By Joe Flint and Isabella Simonetti
Disney's decision to settle President-elect Donald Trump's defamation lawsuit against ABC News was supposed to relieve the company of a major headache. Instead, it has set off an internal backlash.
Many rank and file journalists and producers at ABC News are frustrated by the company's decision to resolve the suit, rather than fight in court Trump's claims against the network and its anchor George Stephanopoulos. ABC agreed to pay $15 million to Trump's future presidential foundation and museum, and $1 million in legal fees to Trump's lawyer, according to a court filing made public Saturday.
Disney Chief Executive Bob Iger approved the settlement, which was recommended by Disney general counsel Horacio Gutierrez, according to people familiar with the matter. They settled after a scheduled mediation session last week; Stephanopoulos was set to be deposed this week.
Disney concluded that it was facing a tough court battle in Florida that could have ultimately proven costly not only to the company but to press freedom writ large, if they lost, the people said.
Several ABC News staffers said it was a concerning precedent for a media company, and worry that the settlement sends a message that Disney is giving priority to its corporate interests and relationship with the White House over its own journalists. Media lawyers have also raised questions about the deal.
"It's really surprising and honestly perplexing that ABC decided to settle at this time and for this amount," said Sonja R. West, a law professor at University of Georgia School of Law, adding that it seemed to her the network had a strong defense. "No one wants to send the message to potential future plaintiffs that defamation lawsuits against the press are likely to end with a big payday."
Trump filed the suit in March, days after Stephanopoulos said multiple times in an interview with Rep. Nancy Mace (R., S.C.) on ABC's Sunday morning news show "This Week" that Trump had been found civilly liable for raping writer E. Jean Carroll. A federal jury determined he was liable for sexual abuse, but not rape.
Stephanopoulos later went on CBS's "The Late Show With Stephen Colbert" and reasserted his claim that "rape" was an appropriate word to use, based on comments made by the judge in the case. "I'm not going to be cowed out of doing my job because of the threat," Stephanopoulos said of Trump's lawsuit.
A Florida judge tossed ABC's motion to dismiss the suit in July, saying, "a reasonable jury could interpret Stephanopoulos's statements as defamatory."
In addition, the people said, Disney's legal team was concerned that given the current makeup of the Supreme Court, appealing a negative district court ruling could have jeopardized the landmark New York Times v. Sullivan ruling that protects the media in defamation cases.
The settlement came at the same time corporate leaders across industries have been working to bolster their relationships with the incoming administration, creating less than ideal optics inside ABC News. Executives are dining alongside Trump at Mar-a-Lago and companies including Meta and Amazon have pledged donations to his inaugural fund.
At a press conference from Mar-a-Lago on Monday, Trump addressed his concerns about the media and hinted at "a few" other defamation lawsuits in the works, including the one filed later that day against Gannett, the Des Moines Register and pollster J. Ann Selzer. The suit alleges violations of the Iowa Consumer Fraud Act, saying that the defendants committed "election interference" by publishing an Iowa poll favorable to Kamala Harris right before the election. Trump ultimately won the state by a large margin.
He also has cases pending against CBS over its editing of a Kamala Harris interview for "60 Minutes," and against the Pulitzer Prize board and author Bob Woodward.
"It costs a lot of money to do it, but we have to straighten out the press," Trump said. "Our press is very corrupt. Almost as corrupt as our elections."
ABC leaders haven't addressed the settlement in regular daily staff meetings, according to multiple staffers. Disney executives were concerned about leaks or embarrassment for Stephanopoulos if they were to discuss the matter in meetings or memos, people close to the company said.
ABC News agreed to attach an editor's note to an article about the Mace interview, which said the company and Stephanopoulos "regret statements regarding President Donald J. Trump."
The settlement with Trump didn't require ABC to address the matter on its network news shows including "This Week," "World News Tonight" or the morning show "Good Morning America," which Stephanopoulos co-anchors.
Stephanopoulos declined to comment on the settlement. He is completing a new deal with the network, people familiar with the matter said. He is currently one of ABC's highest paid on-air talent.
Some in the ABC News universe said Stephanopoulos now carries unnecessary reputational and legal liability -- without delivering blockbuster ratings for "Good Morning America," which has fallen to second place behind NBC's "Today" in overall viewers and key demographics.
In July, TMZ published a video in which a passerby approached Stephanopoulos and asked him whether President Biden should step down. Stephanopoulos replied: "I don't think he can serve four more years," a gaffe which frustrated many within the newsroom. The video was filmed just days after Stephanopoulos interviewed the president, following a disastrous debate performance. Stephanopoulos acknowledged in a statement the day the segment was posted that he shouldn't have responded to the passerby.
Since returning as Disney's chief executive in late 2022, Iger has sought to keep the company out of messy political battles, like one the company found itself in with Florida Gov. Ron DeSantis over his signing of the Parental Rights in Education Act in early 2022.
Bob Chapek, Disney's CEO at the time, publicly opposed the law, leading the Republican-controlled Florida legislature to pass a law stripping Disney of its control over the governance of Walt Disney World's land and infrastructure. Disney sued DeSantis, and settled the case in March, giving DeSantis more influence over Disney's Florida businesses.
Lee Levine, a retired media lawyer, said that he anticipates Disney's settlement will embolden some looking to pick legal fights with the media -- and potentially chill news outlets' handling of sensitive stories. It "will definitely have an impact on news coverage going forward," he said.
Write to Joe Flint at Joe.Flint@wsj.com and Isabella Simonetti at isabella.simonetti@wsj.com
(END) Dow Jones Newswires
December 18, 2024 09:41 ET (14:41 GMT)
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