What it means for the network

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Members of Rise and Resist participated in their weekly “Truth Tuesday” protest at News Corp headquarters on February 21, 2023 in New York City.

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Dominion Voting System’s defamation lawsuit against Fox Corp. and its cable TV networks will go to trial in the coming days, but it remains to be seen what, exactly, the lawsuit means for Fox and its business.

Dominion brought its lawsuit against Fox and its TV networks, Fox News and Fox Business, in March 2021, arguing their hosts pushed false claims that Dominion’s voting machines were rigged in the 2020 presidential election that saw Joe Biden triumph over Donald Trump. The trial begins on Monday.

IAC Chairman Barry Diller, who was chairman and CEO of parent-company Fox from 1984 to 1992, said at a media conference hosted by startup Semafor earlier this week that although he thought Fox should lose the case, handing Dominion “a very big reward, ” that the company will just pay the damages and move on.

“What’s it going to do? Worsen [Fox Corp. Chair] Rupert Murdoch’s reputation?” Diller joked.

Fox News sanctioned for withholding evidence in Dominion lawsuit

On its face, the biggest potential consequence for Fox would be a financial hit: The company will have to pay to defend itself against the claims and, if it loses, possible damages to Dominion, upwards of $1.6 billion. No matter the outcome, an appeal is likely.

Fox, which has denied the claims made by Dominion and said it is protected by the First Amendment, has opposed the amount of the damages that the voting machine maker is seeking. The Delaware judge overseeing the case — who ruled a trial was necessary — recently said it would be up to a jury to decide the matter.

business risk

Neither side has shown signs of wanting to settle the case, and the two parties have met once at a court-ordered meeting. But even if they did come to a settlement, Fox would still be on the hook for a steep payment, experts say.

“There could be a lot of implications depending on how it plays out,” said Imraan Farukhi, an assistant professor at Syracuse University’s SI Newhouse School of Public Communications. Besides the financial impact, Farukhi added, “The other question is what will they do with their talent if they lose? The majority of the stars at Fox are implicated. Any other news organization would probably have seen their hosts losing their jobs for improper reporting .”

Lou Dobbs, who is slated to be a witness, saw his weekday program on the Fox Business network canceled the day after he was named a defendant in the defamation lawsuit of a second voting machine company, Smartmatic. At the time, Fox said his show’s cancellation was in the works prior to the lawsuit.

Shows helmed by Tucker Carlson, Maria Bartiromo, Sean Hannity, Laura Ingraham and Jeanine Pirro have been listed as evidence by Dominion. Those hosts also are slated to testify in the Dominion’s case.

On Wednesday, the Delaware judge overseeing the case sanctioned Fox for withholding evidence and reportedly said if deposits or anything else needed to be redone, it would come at a cost to the company.

But the most likely immediate effect on Fox and its bottom line could come in the form of libel training classes for talent and others in the newsroom, as well as an increase in production insurance policies that cover defamatory statements, Farukhi said. Those policies could also help cover the costs related to the lawsuit for Fox.

Still, a near-term financial impact is unlikely to spell disaster for the network.

As thousands of documents have been unveiled in recent months, revealing skepticism from Fox’s top TV hosts and executives about the election-fraud claims that were made on air, Fox News’ ratings have remained stable, according to Nielsen. Similarly, so has the parent company’s stock price.

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Fox Corp.’s stock has remained stable in recent months as evidence implicating its TV hosts and executives have come to light in Dominion’s defamation lawsuit.

Fox News’ steady audience has also ensured that advertisers stick around, too. Oftentimes, companies will pull their ads when TV networks are embroiled in controversy. For Fox, that hasn’t been an issue in its lawsuit battle with Dominion.

“I am hesitant to say how this could implicate their business when it comes to views and sponsors,” Farukhi said. “Their audience and sponsors seem to not really care what the network is being accused of in this case. They only stop viewing Fox when it provides information that is not congruent with their predetermined conclusions.”

Fox Corp. CEO Lachlan Murdoch sounded confident about the network’s future when asked during a March investor conference if he could share anything about the case.

“I think fundamentally what I’ll just say about it is that a news organization has an obligation and it is an obligation to report news fulsomely, and without fear or favour,” Murdoch said at the time. “That’s what Fox News has always done and that’s what Fox News will always do.”

He added that “the noise that you hear about this case is actually not about the law and it’s not about journalism and it’s really about politics.”

No other questions were asked during the conference.

Amendment protections

Fox has continuously denied the claims made against its network and hosts, arguing that the case is about First Amendment protections “of the media’s absolute right to cover the news.” Attorneys have argued that covering the allegations being made by Trump and his attorneys was newsworthy and protected by the First Amendment.

For that reason, the case has been closely watched by First Amendment experts. While it’s difficult to prove a defamation case in the US, many believe there’s enough evidence this time that it could happen.

“The fact that the lawsuit hasn’t been settled yet, and Dominion likely doesn’t want to settle, shows they have a good likelihood of prevailing,” said Gautam Hans, an associate law professor and First Amendment expert at Cornell University. “There’s been a lot of embarrassing, contradictory statements that have come out of the discovery process that even if Dominion loses there will have been pain inflicted on Fox along the way.”

The evidence gathered for the case — which includes text messages, emails and other internal communications between Fox’s executives, TV hosts, producers and others tied to the newsroom — shows those at the network and parent company were skeptical of what was being reported.

The elder Murdoch, the Fox Corp. chair, suggested the TV hosts “went too far,” and said during his deposition that some of the network’s commentators “endorsed” the claims.

Paul Ryan, the former Republican speaker of the House and a Fox board member, told Rupert and Lachlan Murdoch “that Fox News should not be spreading conspiracy theories,” according to court papers.

Fox News host Carlson said in a text message to his producer that pro-Trump attorney Sidney Powell was lying, according to court papers. In other texts, Carlson said, “It’s unbelievably offensive to me. Our viewers are good people and they believe it.”

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