Disney Wins Ruling as ESPN Remains on Defense in Sage Steele Suit

Disney is off the hook in SportsCenter anchor Sage Steele’s lawsuit.

The case, filed against ESPN and Disney, is now only against ESPN, after a Connecticut judge recently dismissed Steele’s claims against Disney. The judge ruled that the entertainment conglomerate, which owns 80% of Connecticut-based ESPN, didn’t employ Steele and wasn’t involved in decisions to sideline her from appearing on-air.

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Steele sued ESPN and Disney in April for breach of contract and other claims, accusing the two of damaging her career. Steele said she was excluded from preferred programs and coveted assignments and forced to apologize on account of statements made during a September 2021 podcast of Uncut with Jay Cutler. Steele mocked ESPN’s vaccine policy and questioned whether former President Barack Obama was “black.” In June, ESPN moved to dismiss the lawsuit by Steele, who was not fired, suspended or fined. The company maintained it has the right to make casting decisions, including who it puts on TV.

In his Oct. 12 order, Judge James Sicilian concluded that Disney, a Delaware corporation with its principal place of business in California, is not a proper party.

Steele maintained that Disney promotes its streaming services across the United States, which suggests that it conducts business in Connecticut. But Sicilian found streaming coverage irrelevant since Steele’s claims didn’t “rise out of the streaming services of Disney+, ESPN+, or Hulu.”

Disney also introduced affidavits from both ESPN and Disney executives intended to distinguish the two companies.

Chris LaPlaca, a senior VP for communications at ESPN, said he worked with Steele on crafting a “public response” to address the fallout over her podcast statements. Disney, he said, “was not involved in our decision to have Steele and ESPN release statements addressing the controversy. It was also not involved in drafting those statements.” Similarly, ESPN EVP and executive editor Norby Williamson, whose responsibilities include assigning talent to various shows, stated that ESPN’s on-air talent are employees of ESPN, not Disney, and that Disney played no role in Steele’s assignments.

Sicilian also stressed that, “with only one exception, the individuals alleged in the complaint to have mistreated [Steele] or engaged in other conduct described in the complaint are connected with ESPN, and not directly with Disney.” The exception was Laura Gentile, who is EVP for commercial marketing at Disney Networks and ESPN. Gentile, Steele argues, made critical remarks of her at the ESPNW Summit in 2021 and “openly admitted that ESPN was taking disciplinary action against” her. Sicilian concluded that Disney was simply not involved in how ESPN treated Steele in the aftermath of her remarks.

Sicilian was also unpersuaded by Steele’s contention that her employment contract, which contemplates her performing work in Connecticut, draws in Disney. The contract contains the headline “ESPN PRODUCTIONS, INC. EMPLOYMENT AGREEMENT November 1, 2013.” It expresses that Steele agrees to perform work on behalf of ESPN Productions Inc., which is described as “a Delaware corporation, with offices at ESPN Plaza, Bristol, Connecticut.” Various ESPN executives signed the contract (and amendments in 2016 and 2017) on behalf of ESPN. Sicilian noted that “neither the 2013 agreement nor the later amendments contain a signature line or a signature for Disney.”

Steele nonetheless insists that the second sentence of the contract establishes a link to Disney. “For purposes of the rights granted herein,” it reads, “and the entities for which services are performed, ‘Productions’ includes Productions’ parent, affiliated and subsidiary companies.” In an oral argument, an attorney for Steele maintained (as summarized by Sicilian), “every parent, affiliated, and subsidiary company of ESPN would be a party to the agreement and an employer of the plaintiff.”

Sicilian found Steele’s reasoning unconvincing. He wrote Steele “cites no authority for its argument that ESPN can bind both Disney and every other entity affiliated with ESPN to obligations it takes on simply by saying that rights under the agreement flow to all of those entities.” He found it more telling that Disney didn’t sign Steele’s contract, and there’s no evidence the company “assented to be bound” by it.

While Disney is no longer a defendant, Steele’s claims against ESPN continue. ESPN’s motion to dismiss has not yet been decided.

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