Oprah Winfrey - The Story of an Entrepreneur

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Case Details:

Case Code : LDEN006
Case Length : 14 Pages
Period : 1957-2000
Pub Date : 2002
Teaching Note : Not Available
Organization : Infosys
Industry : Media and Entertainment Countries : Japan

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"Oprah Winfrey arguably has more influence on the culture than any university president, politician, political or religious leader, except perhaps the pope."

- Vanity Fair Magazine, in 1994.

"She (Oprah) may be uncomfortable talking about it (money), but when it comes to making it, she sure knows what she's doing."

- Fortune Magazine, in March 2002.

The Mad Cow Controversy - A Talk Show Queen in Trouble

In mid-1996, Oprah Winfrey (Oprah), one of the world's most well-known media personalities and the host of the 'Oprah Winfrey Show,' was entangled in a major controversy.

The controversy arose because of statements made by Oprah and Howard Lyman (Lyman, a founder member of the Humane Society of the US) during an episode of the 'Oprah Winfrey Show' telecast on April 16 1996.¹

The show, based on the theme, 'Dangerous Food,' talked about the Mad Cow disease² and the threat it supposedly posed to beef consumers in the US.

On the show, Lyman blamed the practice of feeding rendered livestock (protein derived from cattle remains) to cattle for outbreak of the disease in Europe, which resulted in the death of over 1.5 million cattle and 20 people in 1996.

Lyman's statements suggested that beef consumers in the US could also contract the human form of the mad cow disease as a similar practice of feeding livestock was followed in the US. On the show, Oprah swore that she would never eat a hamburger again in her life.

In May 1996, some cattle producers filed a $10.3 million suit against Oprah and Lyman in the Texas state court, under the Texas False Disparagement of Perishable Food Products Act,³ claiming, business disparagement, negligence and defamation. They said Oprah created fear regarding the consumption of beef, when she vowed that she would never again eat a burger in her life.

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1] The discussion panel comprised Oprah Winfrey (Host), Howard Lyman (Executive Director, Humane Society, US), Gary Weber (Representative, National Cattlemen's Beef Association) and Dr. Will Hueston (Representative, United States Department of Agriculture).

2] Mad cow disease, scientifically called 'Bovine Spongiform Encephalophy,' (BSE) is a nervous system disorder. The major symptoms of the disease in cattle are belligerence, poor coordination, confusion and death. According to medical analysts, the disease (in cows) became an epidemic due to the modern farming practices adopted by cattle ranchers, such as feeding cows with rendered livestock. The mad cow disease is linked with a variant of the Creutzfeldt-Jakob disease (CJD), found in beef consuming human beings. This variant is incurable and fatal. It kills its victims by filling their brain with microscopic spongy holes.

3] Under this Act, people can be held liable if they make false and disparaging statements regarding perishable food products.