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Disney Discloses $177 Million Settlement in Aftermath of ABC's "Pink Slime" Trial


Beef Products Inc. had been demanding billions until a defamation trial abruptly ended in late June.
In Disney's latest quarterly earnings report, the Mickey Mouse company reports a $177 million expense related to the settlement of litigation. Was it the price for getting Disney's ABC News unit out of a defamation lawsuit?

On June 28, the case between Beef Products Inc. and ABC abruptly ended after three weeks of what was expected to be an eight-week trial. BPI had been seeking damages worth several billions over a series of World News reports in March 2012 about its product, officially called "lean finely textured beef" (LFTB) and dubbed “pink slime” by critics. At trial, the plaintiff attacked media bias and attempted to prove that ABC damaged its reputation by stating or implying that its product isn't meat or beef, isn't nutritious, isn't safe, was only approved by government regulators through misconduct and referring to it as "pink slime."

Jurors heard from Diane Sawyer, a beef expert, a marketing consultant and others before the parties surprised everyone by announcing that after about five years of litigation, before ABC had a chance to present its own case, a settlement had been reached.

The terms weren't disclosed, but since Disney has been for years reporting about the existence of this lawsuit — and no other lawsuit — in 10-Q reports to shareholders filed with the Securities & Exchange Commission, its first quarterly report since the settlement announcement had some intrigue.

Disney's third-quarter report doesn't specifically attribute the $177 million settlement expense to the "pink slime" case and also notes this is a net sum after the factoring of "committed insurance recoveries." There's also the possibility that it relates to some other Disney case, like the $100 million deal struck earlier this year to end an antitrust class action brought by animation workers.

If $177 million is what ABC paid to end the case, though, it would represent one of the biggest hand-overs of cash in a defamation case in media history. Of course, it's not nearly the $5.7 billion demanded by BPI. (Insurance money could have gone to the beef giant, too).

Disney hasn't responded to an inquiry.

Eriq Gardner


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