The Walt Disney Company has come under intense media scrutiny following the studio’s decision to settle President-elect Donald Trump’s defamation lawsuit against ABC News for more than $15 million.
Several claims made by unnamed sources in recent reports shed some light on Disney CEO Bob Iger’s ultimate decision to avoid a trial and settle with the incoming president.
— Disney executives feared that a Florida jury would side with Trump, given that Florida voters overwhelmingly chose Trump in the November election. Such a jury would have potentially awarded him a sum exceeding what it would cost to settle, according to a report from the New York Times.
— Disney lawyers were worried that if the case made it to the Supreme Court, it would encourage the justices to revisit the landmark New York Times v. Sullivan ruling, which gives news outlets extraordinary protections from defamation cases, according to a Wall Street Journal report.
— George Stephanopoulos — whose repeated false claims against Trump on Good Morning America ignited the whole legal battle — is said to have been blindsided by Disney’s decision and could soon leave the network, according to a Variety report.
Together, the reports paint a picture of internal turmoil within ABC News, with the division’s journalists pitting themselves against Disney corporate brass by leaking details to other media outlets.
The reports say little or nothing about Disney executive Dana Walden, who runs ABC News and is a close personal friend of Vice President Kamala Harris. Walden would almost certainly have been involved in some capacity in the decision to settle with Trump.
What remains clear is that Disney executives anticipated the public backlash to the settlement, but determined that it was worth it because they recognized they could lose the case and wanted to protect the Disney brand.
They also feared a protracted legal battle would adversely impact ABC News’ ability to be competitive over the next four years of the second Trump presidency.
George Stephanopoulos made repeated false claims against Trump during a March Good Morning America broadcast, incorrectly saying several times that a jury had found Trump “liable for rape.” But that wasn’t true — the jury found Trump liable for “sexual abuse.”
Stephanopoulos, a former Clinton operative, repeated the defamatory claim ten times during the March broadcast.
Some pundits have speculated that Disney settled in order to prevent embarrassing details about ABC News from emerging during the discovery process. Both Trump and Stephanopoulos were set to give depositions for the case until the settlement was reached over the weekend.
The settlement — $15 million to Trump’s future presidential foundation and museum, plus another $1 million to cover his legal fees — was recommended by Horacio Gutierrez, Disney’s general counsel, and approved by Iger. It was not elevated to a company board vote, the Times reported.
For Disney, the settlement amounts to a drop in the bucket. The studio raked in nearly $89 billion in revenue for its most recent fiscal year.
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