The Aftermath of Fox News' $787.5 Million Lawsuit Settlement: More Job Cuts

  Fox News had always intended to reach an amicable settlement with Smartmatic in order to prevent a trial with potentially devastating verdicts. The company could have easily lost, as the plaintiffs presented evidence containing numerous emails and texts showing even its stars had knowledge that allegations of voter fraud were baseless. 1. The Aftermath of the Lawsuit Settlement Fox News' settlement with Dominion Voting Systems is an impressive win, but not an endorsement of democracy. One Temple University law professor who specializes in First Amendment issues said it resembled "as close to an apology as Fox can get." Additionally, opting for a settlement over risking an awards based on presumed damages and malice was noteworthy, she stated. Murdoch-owned Fox has been on the defensive ever since their declaration on election night that Joe Biden had won Arizona, inciting Trump loyalists with claims of voter fraud. A lawsuit brought against them presented evidence showing Fox executives were panicked about losing viewers to competing networks, while spreading falsehoods about voting machines "flipping votes for Trump with reckless disregard of truth". Dominion contended that Fox violated federal libel laws with its conduct. The court agreed, narrowing Fox's potential defenses by ruling its claims about election fraud were no longer newsworthy - in a March 31 ruling by Judge David Davis he stated "Fox can no longer claim that their election fraud allegations constitute newsworthy stories since these assertions involve assertions regarding election results". As soon as the case was concluded on Tuesday, Dominion's lawyers called out questions to Fox's counsel as they left court, yet received no answers from them. When leaving, someone with a sign reading "Fox Lies" chased after them as they fled. Dominion's legal team isn't done fighting; they continue their investigation into election-fraud claims against Fox in New York despite the settlement, potentially costing the network billions through verdicts that might later be overturned on appeal. An outcome in the lawsuit would increase pressure on the network to make changes, as evidenced by reports suggesting the Dominion settlement will lead to additional staff cuts at lower-level positions at the network. According to sources who spoke with Rolling Stone, such an action is seen as a means to cut costs so more of the settlement goes directly back into paying affected employees' salaries. 2. The Aftermath of the Trial Settlement negotiations spared Fox News executives and hosts from facing trial on allegations regarding election claims that were later disproven, yet Dominion released significant amounts of evidence - deposition transcripts, internal memos and emails all related to their libel claim in some way - which still paints an adverse picture. Fox was left reeling following its call of Arizona for Joe Biden on election night, which caused cancellations and subscription cancellations that threatened its very survival. On an earnings call in November, Fox CEO Lachlan Murdoch acknowledged "taking a hit in our subscriber base," adding that their distribution agreements with cable companies will soon come up for renewal in 2022. The settlement also allows the network to avoid taking the case all the way up to the Supreme Court, where it could have presented one of the toughest tests of a legal standard that protects journalists from libel suits unless they act with "reckless disregard" for truthfulness in what they write or report. Though the payout will protect Fox from criticism or discourage future lawsuits from being filed, critics maintain the network was still able to escape without having to apologize or retract anything specific. After hearing of the settlement in court on Tuesday afternoon, an angry protester carrying a sign reading "Fox Lies" chased after their attorneys as they left. Temple University law professor with expertise in First Amendment issues believes the network likely paid an upfront premium to avoid having to explicitly apologize for any of their claims, with nearly half of the damages demanded from its lawsuit being recovered - an exceptional performance in any legal battle. But she noted that it remains unclear whether the financial sum included in the settlement represents a "big recovery." She pointed out that there was no specific retraction or apology in this settlement agreement; rather it simply references certain statements made by Dominion in its broadcasts. 3. The Aftermath of the Decision Though $787.5 million may seem like an enormous amount in defamation cases, experts note it won't likely bankrupt Fox News. Their most recent quarterly earnings report showed they had $4 billion cash available and the settlement is likely only a small part of this total amount. Trial would have been risky for both sides, with potential implications for First Amendment interpretation weighing heavily in either direction. A verdict in Dominion's favor could have set an unfavorable precedent; but through settlement Fox is spared the embarrassment of having some of their most popular figures called to testify and face withering questioning by Dominion lawyers - including Rupert Murdoch himself (92 years old), as chairman, along with on-air personalities like Tucker Carlson and Sean Hannity being put through their paces. Experts point out that Fox can use this settlement agreement to avoid incurring the expense of paying back any jury award it might receive if it loses in court, which experts view as potentially tax-deductible expenses as part of running business activities; additionally, Fox can continue deducting premiums it pays for business insurance that covers damages claims. Notably, Fox only settled its liability for broadcasting false election fraud allegations through Dominion; another New York lawsuit filed by voting-machine company Smartmatic alleges they were falsely linked with Dominion and part of an election fraud plot (when in reality, they weren't) and is seeking damages of $2.7 billion from Fox. While some Fox News employees welcomed the decision to settle, others found it distasteful and suggested using its payout for investigative journalism and revival of shows such as Maria Bartiromo, Greg Gutfeld and Jeanine Pirro which had been cancelled or suspended. Furthermore, layoffs have created tension at Fox News as staffers have complained that investigative journalists are being punished while opinion hosts can get away with making inappropriate comments without consequences from management. 4. The Aftermath of the Decision Fox News executives and on-air personalities were spared taking the stand during Dominion Voting Systems's defamation case over false claims of election theft due to its settlement, but released deposition transcripts and internal memos gave plenty of insight into their conversations among themselves. Fox News opinion hosts like Maria Bartiromo, Lou Dobbs and Jeannine Pirro often discussed voting machine companies as the cause for President Donald Trump's defeat; yet evidence indicates otherwise. They blamed these voting machine firms even though Joe Biden won the election through a legitimate electoral process. According to legal experts, plaintiffs seeking to prove libel must demonstrate that a news organization knew or should have known that its statement was false and harmful before airing it or had reasonable grounds for knowing such knowledge and acted recklessly without regard for truthfulness. That can be a high bar to clear; had such claims been proven, Fox News could have faced enormous damage. Therefore, dropping the lawsuit represents a major win for Fox News. However, some staffers fear the decision could backfire in other ways. For instance, they believe opinion hosts who aired election fraud claims will keep their jobs while investigative journalists will be laid off; these unidentified employees assert that opinion hosts are protected because they were held to higher traditional standards at a news organization while reporters did not. Staffers have expressed displeasure at Fox's purported decision to transfer some of its highest-paid employees, believing this signals money-saving before June 30 when Dominion settlement payments must be made. MoffettNathanson analyst Robert Fishman cautions that Fox will likely see little effect from this settlement due to already making over $4 billion before interest, taxes, depreciation and amortization (EBITDA), an indicator of cash flow. Furthermore, due to it being related to conduct in Fox's business or trade activities it would likely qualify for tax deduction.