Entertainment giant Walt Disney (DIS) has agreed to pay $43.3 million to settle a class-action lawsuit filed by nine female employees in 2019, alleging gender pay discrimination. The lawsuit claimed that Disney paid female middle managers less than men in similar roles over the past ten years, violating California’s Equal Pay Act.
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The plaintiffs argued that before 2018, Disney offered women lower starting salaries than their male counterparts, partly because their pay was often based on previous salaries at other companies. By doing this, Disney overlooked the pre-existing gender pay disparities. Investors should note that the case was filed by LaRonda Rasmussen, a product development manager at Walt Disney Studios, who continues to work at the company.
While Disney has denied any wrongdoing, it agreed to a settlement to avoid a potentially lengthy and costly trial. According to the deal, Disney will implement measures to address pay equity, including training its compensation team and conducting regular pay equity analysis. The settlement is subject to final approval by a judge in January 2025.
Analyzing Disney’s Legal Risks
In addition to the gender discrimination lawsuit, Walt Disney faces several other legal challenges. These include an antitrust lawsuit filed by FuboTV (FUBO) against Disney, Fox (FOX), and Warner Bros. Discovery (WBD) over their plans to launch a sports streaming platform. FuboTV alleges that the joint venture between these media giants aims to monopolize the sports streaming market. The case is set to go to trial in October 2025.
According to the TipRanks’ Risk Analysis tool, DIS’s legal and regulatory risks account for 13% of its total risks, which is below the industry average of 18.1%.
Is Disney Stock a Good Buy?
Turning to Wall Street, DIS has a Strong Buy consensus rating based on 15 Buys and five Holds assigned in the last three months. At $124.29, the average Walt Disney price target implies a 7.15% upside potential. Shares of the company have gained 29% year-to-date.
