Disney faces new legal challenge related to Disney+

US media outlets are reporting that Disney is being sued by shareholders that claim the media giant “repeatedly misled investors” about the performance of the Disney+ streaming platform and the high cost of growing its subscriber base.

With Disney’s share price currently at a nine-year low, US-based Stourbridge Investments is alleging that the company’s leadership “materially misrepresented” Disney+’s financial position, leading to a “precipitous decline in market value”.

Among Stourbridge’s key allegations, the company said that Disney shifted some marketing and production costs from Disney+ to the company’s legacy business – as a way of disguising the level of investment associated with the streaming business.

The Stourbridge complaint is not the only headache facing Disney. Earlier this year, a similar shareholder-led lawsuit was brought against the company.

Disney has had to stomach large losses over the last year, leading to the downward pressure on its share price. However CEO Bob Iger insists that the streaming service is on course to be profitable by the end of the 2024 financial year. Currently, the company has 146.7 million global subscribers across all its streaming services.