Conservatives Get Boost In Disney Stock Dump

Family-values conservatives on Friday seized unprecedented ground in America's morals debate, as the Texas State School Board carried the Southern Baptist Convention's two-year boycott of the Walt Disney Company into the halls of government.

The school board's decision to get rid of $46.4 million in Disney stock marks an important milestone for religious conservatives and the family-values movement. Based largely on board members' objections to content in films released by Miramax, a Disney subsidiary, the decision represents one of the biggest triumphs in the movement's ongoing efforts to impress its values agenda on politics.

But it is also sparking a nationwide debate on the merits and perils of using school money as a means to send a message to corporations, as religious watchdog organizations worry that the divestiture could spark a wave of sanctions against companies deemed to be on the wrong side of litmus-test issues.

The two sides of the issue

"[The divestiture is] a level that's more sophisticated and more serious than anything before," says Elliot Mincberg, legal director for The People for the American Way, a liberal Washington-based organization that monitors the conservative movement. "What they're doing is essentially having the government punish a company that's not breaking the law because of the speech [in which] the company engages. That, to me, sounds a lot like censorship."

To supporters of the decision, however, the move was a necessary attempt to draw a moral line in the sand. Board member David Bradley says Texas educators have put the entertainment industry on notice that school funds will not be used to promote sex, violence, and antifamily violence among teens.

"As a parent, I react in horror when my kids are watching TV and I have to lunge for the remote control," Mr. Bradley says. "I hope we've sent a message. If Texas is taking a stand, this must be big - I think this issue has legs."

Why Disney?

Disney has long been targeted as anti-family by the Southern Baptist Convention and the conservative American Family Association for the company's support of gay rights and the explicit, adult-oriented themes of many films produced by Miramax. Those groups and others had strong praise for the school board.

"All I can say is, 'bravo,' " says Connie Mackey, executive director of the Campaign for Working Families, the nation's largest conservative political-action committee, created in 1997 by conservative activist Gary Bauer. "I'm almost shocked, because school boards are not known to do this kind of thing."

The Republican-majority Texas school board voted 8-to-4 to drop the Disney stock from the state's $17.7 billion Permanent School Fund. The fund pays for Texas children's textbooks.

It cited the stock's 17 percent downturn over the past two months and the possible future impact of the boycott as financial arguments for the sell-off - despite unanimous "keeper" ratings from Goldman Sachs, Smith Barney, and 18 other leading investment analysts.

But "there was also a moral, or social, aspect to it," said Mr. Bradley, one of five conservative Republicans to win seats on the board since 1993, shifting the balance of power from Democrats.

By itself, the stock-drop amounts to a small pebble among the voluminous, often-bitter volleys hurled by social liberals and conservatives across a widening values gulf in America. The 1,218,000 Disney shares - from which the profits will be reinvested - make up roughly 0.3 percent of the Permanent School Fund, and only one-quarter of an average day's trading for the $72.7 billion entertainment conglomerate.

But for some observers, the board's action seems somewhat odd. State Rep. Harryette Ehrhardt (D), who petitioned the board not to dump Disney, notes that the Permanent School Fund also includes holdings in Time Warner Inc. (owner of Playboy Channel) and TCI Satellite Entertainment (which distributes Miramax films on HBO and Cinemax). Neither company was targeted for divestiture, however, a fact Representative Ehrhardt attributes to the work of the American Family Association.

Based in Tupelo, Miss., the Christian values organization distributed a videotape to board members that had excerpts from Miramax films such as "Pulp Fiction" and "Trainspotting." But Ehrhardt says the group's overriding objection to Disney stems from the company's practice of extending benefits to the partners of gay and lesbian employees. "They've been out to get Disney for a long time," she says.

Other divestitures

Selling holdings on moral grounds is not without precedent in the history of the Permanent School Fund. In the 1980s, the board divested all stocks with ties to South Africa to protest that country's apartheid system, and it sold all tobacco stocks. But the Disney sell-off marks the first time the practice was directed at a specific company. Still, Disney shares closed Friday at $38.125, up $1.125.

Along with more controversial titles, Miramax has also produced such critically acclaimed films as "The English Patient" and "Good Will Hunting," and has garnered 30 Academy Awards.

Disney spokeswoman Claudia Peters says the company does not comment on the investment decisions of shareholders, but she adds, "Film subsidiaries of Disney are set up under other names. Any products marked Disney are suitable for all ages."