The conflict between Disney and Florida began to escalate in March 2022 when Disney's then-CEO Bob Chapek publicly criticized a controversial bill known as "Don't Say Gay," which restricts certain forms of instruction regarding sexual orientation and gender identity in classrooms. In response, Governor Ron DeSantis initiated efforts to terminate Disney's longstanding special privileges in Central Florida, leading to heightened tensions between the two parties.

The settlement, approved in a meeting on Wednesday, entails several key provisions. Firstly, Disney will withdraw its lawsuit against the special tax district, which alleged that the oversight board withheld files in violation of Florida law. This move will pave the way for negotiations on a new development deal, likely favorable to Disney's interests in the area.

Additionally, both Disney and the state have agreed to drop their respective lawsuits filed against each other at the statewide level. Instead, they have committed to resolving their differences outside the courtroom, without admitting any fault or liability.

Governor DeSantis expressed satisfaction with the settlement, framing it as a mutual victory for Florida and Disney. He emphasized the potential benefits for Disney's competitiveness, particularly against neighboring Universal Orlando, which recently announced an expansion project.

Disney's president, Jeff Vahle, welcomed the resolution, stating that the company is pleased to put an end to all litigation related to the dispute. Charbel Barakat, vice chairman of the Central Florida Tourism Oversight District, also expressed optimism about the agreement, highlighting the opportunity for collaborative efforts to enhance the region's attractions and governance.

The settlement brings closure to a contentious chapter for both Disney and Florida, ending a distraction for the company and garnering criticism for Governor DeSantis. The resolution comes just ahead of another significant battle for Disney as billionaire activist Nelson Peltz seeks to secure two board seats at the company's upcoming shareholder meeting.