Disney Settles Class Action Lawsuit Claiming Magic Key Annual Pass Deceived Consumers

The Walt Disney Company has settled a $5 million class action lawsuit brought by fans who claimed the Magic Key annual pass for Disneyland didn’t grant them unlimited access to the park as promised.

The federal suit, which was initiated by a Disney fan named Jenale Nielsen, alleged Disney deceived consumers who purchased the Magic Key — the most expensive pass — into thinking they would have unlimited access to the Anaheim, California park.

A family poses for a picture inside the Magic Key Starcade Experience at Disneyland in Anaheim, CA, on Wednesday, September 1, 2021.  (Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images)

But, they claimed, in reality, many days were blocked out because daily ticket sales were given priority. The lawsuit accused Disney of favoring daily ticket sales over reservations made by Magic Key holders.

Both sides have until the end of next month to figure out the details fof the preliminary agreement before it is approved by the court, according to the Disney site Daps Magic.

Settlement Reached for Disney's Magic Key Lawsuit https://t.co/yofnINkSBk #Disney #MagicKey #MagicKeyLawsuit pic.twitter.com/EaP3RdufHk

— Daps Magic (@DAPs_Magic) July 25, 2023

   Settlement Reached for Disney's Magic Key Lawsuit https://t.co/yofnINkSBk #Disney #MagicKey #MagicKeyLawsuit pic.twitter.com/EaP3RdufHk

   — Daps Magic (@DAPs_Magic) July 25, 2023

Jenale Nielsen filed the original suit in 2021 after purchasing a  $1,399 Dream Key pass — the most expensive Magic Key tier.

Nielsen claimed she believed she could visit Disneyland any day she wanted, because Disney promoted the Dream Key as having “no block-out dates.”  But she soon discovered that she couldn’t get in for most of the month of November, including every weekend, according to the lawsuit.

Originally Posted By nightstalker:
Watched a discussion about the competing state and federal cases with Fl v Disney.  The experts say Disney will lose…..unless a few mean words from DeSantis are the decider…not likely.  Reedy Creek agreement will be re-done.
There’s some bond issuance items that border on security fraud.

Originally Posted By Stretchman:
This is asinine. These people need to fix this. We have two sides battling it out for control over a theme park agenda designed for children. We're 50-50 on whose agenda the children should be exposed to.

Now for a short course in economics. We just spent massive bucks building a railroad that goes from south Florida to Disney. A major part of our revenue is tourism and we are looking at being in the unique position of being able to sell people worldwide vacation packages that would include overnight stays in south Florida, a cruise, and a chance to ride a high speed rail system to visit Disney plus all the world famous attractions that south Florida has to offer. For a lot of people, it's our bread and butter. We need that money.

Personally, I give two shits about anyone else's personal agenda. These people need to pull their heads out of their asses and fix this. We have been bleeding cash since this bullshit started. I really don't think the kids care either way, but parents sure do. There's a time and place for everything, and Disney, das not it. Period.

Think of the global ramifications. For us, for them, and for those companies that depend on the cruise ships for their income as well.

Im just having a hard time picturing some kid telling their parents to skip Disney cause it's not woke enough.
https://www.youtube.com/watch?v=4IAj7UxMqiU

Originally Posted By Bunnysriflestock:
Anybody read anything about Lucasfilm being audited by Disney? Some Star wars sites are saying Kennedy is on leave and Disney is auditing Lucasfilm because Kennedy shifted money to fund an unapproved project.

LucasFilm

Originally Posted By IwasBrian:
Only hurts hard working Americans. The foreign investors enjoy when Americans suffer.

Originally Posted By FlashMan-7k:
https://i.postimg.cc/DfWcygRH/disney-tickets.jpg

https://i.postimg.cc/wB7kyQ71/dis-tickets-2.jpg

From here:

https://www.youtube.com/watch?v=uI_ul3gRrCM

According to the YT'er it's 2 years that rise of the resistance has been in B-mode (less immersive, less things working, etc.) for a lot time (during those 2 years).  DW has just not fixed it.

Disney Streaming Subs Miss, As Company Surprises With Huge Price Hike, Slashes CapEx Outlook
Tyler Durden's Photo
by Tyler Durden
Wednesday, Aug 09, 2023 - 09:24 PM

It's going from bad to worse for Hollywood woke icon Disney, and embattled CEO Bob Iger, whose stock is unchanged over the past decade and today's earnings release won't help: while the company reported earnings which beat expectations (just barely) amid a massive cost-cutting effort, even as total revenue and streaming subs missed, despite continued - for now - strength at Disney parks where one can enter in exchange for at least one kidney).

Here are the Q3 highlights:

   Adjusted EPS $1.03 vs. $1.09 y/y, beating estimates of 99c (the company recorded $2.44b charge in 3Q related to the removal of content from DTC services and termination of certain third party license agreements)
   Revenue $22.33 billion, +3.8% y/y, missing estimates of $22.51 billion
       Media and entertainment distribution revenue $14.00 billion, -0.8% y/y, missing estimates of $14.36 billion
       Parks, experiences and products revenue $8.33 billion, +13% y/y, beating estimates of $8.25 billion
   Total segment operating income $3.56 billion, -0.2% y/y, beating estimates of $3.4 billion
       Media and entertainment distribution operating income $1.13 billion, -18% y/y, beating estimates of $1.05 billion
       Parks, experiences and products operating income $2.43 billion, +11% y/y, beating estimates of $2.39 billion
   Direct-to-consumer operating loss $512m, missing estimates of loss $777.7m
   Disney+ subscribers 146.1 million, missing estimates of 154.8 million
       ESPN+ subscribers 25.2 million, beating estimates of 25.8 million
       Hulu & Live TV subscribers 4.30 million, missing estimates of 4.40 million
       Total Hulu subscribers 48.3 million, missing estimates of 48.7 million
   ESPN+ ARPU $5.45, missing estimates of $5.69
   Hulu SVOD ARPU $12.39, beating estimates of $12.25
   Hulu Live TV + SVOD ARPU $91.80, missing estimates of $92.52

Commenting on the results, Bob Iger said that "In the eight months since my return, these important changes are creating a more cost-effective, coordinated, and streamlined approach to our operations that has put us on track to exceed our initial goal of $5.5 billion in savings as well as improved our direct-to-consumer operating income by roughly $1 billion in just three quarters."

Despite the revenue miss, the company beat earnings after the world’s largest entertainment company launched an extensive cost-cutting effort after CEO Bob Iger returned to run the company in November. That included 7,000 job cuts and other reductions in spending.

Looking at the key driver of DIS growth, streaming, there was good and bad news:

   The good news is that Disney’s online video operation cut its loss to $512 million from more than $1 billion a year ago, an improvement to the company's recent guidance that the direct-to-consumer business would lose more than $750 million in the quarter.
   The bad news is that Disney+ streaming subs tumbled 7.4% to 146.1 million from the previous three months, missing the 154.8 million consensus analysts had expected. While nearly all of that shortfall was borne by the company’s Disney+ Hotstar in Asia where it lost almost 25% of its customers after Disney failed to renew streaming rights for popular cricket games in the Indian Premier League, domestic Disney+ subs also dropped: subs in the U.S. and Canada dropped to 46 million subscribers, from 46.3 million in the previous quarter; marked the second time ever that the company saw Disney+ lose North American subscribers.

The company’s parks business generated $8.33 billion in revenue, a 13% increase from a year earlier. The company said growth at its international parks offset lower results domestically.

Parks and streaming aside, Disney continues to be a melting ice cube and reported a 23% decline in profit, to $1.89 billion, in traditional TV, underscoring the troubles confronting that division; the number was $100 million less than what analysts had expected. The business, which includes channels such as ABC and ESPN, has been buffeted by falling cable subscribers, lower broadcast advertising sales and higher programming costs for sports.

Once a reliable engine of profit for Disney, linear TV has seen its operating income plunge in recent years as more consumers cut the cable cord and switch to streaming video as their primary source of home entertainment.

Adding insult to injury, management is also now dealing with strikes by the Writers Guild of America and Screen Actors Guild that have effectively shut down production of new TV shows and movies across the entire media industry.

So realizing that he has to wow the street with something, or else risk losing his job again, for the second time in about a year, Iger announced a round of staggering price increases to its various streaming products, raising the cost of the ad-free versions of Disney+ and Hulu by as much as 27% each.

The company also raised prices on its Hulu Live television packages and announced the launch of a new bundle known as the Duo Premium, which pairs Disney+ and Hulu without ads for $19.99 a month. Previously, the company had offered both services as stand-alone products, or bundled with ESPN+ for the same price.

Wednesday’s price increases, which take effect in October, mean that the monthly cost of the ad-free stand-alone version of Disney+ has doubled to $13.99 from its 2019 introductory price of $6.99. The price of Disney’s ad-free Hulu service will rise to $17.99 from $14.99, making it more expensive than the most popular ad-free version of rival Netflix.

The changes come as Disney struggles to pivot from its old model of distributing content in movie theaters, on network and cable television and through the sale of physical media to a streaming-first paradigm.

Since launching Disney+ in late 2019, the company has lost more than $10 billion in its direct-to-consumer segment, which also includes Hulu and ESPN+. And for much of the past year, Disney’s shares have traded below $100 as investors have grown impatient with media companies such as Disney that have spent heavily to acquire subscribers without giving priority to profit.

In March, Iger said that in its “zeal to grow global subs,” the company had underpriced its streaming services and hinted that higher prices were coming. In December, after the company launched its first-ever ad-supported tier for Disney+ and raised prices on the ad-free version by $3, the low level of cancellations indicated that there was room to raise prices further without reducing demand, Iger said.

Disney is also in the throes of major management upheaval: Iger signaled in a July interview with CNBC that TV networks including ABC, Freeform and FX, which contributed about half of Disney’s operating income before the pandemic, “may not be core” to the company any longer. He’s also seeking to sell a stake in the ESPN sports business to a partner that can help accelerate the network’s transition to streaming. Iger recently hired former lieutenants Kevin Mayer and Tom Staggs as consultants to advise on that effort.

On Tuesday, ESPN announced a long-term agreement with casino operator Penn Entertainment Inc. to license its brand for sports betting. Penn will make cash payments totaling $1.5 billion over the 10-year term and grant ESPN $500 million of warrants to purchase Penn shares.

While the stock was sharply lower in after-hours trading on the revenue and subscriber miss, and not even news of the surging subscriber costs did anything to move the stock, what did send DIS stock sharply higher after hours was the flashing red Bloomberg headline from the conference call that Disney would slash its capex by $5 billion compared to prior forecast. The news of the company's admission that it sees far fewer growth opportunities was enough to push the stock as much as 6% higher...

... before it resumed selling once again.

Originally Posted By FlashMan-7k:

No, the title of the video isn't clickbait, for once. Things are starting to get clearer now.

https://www.youtube.com/watch?v=3hHNz7gp5O8

TL : DW ... In the 8-9 earnings call, disney said they had 10+bn cash on hand (this is up from the calculated 200million they had earlier this year). This will be due to the sales and firings (I believe the have fired 7,000+ this year?) and closings / cost cutting, plus the parks will have chipped in a bit more over last year or so since they were all allowed to open again post kung-flu virus. Basically, disney corp is looking to cut everything they can.

So they have 10+bn on hand cash. They also said (don't miss this) they have about 10bn in credit available to them. Yes ... credit.  They admitted what we knew - that the hulu put would cost 9.2-3bn (everyone expects that will be the minimum) I believe january of next year.

In personal terms, this is someone admitting they have sold everything they can, admitting their core assets aren't earning, and they've raised *just* enough to barely (but not really, if you consider living costs) cover a large scheduled bill.

The hulu put could leave them with a bill running up to 20 (or worse, 30) billion dollars. Effectively taking every bit of their cash, and every bit of credit they can muster right now.

At best, "only" flat cash broke. At worst, cash broke, credit bills out the nose, and still having to scramble to find a way to pay the bill.

----------------

About the disney selling to apple and apple bailing out disney rumors ... iger simply mentioned that it would be really hard to do. He effectively punted on that one.  IF ... and it's a HUGE if ... that were to happen, I can't see the regulators allowing apple to just gobble up the whole of disney, and it would take *years* to get done.



Disney needs to do really well before the hulu put. REALLY well. I don't think they have anything that can do that for them.  They may legitimately be in trouble.  I do not think that even AI generated writing and content could do well for them, even in a pie in the sky scenario, because the people prompting the AI will be the same people who have been choosing to direct the writers to write the recent content that has flopped, horribly.

If disney starts buying up foreign content en-masse, the sellers of that content are going to pick up on what's going on, and jack the prices ... and again, the people chosing what content to buy are going to be the ones that disney has right now.

Originally Posted By FlashMan-7k:
TL : DW ... In the 8-9 earnings call, disney said they had 10+bn cash on hand (this is up from the calculated 200million they had earlier this year).

Originally Posted By Actiondiver:
I know tons of parents that gleefully take their kids to their parks to be groomed

I hope Disney goes under