Fox News-Dominion settlement doesn't end crisis for Rupert Murdoch's empire

A photo illustration of Rupert Murdoch, Tucker Carlson, Sean Hannity, and Maria Bartiromo

By Meg JamesSenior Entertainment Writer

April 18, 2023 5:52 PM PT

Fox Corp. has settled the defamation lawsuit brought by Dominion Voting Systems, but the company’s troubles are far from over.

Beyond the $787.5-million payout to end the Dominion case, Fox now must contend with a second defamation suit filed by a rival voting machine company, Smartmatic USA, which has demanded $2.7 billion.

And Fox investors also are lining up with their own lawsuits, alleging that Rupert Murdoch and other board members were derelict in their duties by allowing Fox News to promote election lies, which harmed the network’s reputation as a news organization.

Revelations from emails and text messages, disclosed in the court motions, tarnished Murdoch and high-profile hosts, including Tucker Carlson, Sean Hannity and Maria Bartiromo. Murdoch and others privately indicated they knew former President Trump’s “stolen election” claims were bogus, but they appeared to be more interested in protecting Fox News’ big profits than telling the truth to its millions of viewers, according to the court documents.

Tuesday’s resolution spares the 92-year-old mogul; his son Lachlan, the company’s chief executive; and their anchors from the embarrassment of taking the witness stand in a courtroom packed with reporters. There, they would‘ve been grilled about why the network aired lies in service to Trump and his ardent supporters in the aftermath of the 2020 election.

But the settlement — one of the largest payouts ever in a defamation case — marks another stain on Murdoch’s 70-year legacy as a trailblazing mogul who built a global empire from a single newspaper in his native Australia.

The Dominion case was the latest costly scandal for the company, which has spent millions of dollars over the last decade paying victims of phone hacking by Murdoch’s now-defunct British tabloid.

“There’s a huge amount of evidence that Murdoch is not at the top of his game,” Yale University management professor Jeffrey Sonnenfeld said Tuesday. “The best case for him would be to acknowledge that he’s lost control of the Fox-enstein monster that he created.”

Murdoch’s own testimony, given in late January during a deposition on the Fox studio lot in West Los Angeles, hurt the company’s case, Sonnenfeld and others have argued. During that deposition, Murdoch acknowledged that Fox News hosts, including Bartiromo and Hannity, had “endorsed” the lies — far beyond listening passively or pushing back on claims made by Trump’s supporters.

Emails revealed that Murdoch, the company’s chairman, was uncomfortable with the election fraud claim, calling it “crazy stuff” — yet the amplifications of the lies continued.

When asked during the deposition whether he had authority to stop the distortions, Murdoch replied: “I could have. But I didn’t.”

Such acknowledgments suggested Fox News’ leadership was indifferent to the truth, further weakening their standing in the Dominion case.

Murdoch told Fox News chief Suzanne Scott on Jan. 5, 2021 — the eve of Trump’s rally on the Mall in Washington, and the riots on the Capitol — that Fox’s prime-time anchors — Hannity, Carlson and Laura Ingraham — could announce “something like ‘the election is over and Joe Biden won,’ ” Murdoch reportedly said, noting that “would go a long way to stop the Trump myth” that the election was stolen.

Instead, Scott told a lieutenant: “I told Rupert that privately they are all there — we need to be careful about using the shows and pissing off the viewers but they know how to navigate.”

While other news outlets salivated over the details of the case, Fox News largely avoided it in its programming.

Fox News business anchor Neil Cavuto did interrupt normal reporting Tuesday afternoon to announce the settlement and brought media commentator Howard Kurtz on air to discuss the matter.

“We acknowledge the court’s rulings finding certain claims about Dominion to be false,” the network said in a statement. “This settlement reflects Fox’s continued commitment to the highest journalistic standards. 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.”

With Tuesday’s settlement came an end to the damaging revelations.

Court depositions, which had been released, were heavily redacted, prompting some legal experts to speculate that more bombshells could eventually drop.

“Clearly, Fox was paying to make sure the evidence wasn’t going to be publicly displayed,” said Los Angeles trial attorney Ryan Saba. “There was probably a lot more damning information that was about to come out. ... There were a lot of advantages for Fox to settle this case.”

Another major blow to Fox’s case came late last month when Delaware Superior Court Judge Eric M. Davis rejected Fox News’ defense that the stolen-election lies were “newsworthy” because they had been made by the then-sitting president, and thus, protected by the 1st Amendment.

Davis said he would not permit Fox to make that argument during the trial.

“The evidence developed in this civil proceeding demonstrates that [it] is CRYSTAL clear that none of the statements relating to Dominion about the 2020 election are true,” Davis wrote in a March 31 ruling.

Davis also ruled the Murdochs would have to testify, should they be called during the trial, which was expected to stretch well into May.

That left only the issue of whether Fox acted recklessly, or with actual malice — the standard for defamation cases.

“Now, Fox also will avoid a public verdict,” Saba said.

Dominion Chief Executive John Poulos called the huge settlement “historic.”

“Fox has admitted to telling lies about Dominion that caused enormous damage to my company, our employees and our customers,” Poulos said in a statement. “Nothing can ever make up for that.”

Beyond the upcoming Smartmatic case, which also accuses Fox News of defamation in the aftermath of the 2020 election, lawyers representing Fox Corp. shareholders are preparing lawsuits to seize on some of the evidence presented by Dominion.

The first such shareholder lawsuit was filed last week in Delaware.

“Fox executives and hosts knew that Trump’s election fraud claims were ‘really crazy stuff,’ as Rupert Murdoch, the head of the Fox media empire, put it, yet pushed them on air anyway,” according to a lawsuit filed by a Fox shareholder, Robert Schwarz.

“Fox was more concerned about short-term ratings and market share than the long-term damages of its failure to tell the truth,” Schwarz’s suit said. “The board’s decision to chase viewers by promoting the false stolen election claims has exposed the company to public ridicule and negatively impacted the credibility of Fox News as a media organization that is supposed to accurately report newsworthy events.”

It’s unclear whether the settlement will dissuade Fox News viewers from watching the popular channel — or change their opinions about prominent hosts. So far, the Dominion lawsuit has done little to damp the network’s ratings.

The judge announced that the settlement had been reached about three minutes before markets closed. Fox shares closed at $31.20, down 2 cents.

“Fox has done a good job not making any information about this case available on their channel,” former Fox News contributor John Ellis said. “It’s like old East Berlin.”

But the network has a dilemma as Trump is currently leading opinion polls among possible Republican candidates for the 2024 presidential election. And documents that surfaced in the Dominion case show Murdoch and others were ready to put Trump in the rearview mirror.

Carlson, for example, privately acknowledged in his messages that he loathed Trump.

“I hate him passionately,” Carlson said in a text message.

But such statements might not move the needle for Fox News’ core viewership — largely because Fox towers over the other conservative-leaning channels, Ellis and other experts said.

“The fact that Tucker Carlson is under attack by this voting machines company doesn’t really register with the viewers,” Ellis said. “Tucker is their guy.”

Added Saba: “Their viewers will get over it.”

The Dominion case wasn’t the first time Fox News has been accused of leaning into conspiracy theories.

The network provided a platform for previous bogus claims — including Trump’s unfounded assertions more than a decade ago that President Obama wasn’t born in the U.S., or erroneously blaming Seth Rich, a young Democratic National Committee assistant who was fatally shot in Washington in 2016, for the leak of Hillary Clinton’s emails.

Fox News paid millions to the family of Rich to settle that case.