Advertisement

SKIP ADVERTISEMENT

ABC’s ‘Pink Slime’ Report Tied to $177 Million in Settlement Costs

Workers produced lean, finely textured beef at a Beef Products Inc. facility in South Sioux City, Neb., in 2012.Credit...Lane Hickenbottom/Reuters

The Walt Disney Company said in its latest quarterly financial statement that it had $177 million in costs related to settling litigation. The announcement came just weeks after ABC News, a Disney unit, reached a settlement with a meat producer that accused the network of defamation for its reports about so-called pink slime, a processed beef product used as low-cost filler.

The company’s statement, released on Aug. 8, said in a footnote that the $177 million charge was “incurred” in the nine-month period ending July 1, in addition to what was covered by insurance. It gave no details about whether that charge — or how much of it — was directly related to the processed beef product case.

ABC News reached the settlement with Beef Products Inc., a privately owned meat producer in South Dakota, on June 28, ending a jury trial that started earlier that month. The terms of the settlement were not disclosed.

Image
A package of meat containing Beef Products’s finely textured beef, which has been referred to as pink slime.Credit...Beef Products, Inc., via Associated Press

But on Thursday, Dan K. Webb, a lawyer who represented Beef Products in the trial, said the settlement was higher. “As Disney disclosed, $177 million is not the total settlement amount. Based on Disney’s disclosure, it appears that Disney is funding $177 million of the settlement and its insurers are paying the rest,” he said in a statement emailed by a spokesman.

Beef Products said a report in 2012 by Jim Avila, an ABC News correspondent, misled consumers about the safety of the product, which is officially known as “lean finely textured beef.” The company had sought $1.9 billion in damages, but the figure could have grown to as much as $5.7 billion under a South Dakota law.

ABC News has not retracted or apologized for its report, which remains accessible on its website. It said Gerald Zirnstein, a former United States Department of Agriculture scientist, coined the term “pink slime” in a memo and told ABC News that he would not buy the product.

ABC News was among several organizations, including The New York Times, to report on questions about the safety of the product, which was commonly incorporated into foodstuff sold in grocery stores and used in schools and fast-food restaurants. Sales fell, and Beef Products closed three plants and laid off about 700 workers.

Calls and emails to an ABC spokeswoman, Julie Townsend, and a Disney spokesman were not immediately responded to on Thursday.

Ms. Townsend said in a June statement that the network maintained that its reports “accurately presented the facts and views of knowledgeable people about this product,” but that it continued the litigation for “the vigorous pursuit of truth and the consumer’s right to know about the products they purchase.”

Beef Products said in a statement after the June trial that the settlement would give it “a strong foundation on which to grow the business.”

“Through this process, we have again established what we all know to be true about lean, finely textured beef: it is beef and is safe, wholesome and nutritious,” the company said in the statement.

Advertisement

SKIP ADVERTISEMENT