Will a $787M US hit change Fox News? Don't bet a dime on it

Exactly 50 years ago, Rupert Murdoch bought his first U.S. newspaper, espousing a lifelong credo that would make him a world-shaping media baron.

"We're not here to pass ourselves off as intellectuals," the Australian mogul told a U.S. reporter soon after his 1973 purchase of the San Antonio Express-News.

"We're here to give the public what they want." 

He gave them fact-twisting sensationalism and pearl-clutching tales of crime and immorality. The paper's managing editor would wander through the newsroom and sing out, "This isn't journalism. This is show biz," said a profile in Texas Monthly in 1976.

That profile ended with an observation: "A horrifying fact, for those whose hearts throb with civic loyalty, is that Murdoch's formula is working." 

It worked so well that Murdoch wound up as possibly the most prominent media owner on Earth, with just one property, Fox News, dominating U.S. cable-news ratings and holding unparalleled influence in American conservatism.

That credo has now led to an unprecedented punishment. 

In the aftermath of the 2020 U.S. election, the stars of his network, and its executives, were obsessed, according to court records, with not disappointing the audience, and they avoided declaring the simple truth that Joe Biden won.

The result is a costly golden anniversary for Murdoch's half-century career as a U.S. media proprietor: $787.5 million. (All figures in U.S. funds.)

That's the amount Fox News and its parent Fox Corporation have agreed to pay a Canadian-founded voting-machine company, Dominion Voting Systems, in a last-minute attempt to avoid an embarrassing defamation trial.

Fox News also admitted in a statement to making false claims about those voting machines, over a period of weeks when some network figures peddled wild conspiracy theories.

"[This] represents vindication," said Dominion lawyer Justin Nelson.

"The truth matters. Lies have consequences."

Within limits. Fox hasn't actually apologized, barely mentioned the settlement on its airwaves, and in a statement boasted about its high journalistic standards. The lawyer, Nelson, cautioned that disinformation remains an existential threat to democratic self-governance and conceded this litigation will not solve all problems.

The settlement, in perspective

Basic numeric literacy emphasizes this point.

Anyone expecting Fox News to turn on a dime and start pushing back when Donald Trump continues to claim he won the 2020 election might want to check the math.

Yes, $787.5 million is a lot of money, nearly half what Dominion was suing for. And the losses could get worse with an even bigger suit by another voting-machine company.

Dominion lawyers outside a Delaware courthouse on Tuesday suggested more suits were forthcoming, with one cryptically adding: "We'll see you at the next one."

But let's put that $787.5 million settlement figure in context.

It corresponds to approximately four per cent of the annual revenues of Fox News' parent company, which was trending toward $18 billion this year according to the most recent quarterly earnings.

It's not even equivalent to one rocky day on the stock market. Certainly not when the network has angered Donald Trump.

Dominion was preparing to argue in court that Fox News knowingly peddled lies for money. If the audience wanted election lies, that's what it would deliver.

That intent is illustrated in some exchanges Dominion submitted to the court.

Falling stock prices

Star host Tucker Carlson at one point suggested a reporter should be fired for fact-checking Trump's claims: "It's measurably hurting the company. [Our] stock price is down," he said in a text conversation with co-workers, according to court documents.

It's true.

In just one day, after a Trump tweet, Fox Corp. stock plummeted as much as six per cent, and as much as 12 per cent over a multi-day period in late 2020, after Trump tweeted complaints about the network's insufficient loyalty and said he'd switch to rival Newsmax. 

That 12 per cent dip is worth more than $2 billion, based on the Fox Corporation's current market valuation.

In other words: being on the outs with Trump is a far bigger threat, in sheer dollar terms, than whatever Dominion was awarded.

Fox News feared losing his supporters as viewers, court documents have shown. And you could see them drifting away at the time, even in scenes at a Trump rally right after the 2020 election.

Trump supporters in Georgia screamed at a Fox News crew. They were angry Fox had declared Biden won the state of Arizona, and the election. 

Another man walked past the media pen at the rally and turned to the journalists to shout the name of a Fox News rival, Right Side Broadcasting Network.

People also stood to get pictures taken with Scott Presler, a more ardent election denialist and frequent commentator on another rival network, One America News Network.

The audience, in late 2020, was ready to move on, said Dylan Byers, a longtime media writer and founding partner at the news site Puck.

"[Murdoch] fed the lies, he fed the conspiracies, he fed the partisan vitriol — now it's gotten to a point, in Frankenstein fashion, where he is almost at the mercy of what he's created," Byers told the Bulwark podcast.

"If he doesn't continue to give them what they want… he fears losing his audience," he said, adding that what the audience wants "is becoming crazier and crazier, and more and more conspiratorial."

Fox News has managed, in reaching a settlement, to avoid having its senior staff appear on a witness stand.

They were on the verge of being grilled by Dominion lawyers who argued the network knowingly, repeatedly, maliciously and intentionally lied about voting machines.

'What a disaster'

That last detail — intent — is key. In order to protect a free press from being harassed and sued into oblivion, the U.S. Supreme Court declared in 1964 that a successful libel suit requires evidence the journalist acted with malice, aware of a falsehood.

Dominion's legal submissions include emails where Murdoch referred to Trump lawyer Rudy Giuliani's conspiracy-mongering about those machines as "stupid," "damaging" and "terrible."

Fox News' own internal research department, called "the Brainroom," called claims about Dominion machines unfounded or 100 per cent false.

Carlson said Trump adviser Sidney Powell is a "crazy person" and "cruel and reckless" for her "totally shocking" lies which gave Trump supporters, he said, false hope he might remain president.

Another primetime star, Laura Ingraham, called Powell "a complete nut." Host Dana Perino said she was losing sleep over the "nonsense" being churned out on the network.

The network allegedly warned its staff: Don't say these things on the air.

Emails submitted to the court show company executives imploring its reporters to avoid saying things that might offend the audience.

One former Fox News star took a shot at the company for abandoning the most elemental journalistic principles. 

Bill O'Reilly said the network had allowed the pursuit of profits to override its responsibility to report honestly. He contrasted that with his own willingness, on his website, to conclude Trump had lost the election, even if, he said, it cost him over 1,000 premium subscribers. 

He predicted the network will survive but will face a painful series of lawsuits. 

"What a disaster," he wrote. "The nightmare will continue." 

In a sense, the case already felt a bit dated, even before it was set to begin.

According to preliminary evidence, Carlson wrote texts saying that he hates Trump, and he called him a "demonic" force in American life.

For months, Trump was virtually banned from Fox News, as Murdoch made clear his preference that Trump might disappear.

But it's almost election time again. Trump is front-runner for the Republican nomination. And there he was again last week, interviewed on Fox's top-rated show.

And there was the top-rated host, Carlson, praising Trump. Calling him moderate, sensible and wise. He avoided pushing back, interjecting or contradicting his subject, like most interviewers would.

In the end, it's what his public wants.