A Blog by Jonathan Low


Apr 20, 2023

Why Fox Won By Settling Its Dominion Lawsuit, Keeping Its Audience Happy

Silos, private equity and lawyers's fees. That's the calculation that drove the Fox-Dominion lawsuit settlement. 

Fox realizes the disinformation it is giving its siloed audience is exactly what they want, meaning an admission of guilt could be more harmful than the minimal cost of settling - a minor percent of its cash reserves alone - and that will be mitigated by tax savings provided for such payments under US law as a "cost of doing business."  Dominion was driven to settle by its private equity minority owners who stand to see their investment in the company compound by @1,500% from the Fox payment. Dominion may now have to get out of the elections business due to Republican hostility and Democratic resentment, but that is not a concern to them. The smiles on those lawyers' faces is less about "winning" than about their fee. JL

Harry Litman reports in the Los Angeles Times and David Graham reports in The Atlantic:

Fox got off lightly given the risks. It can absorb the settlement easily, a reasonable price to avoid the immense damage details of its knowing lies would have occasioned. (And) Dominion's claim for damages was (suspect) given the company’s much smaller net worth. Fox paid a premium to avoid the trial and an unfavorable verdict (because) the network isn’t in charge. Fox resisted Trump at the start of his presidential run, but was eventually forced to acquiesce. It initially resisted his election lies, but ultimately embraced them. The viewers hold the real power, and Fox is at their mercy. Fox saw the aftermath of the election as an existential threat, as its audience defected to competitors. That scares executives far more than defamation lawyers.

LA Times: Dominion Voting Systems’ defamation case against Fox News was settled for $787.5 million at the start of a trial Tuesday. Based on a series of sneak peeks at the damning evidence against Fox developed in pretrial discovery, the lucrative payout wasn’t surprising: The case Dominion was prepared to present was beyond devastating.

The outcome underscored the tension between the public value of litigation and the private interests driving a lawsuit. Dominion had a killer case against Fox that had many eagerly anticipating a measure of accountability for the network’s knowing support of the lie that Donald Trump won the 2020 election. But the company’s $1.6 billion claim for damages looked high. So the case was ripe for a settlement in which Fox paid a premium to avoid a debacle of a trial, serving the parties’ interests more than society’s.

Fox got off fairly lightly given the risks bearing down on it. By most accounts, it can absorb the settlement fairly easily. It’s a reasonable price to avoid the immense damage to its reputation — and consequently its bottom line — that an extended, detailed account of its knowing lies would have occasioned.


Even before the trial began Tuesday, it was clear that Fox had good reason to avoid it. Delaware Superior Court Judge Eric M. Davis had already ruled that broadcast claims that Dominion’s voting machines altered the results of the election were false, vaulting the company over the first hurdle defamation plaintiffs face.

That also would have given Dominion a formidable advantage on the question the parties would have contested at trial: whether Fox aired the statements at issue with “actual malice,” meaning it either knew they were false or recklessly disregarded the question. That’s because many of the statements, by Fox hosts and guests whose claims were presented as well-founded, are ridiculous on their face. The notion that Fox didn’t know they were false would strike any reasonable juror as far-fetched.

If the trial had proceeded, the jury would have heard even more reasons to find actual malice — a lot more. Some of the most damning evidence consisted of behind-the-scenes emails and texts in which network stalwarts such as Tucker Carlson and Laura Ingraham admit that they know the Big Lie is just that. Even News Corp. Chairman Rupert Murdoch acknowledged that some of the network’s personalities had crossed a line. So it’s little wonder that Fox settled the case rather than let Murdoch and others take the stand.

The defenses the company had publicly advanced, moreover, were underwhelming. One was to argue that Dominion “cherry-picked” 20 or so ugly statements that distorted Fox’s generally defensible conduct. But the judge had rightly ruled that defamation must be analyzed statement by statement, rendering Fox’s other statements legally irrelevant. The jury’s attention would have been focused on the offending lies, not the less culpable conduct Fox wanted to highlight.

Fox’s other prominent defense was to wrap itself in the 1st Amendment, arguing that the case threatened “protections of the media’s absolute right to cover the news.” But there is no such right, and Fox’s claim was not only faulty but scurrilous. In the landmark press freedom case New York Times vs. Sullivan, which created the actual malice standard, the Supreme Court made it clear that the 1st Amendment exists to promote truthful reporting in support of an informed electorate. The only reason to tolerate false reporting in the absence of actual malice is to give the press breathing room to go after the facts aggressively without fear of liability for innocent mistakes.

Far from serving the goals of the 1st Amendment, Fox’s knowing and reckless publication of lies undermined press freedom and had a terribly corrosive effect on the country. Even settling for hundreds of millions probably saved the company money in the long run compared with the financial and reputational consequences of a train wreck of a trial.

Dominion had reason to settle too. While its case against Fox was as strong as that of any defamation plaintiff in memory, its claim for damages was less so given the company’s much smaller estimated net worth. Fox may have paid a premium in damages to avoid the sting of the trial and an unfavorable verdict.

Particularly in the face of consequential trials such as this one, the parties’ motivations — including those of the already exhausted legal teams — tend to realign in favor of settling. That’s especially true once serious talks begin.

A Dominion lawyer claimed in the aftermath that the settlement amounted to “a ringing endorsement for truth and democracy,” adding, “Truth has meaning. Lies have consequences.” And the company wasn’t alone in discerning a triumph of sorts against the Big Lie. But all Fox offered beyond the payout was to wanly “acknowledge the court’s rulings finding certain claims about Dominion to be false,” In the absence of any convincing contrition, Dominion’s claim of vindication seems likely to be quickly forgotten.

It was Fox’s mammoth checkbook, not any civic victory, that allowed it to make Dominion an offer it couldn’t refuse, satisfying the plaintiff’s interest regardless of the public’s. That’s an unavoidable consequence of an adversarial system based on the calculations of private parties.

The case did incidentally serve the public’s interest by exposing Fox and its personalities through discovery, but not nearly to the extent that it could have through a revealing and damaging trial. Much of the country was looking to Dominion to vindicate basic offenses against the body politic by Trump and his enablers. Now we have to look elsewhere.

The Atlantic: It isn’t often that winning $787.5 million is an underwhelming result. But then again, the defamation case of the century doesn’t come around often.

This afternoon, when opening statements were expected in a lawsuit by Dominion Voting Systems against Fox News, the parties announced a settlement with that astronomical figure. The other terms of the deal have not been made public. Dominion had sought $1.6 billion from Fox for lies the network broadcast about the company, which manufactures election equipment, after the 2020 election.

For Fox, the result is costly but bearable. Documents produced in discovery in the case show that Fox saw the aftermath of the election as an existential threat, as members of its audience defected to competitors. Today, Fox’s primacy within right-wing media has been restored and those competitors have faded. The network lost the lawsuit, but it survived and won the war.

“We are pleased to have reached a settlement of our dispute with Dominion Voting Systems,” a Fox spokesperson said in a statement, adding, in a bravura display of passive voice: “We acknowledge the Court’s rulings finding certain claims about Dominion to be false.”

Dominion’s choice to settle comes as a great disappointment to many critics of Fox, and is also probably a smart financial decision. For the critics, this case was about democracy and disinformation and provided an opportunity to hold Fox accountable for years of broadcasting hogwash. For Dominion, it was primarily about business. No matter how lofty the language its spokespeople used, the company didn’t sue to fix the American media landscape.

Imagine if the case had gone to trial, Dominion had won the full $1.6 billion, and then the matter had been caught up in years of costly appeals and wrangling. At best, Dominion would have been able to recover the money years from now; at worst, the award might have been reduced or thrown out altogether. Wiser to take the cash on offer. Whether or not Fox has to make some public apology, the network will presumably be very careful not to defame Dominion again.

None of this is to dismiss the cost to Fox. The settlement is one of the largest defamation payouts in history, and amounts to nearly 6 percent of Fox’s total 2022 revenue. The last-minute sprint to settlement suggests that the company really did not want to put its stars or its executive chairman, Rupert Murdoch, on a witness stand in court. But for Fox, the nine-figure payout has turned out to be the cost of doing business and guaranteeing the network’s existence.

Before it settled, Dominion did the public a service by revealing so much about Fox’s inner workings through the lawsuit. We learned, for example, that the MAGA star Tucker Carlson “hate[d Donald Trump] passionately” and knew that the Trump lawyer Sidney Powell was “lying.” We learned that Murdoch deemed Trump’s lies about the election being stolen “crazy stuff.” Altogether, the evidence appeared to show that Fox knew well that it was broadcasting false and malicious material.

The discovery materials also explained why Fox did so: The company was terrified of losing its audience to smaller rivals such as One America News Network and Newsmax. In the immediate aftermath of the 2020 election, Fox was in the vanguard of reporting reality. It was the first network to call Arizona for Joe Biden, and thus to assert that he would defeat Trump. The network’s reporters, who tend to stick closer to the news than its talk-show hosts, debunked lies about fraud.

The result was an exodus of the viewers who had made Fox into the most powerful news organization in America and by far the leading cable outlet by ratings. For years, some liberals had believed that if Fox simply told the truth, its viewers would change their minds. Instead, they changed the channel.

Fox personalities and executives panicked as ratings fell. When one reporter fact-checked a Trump tweet about Dominion, Carlson called for her head. “Please get her fired,” he wrote in a text chat with Sean Hannity and Laura Ingraham. “It needs to stop immediately, like tonight. It’s measurably hurting the company. The stock price is down. Not a joke.” Murdoch pushed journalists involved in calling the election for Biden out of Fox.

In their panicked state, Fox’s leaders may not have realized how costly these decisions could be—either to its own finances or to the country, as the January 6 insurrection demonstrated—but they must have understood that they were taking a risk. Fox executives calculated that they could afford to lose anything but their viewers, including a defamation case, and they seem to have been right.

As the discovery materials dribbled out, progressives crowed that Fox’s reputation would forever be damaged by the revelation that the channel was knowingly lying to its viewers. Perhaps on the margins that’s true, but hoping for widespread epiphany is naive. The people most likely to see the damaging information already distrust Fox. The network has pointedly avoided discussing the Dominion lawsuit on air (over the objections even of its top media reporter, Howard Kurtz), and many Fox viewers are so siloed that they are unlikely to hear much about the case. Moreover, it’s been clear for years to anyone who was interested in knowing that Fox lies to its viewers. The viewers either don’t care or refuse to recognize what’s going on.

If Fox can withstand the reputational damage and the monetary cost of the settlement, the real long-term damage from the suit may be that it revealed Fox to be much weaker than it appeared. One theory of Fox is that Roger Ailes recognized a latent interest in news from a conservative perspective and tapped into it. Another is that Fox has constructed a massive, nearly addicted viewership and persuaded it to adopt a particular political worldview. The truth is that these are interrelated: Conservatives were underserved by mass media, but Fox has shown its ability to whip that crowd up and to rally it around particular strains of conservatism.

But the sequence of Trump’s rise and the Dominion suit show that the network isn’t really in charge. Fox resisted Trump’s strain of conservatism at the start of his presidential run, but it was eventually forced to acquiesce. It initially resisted his election lies, but ultimately embraced them. The viewers hold the real power, and Fox is at their mercy. If even upstarts like OANN and Newsmax, with low production values, amateurish personalities, and shoddy content, could threaten Fox’s hold on its audience, then the channel remains vulnerable to challenges from further to the right.

That scares executives far more than any cadre of fancy defamation lawyers ever can—and the lengths that they might go to avoid losing their viewers should scare everyone else.


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