President Donald Trump and First Lady Melania Trump dance at the Freedom Ball on January 20, 2017 in Washington, D.C.
Former President Donald Trump‘s 2017 inaugural committee and his company have agreed to pay the District of Columbia $750,000 to resolve allegations that those entities and the Trump hotel there illegally misused non-profit funds to enrich the Trump family, D.C.’s attorney general said Tuesday.
The Trump Organization and the committee admitted no wrongdoing in the settlement. But the deal is the latest legal black eye for the former president.
Trump faces a pending criminal investigation in Georgia over allegations that he illegally interfered in the 2020 presidential election there, and a civil probe in New York, whose attorney general has said there is evidence the Trump Organization illegally manipulated the stated value of real estate assets for financial benefit.
“No one is above the law — not even a president,” said D.C. Attorney General Karl Racine in a statement announcing the settlement of a lawsuit he filed against the Trump entities in 2020. It alleged more than $1 million in improper payments to the Trump International Hotel in Washington.
“After he was elected, one of the first actions Donald Trump took was illegally using his own inauguration to enrich his family. We refused to let that corruption stand,” Racine said.
The District of Columbia alleged in its lawsuit that the Trump Inaugural Committee, which is a non-profit corporation, coordinated with members of Trump’s family “to grossly overpay for event space” at the Trump hotel during his 2017 inauguration as president, the AG’s office noted at the time.
“Although the Inaugural Committee was aware that it was paying far above market rates, it never considered less expensive alternatives, and even paid for space on days when it did not hold events,” the office said.
“The Committee also improperly used non-profit funds to throw a private party for the Trump family costing several hundred thousand dollars.”
Gates in a December 2016 email told Ivanka Trump that he was worried about “the optics” of the presidential inaugural committee being asked to pay $3.6 million for room rental and minimum food and beverage costs.
“The cost itself seems quite high compared to other property buyouts for the week,” Gates told her in that email, which was included in court documents as part of the lawsuit.
The settlement money from the Trump entities will be split between two nonpartisan nonprofit organizations in Washington, Mikva Challenge DC, and DC Action.
Racine’s office said those groups “promote civic engagement, democracy, and youth leadership in the District.”
Thomas Barrack, a billionaire friend of Donald Trump who chaired the former president’s inaugural fund, exits following his arraignment hearing at the Brooklyn Federal Courthouse in Brooklyn, New York, U.S., July 26, 2021.
Brendan McDermid | Reuters
Trump in a statement said, “Given the impending sale of The Trump International Hotel, Washington D.C., and with absolutely no admission of liability or guilt, we have reached a settlement to end all litigation with Democrat Attorney General Racine.”
Trump added, “As crime rates are soaring in our Nation’s Capital, it is necessary that the Attorney General focus on those issues rather than a further leg of the greatest Witch-Hunt in political history. This was yet another example of weaponizing Law Enforcement against the Republican Party and, in particular, the former President of the United States. So bad for our Country!”
The twice-impeached Trump often has blasted other investigations of himself and the Trump Organization as “witch hunts.”
Trump’s friend Thomas Barrack, a private equity investor, was chairman of the 2017 inaugural fund. Barrack was arrested last July on federal charges of illegally lobbying Trump when he was president on behalf of the United Arab Emirates.
Barrack has pleaded not guilty in that case and is awaiting trial.
Gates pleaded guilty in 2018 in a separate federal prosecution, also unrelated to the inaugural committee, to conspiracy against the United States and lying to federal investigators.
He was sentenced to 45 days in jail after testifying against Trump’s 2016 presidential campaign chief Paul Manafort, Gates’ former business associate,’ at Manafort’s own criminal trial related to financial crimes for their work in Ukraine.
Trump later pardoned Manafort, who had been convicted.
Disney is raising prices, but this time, don’t blame inflation
Another major American company is raising prices again, but this time, don’t blame inflation.
Disney is increasing the price on its streaming products and signaled that a price hike could be in the works at its theme parks as well. On Wednesday, the company said the price of Disney+ without ads is jumping $3 per month to $10.99 starting Dec. 8. Hulu with ads will increase by $1 per month to $7.99, and Hulu without ads will jump $2 per month to $14.99.
Then on Thursday, Disney Chief Executive Officer Bob Chapek indicated to CNBC’s Julia Boorstin that a price increase will likely happen at theme parks as long as people keep coming in droves.
“We read demand. We have no plans right now in terms of what we’re going to do, but we operate with a surgical knife here,” Chapek said. “It’s all up to the consumer. If consumer demand keeps up, we’ll act accordingly. If we see a softening, which we don’t think we’re going to see, then we can act accordingly as well.”
Instead of blaming the rising cost of materials, labor and gas, Disney is rationalizing the increases based on the consistency of the popularity of its products. Disney said Wednesday that Disney+ added 15 million new subscribers last quarter, blowing out expectations. It also said it expects further growth for core Disney+ (excluding India’s Disney+ Hotstar) next quarter beyond the 6 million it added in its fiscal third quarter.
Raising prices on the back of strong demand isn’t new for Disney. The price of theme park tickets has climbed for decades. During its most recent quarter, the company posted a 70% revenue increase in its parks, experiences and products division, rising to close to $7.4 billion. Per capita spending at domestic parks rose 10% and is up more than 40% compared with fiscal 2019.
Handout | Getty Images Entertainment | Getty Images
Disney strategically caps attendance at its parks, an effort that was borne out of the attempts to avoid crowding during the Covid pandemic. The move is a way to improve the customer experience. Additionally, the company has added Genie+ and Lightning Lane products, which curate guest experience and allow parkgoers to bypass lines for major attractions.
Beyond the parks, Disney annually asks cable TV providers to pay aggressive price hikes for ESPN because it knows there’s strong demand for its stable of live sports rights.
Disney+ first launched in November 2019 at $6.99 per month. About three years later, the price of the ad-free product will have risen 57%. The service now has more than 152 million customers.
Chapek has experienced his share of bumps in the road since taking over for Bob Iger as Disney CEO. But one thing hasn’t changed: consumers still seem to enjoy what Disney has to offer.
Correction: During its most recent quarter, the company posted a 70% revenue increase in its parks, experiences and products division, rising to close to $7.4 billion. An earlier version misstated the percentage and mischaracterized the dollar figure.
WATCH: CNBC’s full interview with Disney CEO Bob Chapek
Disney streaming subscriber growth blows past estimates, as company beats on top and bottom line
A performer dressed as Mickey Mouse entertains guests during the reopening of the Disneyland theme park in Anaheim, California, U.S., on Friday, April 30, 2021.
Bloomberg | Bloomberg | Getty Images
If Disney+’s subscriber growth is any indication, the rumors that the global streaming market is nearing saturation have been proven untrue.
On Wednesday, the Walt Disney Company reported that total Disney+ subscriptions rose to 152.1 million during the fiscal third quarter, higher than the 147 million analysts had forecast, according to StreetAccount.
At the end of the fiscal third quarter, Hulu had 46.2 million subscribers and ESPN+ had 22.8 million. Combined, Hulu, ESPN+ and Disney+ have over 221 million streaming subscribers. Netflix, long the leader in the streaming space, had 220 million subscribers, according to the most recent tally.
Disney shares rose more than 6% after the closing bell.
The streaming space has been in a state of upheaval in recent weeks, as Netflix disclosed another drop in subscribers and Warner Bros. Discovery announced a shift in content strategy. While Netflix expects subscriber growth to rebound, uncertainty has left analysts and investors wondering what the future holds for the wider industry.
Also Wednesday, the company unveiled a new pricing structure that incorporates an advertising-supported Disney+ as part of an effort to make its streaming business profitable.
During the fiscal third quarter Disney+, Hulu and ESPN+ combined to lose $1.1 billion, reflecting the higher cost of content on the services. Disney’s average revenue per user for Disney+ also decreased by 5% in the quarter in the U.S. and Canada due to more customers taking cheaper multiproduct offerings.
Starting Dec. 8 in the U.S., Disney+ with commercials will be $7.99 per month — currently the price of Disney+ without ads. The price of ad-free Disney+ will rise 38% to $10.99 — a $3 per month increase.
In addition, Disney lowered its 2024 forecast for Disney+ to 215 million to 245 million subscribers, down 15 million on both the low end and high end of the company’s previous guidance.
Disney had previously set its Disney+ guidance in December 2020 at 230 million to 260 million by the end of fiscal 2024. The company reaffirmed its expectation that Disney+ will become profitable by the end of its fiscal 2024 year.
Overall, Disney posted better-than-expected earnings on both the top and bottom line, bolstered by increased spending at its domestic theme parks.
Here are the results:
- Earnings per share: $1.09 per share vs. 96 cents expected, according to a Refinitiv survey of analysts
- Revenue: $21.5 billions vs. $20.96 billion expected, according to Refinitiv
- Disney+ total subscriptions: 152.1 million vs 147.76 million expected, according to StreetAccount
Big quarter for parks
Disney’s parks, experiences and products division saw revenue increase 72% to $7.4 billion during the quarter, up from $4.3 billion during the same period last year. The company said it saw increases in attendance, occupied room nights and cruise ship sailings.
It also touted that its new Genie+ and Lightning Lane products helped boost average per capita ticket revenue during the quarter. These new digital features were introduced to curate guest experience and allow parkgoers to bypass lines for major attractions.
The company said it has been able to bring back in-park experiences such as character meet-and-greets, theatrical performances and nighttime events at Disneyland, which has allowed it to increase capacity at its parks, CEO Bob Chapek said during the company’s earnings call Wednesday. Disney has placed caps on attendance since it reopened after the initial round of pandemic closures in early 2020 and instituted a new online reservation system to control crowds.
“As it relates to demand, we have not yet seen demand abate at all and we still have many days when people cannot get reservations,” Christine McCarthy, Disney’s chief financial officer, said during the company’s earnings call. “So, we’re still seeing demand in excess of the reservations that we are making available for our guests.”
Per capita spending at domestic parks increased 10% during the most recent quarter, compared to the same quarter last year and is more than 40% higher than fiscal 2019, the company said. Occupancy at domestic hotels in the third quarter was 90%.
Chapek pointed to EPCOT’s new Guardians of the Galaxy Cosmic Rewind, the launch of the Disney Wish and the opening of Avenges Campus in Paris Disneyland as enhanced offerings for guests that have driven traffic and revenue to this division.
McCarthy noted that international visitors to domestic parks have continued to be slow to return. Traditionally, those parkgoers account for around 17% to 20% of total guests.
“We expect international visitation when its fully back to actually be additive to margins, because those guests tend to stay longer at the parks and they spend more money when they’re there, as well,” she said.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. Comcast owns a stake in Hulu.
Serena Williams announces her retirement from tennis
Tennis legend Serena Williams announced her retirement in a Vogue article published Tuesday.
“I have never liked the word ‘retirement,'” Williams wrote. “Maybe the best word to describe what I’m up to is ‘evolution.’ I’m here to tell you that I’m evolving away from tennis, toward other things that are important to me.”
Williams, who turns 41 next month, has 73 career singles titles, 23 career doubles titles and over $94 million in career winnings.
Williams is widely hailed as one of the greatest athletes of all time. In her Vogue piece, she noted that some of her detractors point out that she hasn’t won the most Grand Slam titles in women’s tennis history, however.
“There are people who say I’m not the GOAT because I didn’t pass Margaret Court’s record of 24 grand slam titles, which she achieved before the ‘open era’ that began in 1968,” Williams wrote. “I’d be lying if I said I didn’t want that record.”
She said she will retire after the U.S. Open, which will run from late August into September. A victory there would tie her with Court’s Grand Slam record.
“I don’t know if I will be ready to win New York. But I’m going to try,” Williams wrote about the tournament, which is played in Queens.
She has counted sponsorships from companies including Nike, Audemars Piguet, Away, Beats, Bumble, Gatorade, Gucci, Lincoln, Michelob, Nintendo, Wilson Sporting Goods, and Procter and Gamble.
“I never wanted to have to choose between tennis and a family. I don’t think it’s fair,” Williams wrote. “If I were a guy, I wouldn’t be writing this because I’d be out there playing and winning while my wife was doing the physical labor of expanding our family.”
Williams focused on her family in the announcement, writing that her nearly five-year-old daughter wants to be an older sister. Williams is married to Reddit founder Alexis Ohanian.
“I have to focus on being a mom, my spiritual goals and finally discovering a different, but just exciting Serena. I’m gonna relish these next few weeks,” Williams wrote in an Instagram post Tuesday.
Professionally, she looks to expand Serena Ventures, a small investment firm of six people that was one of the first investors in MasterClass. Her firm raised $111 million in outside financing this year.
Williams wrote that only 2% of venture capital goes to women and that “in order for us to change that, more people who look like me need to be in that position, giving money back to themselves.”
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