Slate Money – The Disney World Edition

Date: August 12, 2017
Host: Felix Salmon (Fusion)
Co-hosts: Anna Shymansky, Jordan Weissman

Overview

This week’s Slate Money episode focuses on business and finance news with a particular emphasis on Disney—covering Disney's legal settlement with BPI (“pink slime” case), the company's move to launch its own streaming service (and pull content from Netflix), and broader media industry implications. The episode also explores trends in modern office workspaces, with Apple’s new headquarters as a focal point, and closes with the weekly “numbers round,” tackling global financial curiosities.

Key Discussion Points & Insights

1. Disney’s $177M “Pink Slime” Legal Settlement

[02:05 – 17:54]

Background

• Disney and its subsidiary ABC settled a lawsuit with Beef Products Inc. (BPI) for at least $177 million after ABC aired reports about “pink slime” (lean finely textured beef).
• The ABC reports, while factually accurate, repeatedly used the term “pink slime,” causing public outcry and business losses for BPI.

Discussion Highlights

• Nature of the Product:

  • BPI’s product, a processed beef trimming treated with ammonia to kill bacteria, had been commonly used in ground beef but was not labeled as distinct in the marketplace.
  • “[It's] beef trimmings. It goes through a process…to remove the fat…then they figured out how to kill all the microbes by throwing ammonia all over.” – Anna Shymansky [04:53]

• Legal & Ethical Debate:

  • BPI’s lawsuit claimed that the ABC coverage caused major financial damage (seeking $5.4 billion).
  • Settlement occurred in North Dakota (BPI’s turf), where the media is less favored, possibly influencing Disney’s risk assessment.
  • ABC stands by the original story and never issued a correction, raising questions about why they settled.
  • “Truth really ought to be an absolute defense in these kind of cases…You put the true information out to the public, the public reacts…and then, you know, three cheers for journalism.” – Felix Salmon [07:25]
  • “To me, their decision to bow out of a case for a story they still stand by puts a huge target on the backs of basically all media.” – Anna Shymansky [08:45]

• Media Implications:

  • Large media corporations settling, even when their journalism is accurate, may set a dangerous precedent, encouraging lawsuit threats and chilling reporting.
  • The panel is united (albeit with misgivings about the journalistic tone) in criticizing Disney for not defending ABC’s reporting more robustly.
  • “Disney is not a news organization. It’s a large multinational entertainment conglomerate and doesn’t really care about journalism.” – Felix Salmon [15:46]

2. Disney Pulls Content from Netflix to Create Its Own Streaming Service

[17:54 – 26:35]

Context & Business Strategy

• Disney announced the withdrawal of its properties (Disney, Marvel, Star Wars, ESPN, etc.) from Netflix to launch a proprietary streaming platform.
• This is seen as a move toward greater fragmentation in the streaming ecosystem, challenging Netflix’s previous content aggregation model.

Discussion Highlights

• Impact on Consumers:

  • Potential for “a la carte” selection – subscribers may pay for many different services, impacting the anticipated savings from cord-cutting.
  • “This is the beginning of not being able to save any money by cutting [the cable]…” – Anna Shymansky [19:39]
  • Felix argues that paying for what you watch is consumer utopia, versus cable bundles that include unwanted content.

• Netflix’s Business Model Under Threat:

  • Netflix expected this shift; hence, their push toward original content production (essentially trying to become HBO – or even Disney).
  • Building original content is expensive and fueling Netflix’s growing debt load.
  • “Making that type of original content is quite expensive. If you look at Netflix’s last earnings, they also are eating up their cash.” – Jordan Weissman [23:46]

• First Mover Advantage & Future Outlook:

  • Netflix’s early dominance may help it weather increased competition, but its sustainability as a stand-alone entity is debated.
  • “The idea that this is a sustainable business is now something which is believed…by many, many other companies as well.” – Felix Salmon [25:46]

3. Open-Plan Offices and Apple’s New HQ

[27:13 – 35:29]

The Debate on Workplace Design

• Apple’s $5 billion new headquarters uses open-plan office design, which some employees reportedly dislike.
• Office layouts are discussed as both democratizing and potentially detrimental to productivity and morale.

Highlights & Opinions

• Open plans are said to increase camaraderie and information flow but can reduce privacy and concentration.
• “I've only known the world of cubicles and open floor plans…is it really [worse]? Is it really that horrific?” – Anna Shymansky [29:08]
• Examples from media and trading floors are discussed as both functional and problematic depending on worker needs.
• Employees try to create “bubbles of privacy”—e.g., using headphones, reducing screen sizes to maintain some discretion.
• “The headphone has become like the universal do not disturb sign.” – Felix Salmon [34:36]

Notable Quotes & Memorable Moments

• On Journalism and Legal Settlements:

  • “You cannot say that every single piece of journalism needs to be found particularly responsible by a jury in North Dakota. Otherwise you should lose $177 million. That is not how freedom of speech and the Constitution works.” – Felix Salmon [12:08]
  • “If you are a company which commits journalism…and you have the size and the resources that Disney has, then you should totally defend that journalism rather than rolling over and settling cases.” – Felix Salmon [10:25]

• On Office Culture:

  • “It really does create a sense of camaraderie and you always have rooms you can go to…but it's also great for information flow. I actually wouldn't want to go back [to offices].” – Jordan Weissman [29:19]

• On Streaming Fragmentation:

  • “Now that streaming technology has improved…a lot of these content producers are going to say, ‘Why am I giving this to Netflix? Why don’t I just have my own service?’” – Jordan Weissman [20:01]

Timestamps for Key Segments

| Segment | Start | End | |--------------------------------------------------|-----------|----------| | Disney/BPI (“Pink Slime”) Lawsuit | 02:05 | 17:54 | | Disney’s New Streaming Service, Future of Netflix| 17:54 | 26:35 | | Open Office Plans: Apple’s Headquarters, Trends | 27:13 | 35:29 | | Numbers Round (market cap, VIX, LIBOR, etc.) | 36:30 | 46:10 |

“Numbers Round” Highlights

[36:30 – 46:10]

• $775 billion: The ostensible market cap of a Venezuelan bank due to artificial currency rates (Felix).
• 42: The VIX value during the 2011 debt ceiling crisis (Anna).
• $350 trillion: The notional value of derivatives tied to LIBOR, which is being phased out (Jordan).

Tone and Style

The episode is spirited, conversational, and sometimes irreverent—marked by deep dives, disagreements, and industry-savvy perspectives. The panel isn’t afraid to critique media giants or debate the economic and cultural implications of new business models and office trends.

Recommended For:
Anyone interested in the business of media, evolving workplace culture, and major legal developments impacting journalism.

Listen to the episode for more:

• Spirited debate on the role of megacorporations in upholding (or undermining) journalistic freedoms
• The Netflix-Disney rift and the future of streaming consumption
• Whether open-plan offices are truly the workplaces of the future—according to both millennials and older generations