Last year, when Disney CEO Bob Chapek was running the company, there was a number of Disney+ Original shows that were suddenly no longer heading straight to Disney+ and would also be debuting on the Disney Channel, leading to questions over some creative accountancy to make the streaming division look stronger on paper.  A number of shows, including “The Mysterious Benedict Society” and “Doogie Kamealoha MD” were listed as shows that were shifted off the Disney+ side, onto the Disney channel.

Shortly after this news came out, Disney replaced Bob Chapek with Bob Iger, resulting in a major change within the company to focus on profits, and a massive reorganisation happened.  And once Chapek was gone, it was revealed by the WSJ, that Disney’s CFO Christine McCarthy wasn’t happy with the situation:

Disney is moving some shows that were supposed to be Disney+ originals and air them first on other networks including the Disney Channel, people familiar with the matter said. By doing so, the costs of production and marketing of the shows—which included mystery show “The Mysterious Benedict Society” and medical drama “Doogie Kameāloha, M.D.”—would be shifted away from the streaming service, making its financial performance look better, they said. Ms. McCarthy was concerned about this strategy, the people said.

But now, this situation has resulted in a lawsuit, as some investors have filed a class action on May 12th in the US District Court for the Central District of California by a pension fund, which lists Disney CEO Bob Chapek, as they believe he facilitated a scheme to hide steep costs associated with Disney+.  The lawsuit also names current Disney CFO Christine McCarthy.

According to Bloomberg Law, Disney “repeatedly misled investors about the success of the Disney+ platform by concealing the true costs of the platform, concealing the expense and difficulty of maintaining robust Disney+ subscriber growth, and claiming that the platform was on track to achieve profitability” by the end of the fiscal year 2024.

In the lawsuit, according to the plaintiff, the Local 272 Labor-Management Pension Fund, they have said that executives allegedly “debuted content created for Disney+ initially on a legacy platform in order to shift marketing and production costs onto that platform,”

Chapek’s reorganization of Disney, which was called the Disney Media and Entertainment Distribution,  “represented a dramatic departure from Disney’s historical reporting structure” and caused controversy within the company because it redirected power and control from creative content executives to Chapek’s lieutenant Kareem Daniel, the pension fund alleges.  Since Bob Iger has returned, Kareem Daniel was quickly removed, and the DMED division was disbanded.

The pension fund seeks damages and injunctive relief on its securities fraud claims.


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Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Twitter: Facebook:

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