This summer, ABC News made a historically large payout to settle a defamation lawsuit over 'pink slime,' or what the meat industry likes to call 'lean finely textured beef.'
No, that's not referring to Hulk Hogan, but there is a worrisome connection between this media lawsuit and the one backed by Peter Thiel against Gawker, which silenced that publication.
The meat company that made the stuff lost sales, and sued. Safeway and other big grocers even pulled the product, and Diane Sawyer offered tips on how to avoid buying the 'filler used to pump up the volume of meat.'
Both Sawyer and ABC reporter Jim Avila were named in the lawsuit.
A newly public financial release from ABC News parent company Disney, and an attorney for the plaintiff, shows just how much the home of 'Good Morning America,' '20/20,' 'Nightline,' and Mickey Mouse had to fork over in their epic legal battle with a South Dakota meat product processor.
In a footnote on the company's quarterly earnings report on Tuesday, Disney said it paid $177 million that was "incurred in connection with the settlement of litigation," at least some of which was related to a years-long legal dispute with South Dakota-based meat processor Beef Products Inc.
Disney has not specified exactly what it spent the $177 million on — some of it may represent money that went to legal costs and other related items, as well as other legal disputes — but a lawyer for BPI told CNNMoney that its settlement was worth even more than $177 million.
Spokespeople for both ABC News and Disney did not respond to a request for comment.
Even just $177 million would likely represent roughly a year's worth of advertising revenue for ABC's evening news program, a significant sum for the network and a sign of how damaging defamation suits can be for media outlets after the Hulk Hogan case sent Gawker into bankruptcy.
Beef Products Inc. sued ABC News for over a billion dollars over news reports in 2012 on the company's use of 'pink slime,' a 'finely textured beef product' that is low in fat.
In South Dakota, libel against food (yep, food) can mean triple damages must be paid by "those found guilty of misleading consumers about the safety of food products." Because of this state law, ABC News was looking at the possibility of a roughly $6 billion payment. In that context, $177 million doesn't sound so bad
The on-air reports led by ABC correspondent Jim Avila noted that some critics had referred to the product as "pink slime," and that BPI did not label the ingredient when it was included in its beef. ABC made it clear in the reports that the so-called "pink slime" was not unsafe to eat, but BPI claimed that the coverage put a significant dent in its bottom line.
Publicly, nothing's known about the terms of the agreement between BPI and Disney. As CNN notes,
The $177 million listed in Disney's earnings report is not the total settlement. That figure refers only to the amount that the company will pay; the rest will presumably be covered by insurance.