Disney's Trap

Disney's (NYSE: DIS) handling of its dispute with filmmaker Michael Moore is just plain goofy.

The company has reportedly decided to block its Miramax film unit from releasing a documentary by Moore, who won an Oscar in 2002 for Bowling for Columbine. The new film, Fahrenheit 911, is said to be a controversial (surprise!) look at the September 11 attacks and the Bush family's relationship with prominent Saudis.

Already the accusations are flying. According to various sources, Ari Emmanuel, Moore's agent, claims that Disney CEO Michael Eisner expressed concern that the movie could threaten Disney's tax breaks for its theme park in Florida, where the president's brother, Jeb Bush, is governor. Disney, meanwhile, asserts that it told Moore a year ago that Miramax would not distribute the film, and that he is now pulling a publicity stunt by making an issue of the decision.

Congratulations on walking into a giant mouse trap, Disney. In such a politically charged climate, it's no surprise that media outlets have pounced on the story. Moore, who is well known for his outspoken positions, is publicly crying censorship.

Disney, of course, is under no obligation to allow distribution, but it should have come up with a better reason for its choice. Rather than insulate the company from controversy, its decision to block the film's release simply because it may alienate some customers places it right in the middle of a political firestorm. If Disney digs in its heels, this debate will probably rage through November and beyond, generating plenty of the kind of buzz that the firm just doesn't need.

The rhetoric over the power of giant media conglomerates had already reached a fever pitch before this episode. If the House of Mouse is naive enough to believe that this situation won't create a backlash, it's living in Fantasyland.

What's your opinion? Does Michael Moore come out the big winner here thanks to all the free publicity? Will Eisner ever catch a break? Talk about it with other Fools on our Disney discussion board.

Fool contributor Brian Gorman does not own shares of any of the companies mentioned.