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What Disney Investors Need To Know About #BoycottMulan

Walt Disney Co (NYSE: DIS) shares were trading higher on Tuesday despite pushback against the shooting locale for some scenes in the company’s new live action remake of “Mulan.”

· 09/08/2020 14:57

Walt Disney Co (NYSE:DIS) shares were trading higher on Tuesday despite pushback against the shooting locale for some scenes in the company’s new live action remake of “Mulan.”

The 'Mulan' Controversy: “Mulan” launched on Disney+ over the weekend and drove a 68% weekly increase in mobile downloads, according to TechCrunch.

The movie also reportedly drove a 193% surge in Disney's in-app spending for the week.

Despite the initial indications that “Mulan” was a financial success, Disney is in hot water over the fact that the movie’s credits revealed that some scenes were shot in Xinjiang, a region of China in which the government has been accused of engaging in genocide against indigenous minority groups.

It's estimated that China may be holding more than 1 million prisoners, many of whom are Uighur Muslims, in more than a dozen “re-education camps.”

The Allegations: The Chinese Communist Party has reportedly barred foreign journalists, human rights organizations and foreign government officials from accessing Xinjiang, according to Axios.

In the "Mulan" credits, Disney acknowledged both the Chinese Communist Party's propaganda commission in Xinjiang and a branch of the regional Xinjiang public security bureau that has been under sanctions from the U.S. government since July.

In addition to the forced political indoctrination, Uighur Muslims in the region have also reportedly been subjected to forced labor and forced sterilization. 

In the wake of the latest "Mulan" controversy, China’s foreign ministry spokesman Zhao Lijian denied the existence of re-education camps and said facilities in the region are vocational and educational institutions.

The latest boycott efforts aren’t the first time Disney has run into trouble with “Mulan.” Last August, Mulan's leading actress Yifei Liu pledged her support for Hong Kong police during democratic protests in Hong Kong.

Disney Silent: Disney has not commented publicly on the issue or trending social media hashtags #BoycottMulan and #BanMulan. When asked about Liu’s comments back in February, Disney Studios chairman Alan Horn said the company tries to be “non-political, apolitical when it comes to all this stuff.”

“My feeling is, free speech is an important component of society, certainly, and folks ought to be able to say what they want to say,” he said at the time. 

Human rights activists have accused Disney of bending to the will of the Chinese Communist Party — and the company certainly has a lot to gain from staying on China’s good side.

In 2019, Disney reported $7.79 billion in revenue from the Asia Pacific region, up roughly 40% from 2018 levels.

DIS Price Action: Disney shares were trading 1.57% higher at $134.06 at the time of publication Tuesday. 

Benzinga’s Take: The early Disney+ download and spending estimates suggest boycott efforts may not have paid off in terms of significantly impacting Disney’s bottom line.

Yet media coverage of the “Mulan” controversy has certainly raised awareness of potential human rights violations in the Xinjiang region.

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Photo courtesy of Disney.