Disney Admits It Paid $65 Million to Someone After a “Legal Ruling.” So Who Was It?

A new report has revealed that Disney paid $65 million in what appears to be a single payment for a “legal ruling,” but with no other details. Now the question is: who just got $65 million of the Mouse’s money?

The Walt Disney Company has unveiled its third-quarter earnings report, which is primarily intended to reassure skittish shareholders that everything is going okay, operating income is great, and there is no need for any further coups or takeovers of the board of directors. CEO Bob Iger and the rest of the executives are overall doing everything they can to present the company’s financial information in the most positive light, even to the point of trying to call ESPN+ bailing out the $19 million losses of Disney+ and Hulu “positive profitability.”

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But the most puzzling thing about the Disney Q3 earnings report is not how Iger and company are trying to massage data into the appearance they want, but what they are omitting. Deep in the report (via Business Wire), under data on how Disneyland and Walt Disney World are not pulling in the kind of visitors needed to sustain the Disney Experiences arm of the company is a rather vague section merely titled “Other Income (expense), net.”

That section of the report states, without any further explanation, “In the current quarter, the Company recorded a charge of $65 million related to a legal ruling.” Without elaborating further, it mentions a similarly vague previous charge, reading, “In the prior-year quarter, the Company recorded a charge of $101 million related to a legal ruling, largely offset by a $90 million gain on its investment in DraftKings, Inc. (DraftKings Gain), which was sold in the prior-year quarter.”

While Disney is a huge company with a current market evaluation of over $164 billion, a “legal charge” of $65 million without explanation is nothing to sniff at. It can be safely assumed that the Q3 earnings report has been thoroughly vetted by the Mouse’s vast army of lawyers and that if the “Other Income (expense), net” section does not legally require more explanation, they’re not going to provide it.

However, that does not mean there is not some questioning about where $65 million of Mouse money was paid. After all, “legal charge” is a very (and purposefully) nebulous term, which could mean anything from a settlement in a lawsuit to attorney fees paid.

Famously, Disney is a company extremely prone to lawsuits, and it may be difficult to determine where this $65 million has quietly gone. A likely candidate is TSG Entertainment, the film finance company that accused Disney of “Hollywood accounting” and “whitewashing” the proceeds of three joint movies, including The Shape of Water (2017). TSG Entertainment claimed Disney owed them over $40 million, per an independent audit.

Related: Disney Heavily Restricts Access to Theme Park Updates, General Public Blocked From D23

In our previous coverage, Inside the Magic reported that Disney and TSG Entertainment had come to an undisclosed settlement after:

The complaint outlined various financial discrepancies, including uncredited revenue, unauthorized distribution fees, and expenses unrelated to the films. Additionally, TSG alleged instances of “self-dealing,” where 20th Century purportedly entered into advantageous agreements with its licensee affiliates to diminish profit payments to stakeholders artificially.

It is very possible that the company paid out even more than expected to the company. On the other hand, it is currently facing lawsuits for age discrimination, gender discrimination, a tragic death at Disney Springs, and many, many more. It could be any number of the legal cases that the Mouse is embroiled in, but shouldn’t shareholders at least know where their money is being mysteriously paid?

Inside the Magic reached out to Disney for comment but had not heard back by the time of publication.

Does this “legal charge” line item seem strange to you, Disney fans?