Originally created 07/11/98

Texas education board votes to dump all stock in Disney



AUSTIN, Texas -- The state board of education voted Friday to sell its Walt Disney Co. stock after complaints about sex and violence in films produced by Disney's Miramax Films, including Pulp Fiction.

The vote means $43 million in Disney stock, which is less than one-tenth of a percent of Disney's shares, will be shed from the $17.65 billion Permanent School Fund.

Board Chairman Jack Christie, a Houston Republican, had said he hoped a vote to divest "sends a message to Miramax ... that the public in general has had enough of exposing children to the violence and explicitness in these movies."

The action comes after the American Family Association of Texas, which is involved in a Disney boycott, sent board members a videotape of Miramax film excerpts, including scenes from Pulp Fiction and Chasing Amy.

In addition, members of the Southern Baptist Convention have been boycotting Disney for a year because of its practice of extending health insurance to same-sex partners of employees and of having "Gay Days" at its amusement parks.

Divestiture supporters say such films could make Disney stock less attractive to investors, hurting it as an investment.

Disney has tried to keep its name off films that are intended only for adults, reserving the Disney brand name for products it believes are suitable for all ages.

In response to the Texas board's selloff, Disney spokesman Claudia Peters said: "Investors should make their own decisions based on their own rationales and goals for their investment portfolios. We don't comment on individual investment strategies."

The Board of Education voted 8-4 to dump the stock. Two of the 15 board members abstained and one was absent.

Divestiture opponents cited a report that since buying Disney shares two years ago, the total return to the school fund has been 108 percent. Disney shares were at $37.87 1/2 , up 87 1/2 cents, in afternoon trading Friday on the New York Stock Exchange.

"The record is quite clear that Disney is a very, very fine productive stock for the public school fund," said board member Will Davis of Austin, a Democrat who tried to stop the issue in a board committee Thursday.

The school trust fund has other investments that also could raise objections, including companies involved in alcohol, gambling and adult-oriented entertainment, divestiture opponents say.

Other investments have been accused of human rights violations, pollution, unfair employment or illegal political contributions, or have engaged in animal testing, opponents say. Investments in such companies total $846.7 million, according to the Texas Education Agency.

"It's a very dangerous precedent to pick and choose on morality," said Richard Levy, a board member of the Texas Freedom Network, which monitors activities of the religious right.

Last year, a fund manager sold a $3.5 million investment in MCA parent Seagram Co. after a state lawmaker denounced "filth" on MCA records. Earlier, tobacco stocks were sold.

Mr. Davis, who heads the board's Permanent School Fund committee, said this was the first time the board voted on such a divestiture.