Andrea Arcia, J.D. Candidate, 2028

When Disney suspended Jimmy Kimmel Live! on September 17, 2025, following the host’s monologue about the assassination of political commentator Charlie Kirk, media outlets framed the decision as a free-speech crisis. That framing, though emotionally charged, misses the real story. Disney’s actions were governed not by the First Amendment—which constrains only government actors—but by fiduciary duties, contractual obligations, and regulatory pressures that shape corporate governance in publicly traded media companies. In the private sphere, where broadcast networks answer to shareholders and federal agencies rather than to the Constitution, it is business law—not the First Amendment—that sets the boundaries of what speech survives.

As a Delaware corporation, Disney’s directors are bound by fiduciary duties established under Delaware common law and Title 8 of the Delaware Code. These duties require directors to act in good faith and make informed decisions that advance the corporation’s interests. When controversy threatens reputation or shareholder value, those obligations create a governance imperative: assess risk, act prudently, and protect the enterprise. The business-judgment rule generally shields boards from liability for informed decisions, except when conflicts of interest, bad faith, or improper motives taint their decision-making process.

Within hours of Kimmel’s September 16 monologue, FCC Commissioner Brendan Carr publicly criticized the segment during a podcast, urging ABC affiliates to refuse carriage and referencing the agency’s licensing authority over broadcasters. The pressure worked. Nexstar and Sinclair, together operating nearly a quarter of ABC-affiliated stations, announced that they would preempt the show. For Nexstar, the stakes were particularly high: the company had recently announced a $6.2 billion agreement to acquire TEGNA Inc., a merger still awaiting FCC approval that would make it the nation’s largest local broadcaster. Facing simultaneous pressure from affiliates, advertisers, and regulators, Disney’s leadership executed a calculated duty-of-care maneuver: a temporary suspension meant to contain cascading risk.

This dynamic exemplifies what scholars at Columbia’s Knight First Amendment Institute call “jawboning”—the use of governmental influence to shape private behavior without formal enforcement. The First Amendment strictly limits direct government regulation of speech, but to the law is less clear when government officials use informal means to persuade, cajole, or strong-arm private platforms to change their content practices. These platforms often have strong incentives to yield to government pressure, especially when billion-dollar transactions await regulatory approval.

Carr’s public condemnation was particularly striking because the FCC lacks statutory authority to sanction broadcast content based on viewpoint. Section 326 of the Communications Act explicitly prohibits the Commission from exercising “the power of censorship” and bars any regulation that would “interfere with the right of free speech.” Yet perception often trumps legality in board deliberations. When agency officials signal hostility and companies have pending transactions before them, fiduciary prudence may warrant factoring in potential regulatory retaliation. FCC Commissioner Anna M. Gomez captured Disney’s predicament in her official statement condemning the suspension: “Even the threat to revoke a license is no small matter. It poses an existential risk to a broadcaster, which by definition cannot exist without its license. That makes billion-dollar companies with pending business before the agency all the more vulnerable to pressure to bend to the government’s ideological demands.” The ACLU was even more direct, stating that ABC “gave the Trump FCC chairman exactly what he wanted” by suspending Kimmel indefinitely.

Suspension offered short-term advantages. It signaled responsiveness to stakeholders, bought time to assess contractual rights, and allowed affiliates and sponsors to recalibrate. Yet extending the hiatus created its own liabilities. Protests erupted outside Disney studios, talent guilds condemned the network, and congressional Democrats accused the company of capitulating to political intimidation. By September 23, the board evidently concluded that continuing the suspension would inflict greater reputational harm than benefit. That reversal exemplified Delaware’s requirement that directors continually reassess risk as circumstances evolve.

Shareholder oversight sharpened those pressures. Section 220 of the Delaware General Corporation Law grants investors the right to inspect corporate books and records for any “proper purpose” tied to their interests as stockholders. Several investor groups invoked that right to obtain internal documentation on the Kimmel decision, seeking to determine whether directors acted for legitimate business reasons or to placate political actors. If the latter, the board could face derivative litigation for breaching its duty of loyalty, a uniquely business-law remedy that operates outside constitutional doctrine.

Contract law compounded the complexity. Standard entertainment agreements include morality clauses permitting suspension when talent brings the company into disrepute. Such clauses grant discretion, not command. They remain subject to the implied covenant of good faith and fair dealing, which ensures decisions advance genuine business objectives. Disney, therefore, had legal permission—but not obligation—to act. The suspension reflected a governance calculation, not a moral verdict. The affiliates’ defection exposed deeper structural tensions in broadcast economics. Unlike cable networks that Disney owns outright, ABC depends on licensing contracts with independently owned local stations. Those contracts, regulated by the FCC, grant limited discretion to preempt network content. When affiliates exercised that discretion, Disney’s contractual leverage proved constrained. The result underscored that modern “speech controversies” in media often unfold through overlapping private contracts rather than public censorship.

Ultimately, the controversy exposes where speech regulation truly occurs in the modern media economy. Constitutional law governs the state; corporate law governs the platforms through which most speech is disseminated. Strengthening shareholder oversight of politically influenced decisions, narrowing morality-clause discretion, and increasing transparency around regulatory jawboning are business-law reforms better suited to protecting expressive diversity than abstract appeals to the First Amendment. In a landscape where the market—not the state—sets the boundaries of expression, the future of free speech will depend less on constitutional doctrine than on the integrity of corporate governance.