Netflix, Disney+ and its sister streaming service Hulu got slapped with a lawsuit by 25 cities in Texas for failing to pay millions of dollars in municipal franchise fees as far back as 2007.

The Dallas County, Texas-based lawsuit was filed on behalf of 25 Texas cities, including Austin, Dallas, Fort Worth and Houston, according to Blue Ribbon News.  

The suit alleges that the streaming giants have not paid annual franchise fees, which are required by the Texas Public Utility Regulatory Act (PURA) and are used to fund basic city services.

“Disney, Hulu and Netflix have long withheld statutorily required payments to cities throughout Texas, depriving them of fees that help fund essential city services,” the lawsuit said. “This case was filed on behalf of our municipal clients to ensure future compliance with PURA and recoup significant fees owed by some of the nation’s largest streaming services.”

TV remote control is seen with Disney+ logo displayed on a screen
Disney’s streaming service, Disney+, was accused of not paying annual franchise fees to a host of Texas-based cities.
NurPhoto via Getty Images

Disney, Hulu and Netflix did not immediately comment.

The cities are seeking reimbursement of annual franchise fees, as well as interest, since Disney, Hulu and Netflix began streaming their platforms in Texas in 2007, 2011 and 2019, respectively.

For Disney, the Texas lawsuit isn’t its only court battle. Several actors and former cast members are suing Disney over its vaccine mandates, which cost them their jobs. And according to Disney blog Inside the Magic, a federal judge recently approved a $5 million lawsuit against Disneyland Resort over misleading and factually incorrect statements about its annual pass program.



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Tyler Cowan