Fox News exposes its real interests for $787.5 million

What does Fox really care about to cash out Dominion?

It’s not unusual, nor even unexpected, for two parties about to head into court for trial on a difficult civil case to settle outside the courtroom, so I am not surprised that Fox News and Dominion Voting Systems settled just as the jury was about to be seated.

The amount is an interesting tell here, $787.5 million, which is just under half of what Dominion was seeking ($1.6 billion). I suppose the legal fees for both sides was one factor that kept the trial from proceeding, but I believe Fox News exposed its real interests.

Let’s start with Fox News’ public statement (via USA Today):

"This settlement reflects FOX’s continued commitment to the highest journalistic standards," the statement said. "We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues.”

I think the “acrimony of a divisive trial” is about as deflective a statement as any crisis communications specialist could pen. The acrimony has been there for two years, as Fox News allowed its most popular talking heads to continue feeding viewers conspiracy theories that the 2020 election was stolen, and the at the center of that evidence-free assertion is that Dominion Voting Systems could not be trusted.

CNN reported that the expected witness list would include Rupert Murdoch himself, his son Lachlan, Fox News CEO Suzanne Scott, president Jay Wallace, and the parade of talking heads: Tucker Carlson, Sean Hannity, Maria Bartiromo, Lou Dobbs, Jeanine Pirro and Bret Baier. The texts from Carlson and Hannity, along with other leaked communications were damaging enough, exposing the rank hypocrisy and derision these hosts had for their own viewers. They themselves don’t believe the garbage they were spewing, and knew former President Donald Trump for what he was. And in that, they became exactly what Trump is, selling the same snake oil under the Fox News brand.

Imagine the embarrassment proceeding from those individuals on the witness stand, exposing exactly why they pushed, day after day, what they themselves believed to be lies in order to maintain their ratings, and to make money.

Fox News makes a lot of money. Fox Corp, according to Esquire’s reporting, had revenue of nearly $14 billion, of which $6 billion came from its cable channels. That breaks down as $4.2 billion in “affiliate fees” which cable providers pay Fox to carry the channels, and $1.4 billion from advertisers. You can see very clearly that Fox cares way more about its ability to retain clout with viewers who want to watch its channels than pleasing advertisers.

Advertisers may flee because they don’t want to be tainted by Fox’s toxic content choices. Those companies care about a larger audience. Fox cares mostly about the eyeballs it garners from its most popular shows. So, parading Hannity, Carlson, Bartiromo et. al. in front of cross-examining lawyers is potentially way more damaging to what Fox really cares about—the bottom line—than paying three quarters of a billion dollars to Dominion for the right to preserve those personalities more or less intact without admitting a whole lot.

Of course, CNN and MSNBC are sad that they don’t get to cover the trial. Fox’s cable division made around $2.8 billion net income in 2022, according to Esquire, so it is paying around 28 percent of its profit for that year to buy off Dominion and keep its cash cow.

One of the questions I’ve had was answered by the New York Times: what does the money mean to Dominion Voting Systems? According to that report, Dominion projected $98 million as its total revenue in 2022. So now the company has eight years of revenue coming to its bank account, when it was suing for 16 years of revenue. That will make a tidy return for the company’s owners. Documents provided to Fox News attorneys showed that Dominion had a good cash position, no debt and decent profits. They were trying to prove that Fox News’ lies had no discernible negative effect on the company’s operations. Given that Fox paid up, that argument probably wasn’t going to fly in court.

I like David and Goliath stories when they happen in real life. Fox Corp is a Goliath and Dominion Voting Systems is a David. Goliath has way more to protect, but can afford to protect it. Instead of entering the ring of combat, Fox backed down. This says a lot about where the company’s interests lie, and provides a look into the perverse incentives Fox executives have to keep their viewers happy and paying cable providers for the privilege of watching. Even if those viewers want to be fed a steady diet of what the talking heads—and everyone else—believes to be lies.