Oh, look what we have here! A lawsuit by Stourbridge Investments, accusing Disney’s finest leaders, including the former CEO Bob Chapek, of indulging in a bit of creative accounting. According to this lawsuit, it appears that Disney’s top brass engaged in a subtle game of hide-and-seek, trying to keep those “staggering costs” of Disney+ under wraps while promising a profitable wonderland by 2024. Some companies are worth melting for!
The lawsuit, presented like a grand theatrical performance on August 23 in Delaware federal court, made quite the entrance, just a day before Disney’s shares decided to take a leisurely stroll down a nine-year low at $82.47 per share.
Also, the lawsuit cast its net wider, trapping former CEO Bob Iger, ex-CFO Christine McCarthy, and even Kareem Daniels.
But wait, there’s more! The lawsuit insists that a “fraudulent scheme” was in play to keep Disney+’s losses well hidden from prying eyes, all while painting a picture of sustainable subscriber growth and achievable 2024 targets. Bravo for the creative storytelling!
Hold on, it gets better. The bundled offering, that little discounted bundle of joy, apparently accounted for a whopping 40% of domestic subscribers. Just to teach you a little technical term, it decreases ARPU, which means average revenue per user.
Even after all this Bob Chapek heroically plunged ahead with a grand reorganization of Disney’s media and entertainment operations.
When Disney is already facing public wrath for its cruel treatment to the workers at lower strata, it certainly adds more to their trouble.
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