Disney settles livestream subscriber class action for $50 million

SAN JOSE, Calif. (CN) — A federal judge on Thursday approved a multimillion-dollar settlement of a class action against The Walt Disney Company by livestream TV subscribers who claim they overpaid for services.

DirecTV and YouTube TV subscribers will be able to make claims for a piece of the $50 million settlement, according to plaintiffs’ attorney Yavar Bathaee.

In 2022, plaintiffs from five different states brought the class action against The Walt Disney Company on behalf of all DirecTV Stream monthly subscribers since April 1, 2019. YouTube TV subscribers joined a consolidated case in October 2023. They sought injunctive relief, treble damages, attorney fees and costs and compensation for overpayment for services.

The plaintiffs said Disney and cable providers entered into carriage agreements that restrain competition, and that horizontal agreements between direct competitors functioned as one enterprise. They cited Disney’s revenue from ESPN as an example, as it owns an 80% interest share of ESPN and makes billions of dollars per year through affiliate fees from cable television networks in the U.S. Cable companies pay affiliate fees for clearance to broadcast a TV channel as part of a package or bundle.

In October 2023, Davila denied Disney’s motion to dismiss the plaintiffs’ claim that it violated the Sherman Antitrust Act under the rule of reason.

Bathaee said as many as 11 and 17 million people, respectively, could claim part of the settlement.

“We think this meets all the requirement of approval,” said Bathaee.

The settlement includes up to $15.11 million in attorney fees and costs.

U.S. District Judge Edward Davila agreed, saying the settlement terms are fair, adequate and reasonable but had questions about the process for subscribers to make claims. Specifically, he wondered why the claim rate, which Bathaee said would likely be 3 to 5%, is so low given the size of the settlement.

“Is it complacency on the consumer’s part?”  Davila asked Bathaee, a long-time class action litigator.

Bathaee said that often for consumers the “information cost” is too high, and information about products is often ignored. For the Disney class action, claimants will be notified by email and postcards sent to physical addresses.

“If you think about it, 1% of 14 million people, that is still a lot of people,” he said.

Davila wondered if some sort of marketing beyond the settlement notices, could possibly get more people to follow through on the settlement.

“There could be some sort of advertising or marketing that says these are real cases and you are offered real relief,” the Barack Obama appointee said, adding: “I digress and I apologize.”

Along with the approval of the settlement terms, Davila also heard arguments on whether two Fubo subscribers should be allowed to continue their case against Disney or be compelled to arbitration.

Disney attorney Daniel Petrocelli said Fubo, a sports streaming service that was acquired by Disney in 2025, required its subscribers to agree to its terms of service when signing up for livestream TV. The terms included arbitration of any future lawsuits. Petrocelli said the terms of service included the phrase “future affiliates,” which applies to Disney.

Two Fubo subscribers say they did not enter into a contract with Disney when they signed up for Fubo’s services in 2023 and 2024 and should not be compelled to arbitrate their case.

Plaintiffs’ attorney Carrie Syme said there wasn’t a reasonable expectation that the plaintiffs knew they would ultimately be filing suit against Disney, as its name was not in the terms of service, and during the time of the subscribers’ first sign-up, Disney and Fubo were competitors.

“This motion will be under submission,” Davila said. “I look forward to getting an order out shortly.”