Disney’s Settlement With Donald Trump: Bob Iger’s $16 Million Decision, Fear at ABC News and Questions About George Stephanopoulos’ Future
On the eve of a jury trial in June 2017, Disney settled a defamation lawsuit brought by a beef company for a whopping $177 million. The case stemmed from a series of ABC News reports in 2012 fronted by star anchor Diane Sawyer that dubbed the processed meat “pink slime.” At the time, it marked the largest settlement or jury award ever for a libel case and has since been eclipsed only by Alex Jones ($1.438 billion to Sandy Hook families) and Fox News ($787.5 million to Dominion Voting Systems).
Fast forward to 2024, and George Stephanopoulos is now the face of ABC News and one of the highest-paid anchors on TV, making up to $18 million per year. And inside Disney’s C-suites on the Burbank lot, there was a feeling of déjà vu thanks to a looming defamation lawsuit filed in March by former and incoming President Donald Trump, a far more powerful and strident adversary than a South Dakota food processor. But a protracted fight with the president elect were similarly unpredictable and potentially devastating.
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Says a source familiar with the inner workings of ABC: “This was ‘Pink Slime II: The Sequel.’”
In a move that floored ABC News’ rank-and-file journalists inside the network and in the broader journalistic community, Disney CEO Bob Iger authorized a $15 million settlement and an additional $1 million to cover Trump’s legal fees as well as a quasi-apology on Dec. 13. According to sources, Stephanopoulos was blindsided, unaware that Disney would back down in such a public manner until a few hours before the news broke. (Disney and Stephanopoulos declined comment.)
As CEO, Iger had long been a champion of Stephanopoulos, despite the anchor’s wonkier tendencies as “GMA” has needed to lean more heavily on pop culture and celebrity for ratings. (The morning show averaged 2.69 million viewers last week, behind “Today’s” 2.83 million average.) When Stephanopoulos started to float the idea in 2020 that he might leave ABC as his four-year contract was about to expire, Iger directly helped steer the negotiations to keep him in the fold — giving the anchor a new lucrative deal that also allowed him to produce documentaries for Hulu such as “Pretty Baby.”
But with Stephanopoulos’ current deal up in early 2025, insiders at ABC aren’t sure if he will stay at the network given the recent turn of events. Sources say Stephanopoulos has been vocal about how unhappy he has been with the settlement and apology. For ABC, the economics of paying an anchor $18 million a year may not make sense as “GMA” isn’t the advertising cash cow it once was. (Hoda Kotb recently announced her departure as a full-time anchor on “Today” after NBC tried to slash her salary.)
Trump’s decision to sue ABC news and the settlement offers a window into just what the future might hold for journalists in his second term. “We’re aghast,” says one entrenched media executive with oversight of network TV news. “This is capitulation, but it’s also payback for how sloppy the press has been. We should have been more buttoned up and ready for this.”
For observers who monitor First Amendment issues, the settlement will have a chilling effect.
“It sends a message to be quiet,” says Katie Blankenship, senior director at PEN America, which advocates for free speech. “It sends a message to err on the side of caution.”
In a statement, Society Professional Journalists executive director Caroline Hendrie said she “is concerned that the largely unexplained decision to settle the case risks setting a troubling precedent about the willingness of news organizations to defend their journalists in court.”
But Disney faced major hurdles with the lawsuit that stemmed from the anchor’s comments made on air that falsely claimed, “Donald Trump has been found liable for rape by a jury.” (In fact, a jury’s verdict found Trump liable for sexually abusing writer E. Jean Carroll in the 1990s.) Stephanopoulos repeated the error 10 times during a March broadcast on “This Week,” the Sunday news program that he hosts.
Stephanopoulos isn’t the only high-profile person to use the word “rape.” Illinois Gov. JB Pritzker called Trump “an adjudicated rapist” during an interview with Jen Psaki on MSNBC as did Rep. Jamie Raskin while speaking with Dana Bash on CNN. Actor Bradley Whitford used that exact phrase during a rally for Kamala Harris in Wisconsin in October.
But ABC News is held to the highest journalistic standards and an anchor’s lapse is different than a guest’s, making Stephanopoulos an easy target. Still, many are perplexed by why Disney folded so early in the legal process. In July, a federal Florida judge ruled against Disney’s bid to toss Trump’s suit, allowing for it to move forward. But the case was not yet guaranteed to go to a trial, when the real expenses of litigation kick in.
As such, the settlement sent “shockwaves” through the media law community, says Katie Townsend, the legal director of the Reporters Committee for Freedom of the Press.
“It’s candidly pretty troubling,” she says. “The concern is — particularly given the timing and the nature of the settlement — that it will encourage and embolden President Trump and people in his circle to pursue even more of these types of not just litigation, but threats of litigation.”
Townsend said she was surprised that ABC did not pursue the case through the discovery process to a ruling on summary judgment. (The network did just that in the “pink slime” case as did Fox News in its battle against Dominion, with the latter opening up the network to embarrassing emails and text messages indicating bias that were collected during the discovery process.)
Chad Milton, a media consultant who specializes in liability insurance, said he also found it a little surprising that ABC did not pursue its viable legal defenses. ABC could have argued both that Stephanopoulos’ characterization was “substantially true,” and that he did not act with “actual malice” — that is, a willful disregard of the truth.
“I’ve heard the chatter that people think this is a capitulation to Trump,” Milton said. “Sometimes business considerations will be factors. The bigger the business, the more entangled it is.”
Some believe the case was winnable for the network.
“I felt from the beginning that ABC and George Stephanopoulos had extremely strong arguments to defeat this lawsuit,” says Ted Boutrous, a First Amendment lawyer who fought the first Trump administration over press access. “There were multiple legal and constitutional defenses that put them in a very strong position.”
Boutrous predicts that the settlement will have a “ripple effect across the journalistic landscape” and gives Trump “a green light to bring other lawsuits.”
Others believe that a settlement now — one month before Trump takes office for a second term — was the best option. Disney, which reported $88 billion in global revenue in 2023, didn’t want to start off 2025 in a protracted fight with Trump, who could have continually trashed the company’s movies, TV shows, amusement parks and merchandise to the 77 million Americans who voted for him from his perch of the highest office in the land.
Gregory Doll, an attorney at Doll Amir & Eley in Los Angeles, calls Disney’s move “just smart business.” He adds: “This was just going to be a cloud hanging over them. ABC News is going to want to have interviews with [Trump’s] cabinet and other officials.”
Furthermore, Disney is already locked in battle with billionaire Elon Musk, who has been tapped to lead Trump’s “Department of Government Efficiency” with Vivek Ramaswamy. Musk is backing actress Gina Carano in a lawsuit against Disney for her firing from the series “The Mandalorian” over social media posts deemed offensive by the company. Disney stopped short of waging multiple battles with Trump and his closest associates.
But Townsend argued ABC’s motivations are less important than the ultimate effect the litigation could have on others. She said politicians have already been misusing the legal system to go after their critics.
“I don’t see any signals that that’s slowing,” she said. “We can anticipate that’s probably going to increase.”
Case in point: In the immediate aftermath of the settlement, Trump filed a civil lawsuit against the Des Moines Register for publishing J. Ann Selzer’s poll days before the election that showed Harris leading Trump in the state by three points, citing a margin of error of plus or minus 3.4 percentage points. Trump would go on to win Iowa by 13 points.
As one of the biggest corporations in the world, Disney is capitalized well enough to cover $16 million and face a few days of bad press. After all, the company reached a $233 million settlement this week in a class action lawsuit about wages, an issue that also has put Disney in a negative light, with everyone from progressive politicians to heiress Abigail Disney slamming the company for its labor practices. But any focus on wage disparity at Disney also was quickly overshadowed by another controversy involving the company: that it pulled a transgender storyline from Pixar’s “Win or Lose” streaming series. In a rapid-fire news cycle, that, too, will likely be replaced by a future unnamed headache. Given that the culture wars have negatively impacted Disney’s bottom line in recent years, Iger appears more willing to bite the bullet and take a few short-term hits in exchange for staying out of politics.
Says Doll: “I don’t think they want to be in a constant state of acrimony.”
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