character and frank discussions of sex.
Divestiture opponent calls decision 'hypocrisy'
But board member Alma Allen of Houston, one of four Democrats who voted against the measure, called it "political hypocrisy."
"I will not be voting to divest. And in fact, two weeks from today, I will be at Disneyland. That's where my grandchildren want to go, and I thought I'd take all five," she said.
While Disney officials would not comment on individual investment decisions, spokeswoman Claudia Peters noted that products geared toward adults are produced under separate brand names, such as Miramax, rather than the Disney name, which has long been a symbol of family fare.
"[The company] produces more family entertainment than any other company in the world, and any products marked with the Disney brand name are always suitable for all ages," she said.
Peters also noted that in the last 10 years, Miramax films have received 110 Academy Award nominations and taken home 30 Oscars.
Board also invests in breweries, casinos
The Texas Board of Education controls a $17.6 billion fund, known as the Permanent School Fund, which is used to build public schools. The fund is invested in an array of companies that, among other things, sell beer, manage gambling casinos and operate adult-oriented cable channels.
But Disney, long known for its wholesome cartoons and family movies, has recently become a particular target for religious conservatives. Last year, the Southern Baptist Convention voted to boycott the company, including its movies, theme parks and the Disney-owned ABC television network.
Anti-Disney activists complain that its entertainment products feature too much sex and violence. They also object to portrayals of gay and lesbian characters, especially the ABC sitcom "Ellen," which starred openly lesbian comedian Ellen DeGeneres, and the movie "Priest," in which a gay Catholic priest has a relationship with another man.
Disney's critics also have objected to the company's decision to extend benefits to the partners of its gay and lesbian employees and to allow organizers to put on an annual "Gay Day" at Walt Disney World, though that event is not officially sponsored by Disney.
The school fund bought $21 million of Disney stock in 1996, which has risen in value to $46.4 million. The board's investment managers recommended against divestiture on the grounds that Disney stock was an investment that would likely rise in value in the future.
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