How Much Does Disney Make from Disneyland?
Disneyland Resort is handing out free checks for $67.41 to certain fans.
Realistically, you’re probably not one of them, but you should read this just to be sure.
Photo: DIsney
After all, wouldn’t you like to know how many Magic Key annual passholders there are? We’ve got a pretty good idea now.
Disney Settles a Class-Action Lawsuit
Image: Disneyland Resort
Let’s start with the headline here. As we already knew, Disneyland Resort has settled its class-action lawsuit with its most loyal fans.
During the pandemic, somebody at Disney – let’s call him B. Chapek – decided to reinvent the wheel by changing the annual pass program.
Photo by Werner Weiss, 2000/Yesterland.com
Disney threw out the old annual passes and started a new system called the Magic Key program.
Throughout this process, Disney required Park Passes, aka theme park reservations, to manage the headcounts at all its American locations.
At the time, everyone recognized a logic flaw with the process.
Disney had sold its most expensive annual passes under the theory that guests could visit whenever they wanted.
Photo: Disneyland
Until that point, Disneyland fans only needed theme park admission. So, an annual pass with no blockout dates should have covered everything.
Customers purchased accordingly under that assumption. Then, the advent of Park Passes changed the rules overnight.
Photo: Disney
Annual passholders didn’t get a vote and really couldn’t express their displeasure without coming across as selfish.
After all, everyone understood that Disney needed to do whatever health officials suggested to protect the safety of all guests.
As the pandemic thankfully diminished in ferocity, these annual passholders finally felt comfortable in pointing out the injustice of their purchases.
Frankly, Disney provided its annual passholders with less than what was promised.
The thought didn’t bother every passholder – personally, I never had a problem with it – but it objectively did reduce the value of the annual pass.
So, many fans lawyered up by joining a class-action suit against Disney.
Regarding the Settlement
Eventually, Disney settled by paying $9.5 million to the class-action participants.
NEW: Terms of the Magic Key lawsuit have been posted – it’s a $9.5 million settlement fund for 103,435 Dream Key passholders (approximately $67.41 pp).
Claim submissions not required. An email will be sent at a later date to all eligible class members. pic.twitter.com/wZHucw01xv
— Scott Gustin (@ScottGustin) September 8, 2023
Given the terms of the settlement, Disney revealed a couple of things, one of which Scott Gustin indicated with the above tweet.
Photo: Disneyland
The filing suggests that 103,435 Disneyland Resort fans own the Dream Key version of the Magic Key program.
They’re the impacted people as this tier of annual pass specifically promises no blockout dates, which is the equivalent of not requiring a Park Pass.
Photo: Disneyland
This settlement entitles each one to the aforementioned $67.41.
Yes, Disneyland officials basically just said, “Your next spirit jersey is on us!”
In the process, Disney revealed more than we’d usually learn about the parks. That’s the fun part here.
Photo: Disneyland
Disney isn’t providing its Dream Key holders with the financial equivalent of a single park visit. Those famously cost $104 at a minimum.
Disney has earned a small bit of credit from Disneyland fans for maintaining the cost of the cheapest ticket to $104 for four years in a row.
Credit: Disney
So, on the one hand, $67.41 doesn’t sound like the best deal…but it depends on your perspective.
Disneyland had charged $1,399 for the Dream Key tier of the Magic Key program before this class-action suit started.
Photo: OC Register
In late 2022, Disney replaced the Dream Key with the Inspire Key, whose price just increased to $1,649 in October 2023.
The class-action suit provides what is tantamount to a refund of $67.41 or 4.8 percent of what the Dream Key had cost.
Over the course of a year, that’s the equivalent of 17.6 days.
From that perspective, Disney just gave Dream Key holders the equivalent of 17 free tickets.
Even if we use the most recent number of $1,649, we’re still talking about 15 days.
The Value of the Annual Pass
Photo: Disneyland
What fans and Disney analysts alike are realizing is how much value the annual pass program provides.
Even at the current cost of $1,649, a Disneyland fan only needs to visit the parks 16 times in a year to pass less than the cost of a single admission ticket.
Credit: Disney
Yes, you’ll gain a more significant admission ticket discount for a multi-day park visit, which is by design.
Disney benefits more financially from more extended customer vacations.
Photo: Disneyland
Still, you can follow the math here to understand the underlying point.
At $1,399 for one year of Magic Key admission, guests were paying $3.83 per day. Even at $1,649, that’s still Just $4.52 per day.
You may laugh at this notion, thinking nobody goes to Disneyland every day. But I can assure you that some do:
This person later earned headlines by saying he hadn’t returned to Disneyland since the pandemic, but that’s not the point.
Several hundred Disneyland fans visit the parks 300+ times annually, and some proudly brag about the length of their Cal Ripken-like streaks.
They visit The Happiest Place on Earth daily, no matter what.
For these people, this latest turn of events has reinforced that a Magic Key purchase is a no-brainer.
Other Disneyland News
(File photo by Mark Rightmire, Orange County Register/SCNG)
The odds are good that some of the Magic Key tiers are more popular than others.
For this reason, we cannot assume a precise number of Magic Key passholders.
The lazy math would suggest that 413,740 people purchase Magic Keys annually.
Image Credit: Jeff Gritchen, Orange County Register
We reach that conclusion by multiplying four tiers of Magic Keys by the number of Dream Key passholders, which is 103,435.
Still, I would expect that the California/weekday passes sell even better than the most expensive option, which had been the Dream Key and is now the Inspire Key.
Since the Imagine Key costs $499, while the Enchant Key costs $849, I think that’s a reasonable belief.
If so, more than 400,000 people own Magic Keys, thereby guaranteeing Disney LOTS of annual revenue.
Brady MacDonald at the Orange County Register recently did the sloppy math, and here is his conclusion:
“Disneyland brings in a staggering $2.3 billion to $3 billion annually from Magic Key passholders and daily visitors.”
Disney added a recent SEC filing that recategorized parts of the corporate empire.
The Experiences segment covers Theme Parks and Experiences.
Disney’s filing indicates that Experiences earned $24.389 billion during the first nine months of fiscal 2023.
We can (more safely) extrapolate that to $33+ billion for the fiscal year.
Cars Land Lighting
Presuming that’s true, Disneyland is responsible for as much as nine percent of the overall Experiences segment’s revenue.
According to a financial analyst that MacDonald had previously quoted, Magic Key passholders represent half of Disneyland’s annual attendance.
That’s how important the Magic Key program remains to Disney even after 68 years of Disneyland!
Photo: MickeyBlog
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