Bob Chapek’s era as the CEO of The Walt Disney Company has been over now for several months. But his legacy, for better or worse, is far from over. Chapek, along with his replacement current CEO Bob Iger, have both been named in a brand new lawsuit being brought by a Disney stockholder over the way Disney had previously been reporting profits and losses regarding Disney+.
Following the somewhat surprising exit of Bob Chapek, it had been reported that one of the reasons that the Disney board had made a move to replace the CEO was a potentially questionable decision to premiere some Disney+ original content on Disney Channel prior to the show being moved to the streamer. The idea, as reported at the time, was that by broadcasting the show there first various associated costs for that shot could be moved to the Disney Channel portion of the balance sheet. This would shrink the costs, and therefore the losses, of Disney+.
At least one lawsuit by Disney stockholders over this same issue has already been filed in California, but now Deadline reports that New Jersey-based Stourbridge Investments, a Disney shareholder, has filed its own suit over the same set of practices.
Both Bobs (Iger and Chapek) are named, along with former Disney CFO Christine McCarthy, the rest of the Disney Board of Directors, and Kareem Daniel, the former head of Disney’s Media and Entertainment Division. Daniel was fired within the first 24 hours of Iger retaking control of the company and the DMED organization has been restructured out of existence. Interestingly, the lawsuit is actually filed on behalf of Disney the company, as it claims the actions of the various individuals have harmed the company they all work for.
Disney+ has been a significant money loser for Disney since its inception. The company was up front that it was not expecting the streaming side of the company for a few years, but the losses that came in 2022 were significant. In November 2022 Chapek was replaced as CEO by the man he had replaced, Bob Iger. It was following this that the news of the alleged Disney+/Disney Channel financial moves became public. The Wall Street Journal reported that it was one of the reasons McCarthy began to reach out to Iger to see if his return as CEO was possible.
Since returning, Bob Iger has been on a cost-cutting spree. In addition to 7,000 Disney Cast Member layoffs, a lot of the attempts to find savings have been regarding Disney+, with content being pulled from the service and a lot of the Chapek-era plans to spend a great deal more on original content being significantly curtailed.