Disneyland Passholders Struck With Unfair Reparations and Price Hikes Following Magic Key Dispute

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The iconic Disneyland Railroad train station is seen with a classic red train at the platform, adorned with red, white, and blue bunting. The building is surrounded by well-maintained landscaping, flowers, and trees, with blue skies and a flag atop the roof.

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Disneyland Magic Key holders can’t catch a break, as the Annual Pass is about to face shocking price hikes following a scandalous lawsuit.

The Walt Disney Company has been embroiled in controversies and lawsuits for a good part of 2023, with the most notorious being the lengthy legal and political battle between Florida Governor Ron DeSantis and the House of Mouse, harming local businesses, theme park attendance, and sparking multiple demonstrations from hate groups outside Walt Disney World Resort.

Florida Governor Ron DeSantis on stage
Credit: Gage Skidmore, Flickr

Related: Disney Officially Ends Magic Key Benefit Effective Immediately

Unfortunately, Disney recently had to fence a significant lawsuit in the Golden State, resulting in a multi-million-dollar loss for the company. Or did it?

The lawsuit was spearheaded by Jenale Nielsen, a guest who demanded reparations for “deceptive business practices,” claiming that she was paying a price higher than ones offered in previous years for less benefits with the promise that “there would be no blocked times for entrance to the Disneyland Resort in Anaheim.” However, “getting a reservation during any busy time [was] nearly impossible.”

The lawsuit slowly progressed since its original filing in November 2021, with a federal judge approving it and allowing it to continue in 2022.

Sleeping Beauty Castle at night after the rain with pink lights and the Disney100 decorations in Disneyland Park at Disneyland Resort
Credit: Ed Aguila / Inside the Magic

Related: Disney Shockingly Ceases All Magic Key Sales Indefinitely

Earlier this year, The Walt Disney Company reached an agreement to cost the company nearly $10 million in reparations to over one hundred thousand affected Magic Key holders.

And while the scandalous lawsuit surrounding thousands of members of Disneyland Resort’s Magic Key program apparently concluded positively, a recent report revealed that Annual Passholders of the Southern California theme park received the most negligible benefits from this lawsuit.

Cast Members waving down Main Street, U.S.A, at Disneyland Park in Disneyland Resort
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A recent OC Register report revealed that, in reality, Magic Key pass holders will receive about $7 million of the $9.5 million settlement from the controversial lawsuit.

Magic Key holder and plaintiff Jenale Nielsen of Santa Clara County will reportedly receive $5,000 as an “incentive award” for her time, effort, and service — 75 times what each of the other Annual Passholders will.

However, 25% of the $9.5 million settlement is set to go to the class-action lawyers representing Nielsen, who are requesting $2.375 million.

The report adds, “The settlement administrator for the Magic Key class action case estimates notification costs will run $147,547. The class action settlement administration firm provides notice to passholders, pays out the cash awards, fields inquiries, handles unclaimed funds and deals with all the expenses and taxes related to the settlement.”

Disneyland Main Street Marching Band
Credit: Disney Parks Blog

And, of course, Disney had to fork out $9.5 million — plus attorney fees — as a result of the scandalous Magic Key lawsuit. However, the settlement still scored a significant win for the company.

Reportedly, Nielsen’s lawyers had initially sought $39 million in the class action lawsuit, representing reparations for $379.19 per Dream Key Annual Passholder compared to the $67.41 agreed in the final resolution — which doesn’t cover the cost of a single-day one park per day ticket, even on the lowest priced dates marked on Disneyland’s tier-based ticketing system.

This means that the settlement, although beneficial for members of the Magic Key program, saved Disney nearly $30 million in potential damages.

Disneyland's Toontown
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Related: Disney Park Ticket Rules Eliminated, Prices Skyrocket

Unfortunately, Disneyland’s Magic Key holders are now facing another problem, as The Walt Disney Company recently announced significant price increases to their Annual Pass programs in America.

Disney recently announced that all four tiers of the Magic Key program — Inspire Key, Believe Key, Enchant Key, and Imagine Key — would see price hikes ranging from $50 to $150, depending on the pass type. Sales for new Magic Key passes remain indefinitely paused while renewals are ongoing at the Anaheim-based Disney Resort.

partners statue disneyland
Credit: Disney

While the recent price increases and the resolution of the Magic Key lawsuit are not officially related, it is hard to ignore some relation between the events.

The Annual Pass program at Walt Disney World Resort also suffered from these price hikes and modifications to some offerings at the Orlando-based Disney Resort.

More on Disney’s Magic Key program sales

Disneyland Resort shifted its Annual Pass system, turning it into the Magic Key program, which allows guests to become “a townsperson on Main Street, U.S.A., a galactic citizen of Batuu, a hero at Avengers Campus, a local at Pixar Pier and beyond.”

Sales for Magic Key Passes have proven problematic since Disneyland reimagined its program in 2021, with exceedingly high demand and a limited offer of the exclusive membership and its benefits. However, Magic Key Passes are still highly sought-after, with new passes quickly selling out earlier this year.

Guests with MagicBands in front of "it's a small world" while on their Disney World vacation
Credit: Disney

Disney describes the Magic Key program as follows:

The Magic Key program provides reservation-based admission to one or both Disneyland Resort theme parks where you’ll make memories visit after visit. Magic Key passes feature a variety of admission opportunities, pricing options, experiences, and savings on food, beverages and merchandise.

Magic Key holders enjoy admission opportunities, value and convenience at the Disneyland Resort. Whether you consider yourself a Mouseketeer, Space Ranger or Super Hero, there is something for everyone as a Magic Key holder.

Were you aware of this lawsuit’s settlement and its implications? Will you be affected by the recently announced price hikes for Disneyland’s Magic Key Pass? Share your thoughts on this divisive matter with Inside the Magic in the comments below!

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