Investors take issue with former CEO Bob Chapek's optimism about Disney+'s growth and expected profitability.
The suit details Disney’s pivot to prioritizing streaming amid the pandemic. While most of the company’s businesses suffered as its theme parks, resorts and cruise lines were shuttered and movie theaters were forced to close, subscriptions to Disney+ rapidly took off. Against this backdrop, Chapek decided to “go all in” on the platform, announcing a major reorganization of the company’s media and entertainment operations.
“By doing so, a significant portion of the marketing and production costs of the shows were shifted away from Disney+ and on to the legacy platform,” reads the complaint. Chapek additionally discussed how the company’s new distribution and commercialization team empowers creative teams to “make the high-quality branded entertainment they believe will resonate with audiences.” The slides that accompanied the presentation reiterated the company’s estimate Disney+ would be profitable by the end of 2024.
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