Fox News Lost the Lawsuit but Won the War
The network will pay $787.5 million to Dominion Voting Systems as the price of retaining its audience.
Updated on April 19, 2023, at 9:57 a.m. ET
It isn’t often that winning $787.5 million is an underwhelming result. But then again, the defamation case of the century doesn’t come around often.
This afternoon, when opening statements were expected in a lawsuit by Dominion Voting Systems against Fox News, the parties announced a settlement with that astronomical figure. The other terms of the deal have not been made public. Dominion had sought $1.6 billion from Fox for lies the network broadcast about the company, which manufactures election equipment, after the 2020 election.
For Fox, the result is costly but bearable. Documents produced in discovery in the case show that Fox saw the aftermath of the election as an existential threat, as members of its audience defected to competitors. Today, Fox’s primacy within right-wing media has been restored and those competitors have faded. The network lost the lawsuit, but it survived and won the war.
“We are pleased to have reached a settlement of our dispute with Dominion Voting Systems,” a Fox spokesperson said in a statement, adding, in a bravura display of passive voice: “We acknowledge the Court’s rulings finding certain claims about Dominion to be false.”
Dominion’s choice to settle comes as a great disappointment to many critics of Fox, and is also probably a smart financial decision. For the critics, this case was about democracy and disinformation and provided an opportunity to hold Fox accountable for years of broadcasting hogwash. For Dominion, it was primarily about business. No matter how lofty the language its spokespeople used, the company didn’t sue to fix the American media landscape.
Imagine if the case had gone to trial, Dominion had won the full $1.6 billion, and then the matter had been caught up in years of costly appeals and wrangling. At best, Dominion would have been able to recover the money years from now; at worst, the award might have been reduced or thrown out altogether. Wiser to take the cash on offer. Whether or not Fox has to make some public apology, the network will presumably be very careful not to defame Dominion again.
None of this is to dismiss the cost to Fox. The settlement is one of the largest defamation payouts in history, and amounts to nearly 6 percent of Fox’s total 2022 revenue. The last-minute sprint to settlement suggests that the company really did not want to put its stars or its executive chairman, Rupert Murdoch, on a witness stand in court. But for Fox, the nine-figure payout has turned out to be the cost of doing business and guaranteeing the network’s existence.
Before it settled, Dominion did the public a service by revealing so much about Fox’s inner workings through the lawsuit. We learned, for example, that the MAGA star Tucker Carlson “hate[d Donald Trump] passionately” and knew that the Trump lawyer Sidney Powell was “lying.” We learned that Murdoch deemed Trump’s lies about the election being stolen “crazy stuff.” Altogether, the evidence appeared to show that Fox knew well that it was broadcasting false and malicious material.
The discovery materials also explained why Fox did so: The company was terrified of losing its audience to smaller rivals such as One America News Network and Newsmax. In the immediate aftermath of the 2020 election, Fox was in the vanguard of reporting reality. It was the first network to call Arizona for Joe Biden, and thus to assert that he would defeat Trump. The network’s reporters, who tend to stick closer to the news than its talk-show hosts, debunked lies about fraud.
The result was an exodus of the viewers who had made Fox into the most powerful news organization in America and by far the leading cable outlet by ratings. For years, some liberals had believed that if Fox simply told the truth, its viewers would change their minds. Instead, they changed the channel.
In their panicked state, Fox’s leaders may not have realized how costly these decisions could be—either to its own finances or to the country, as the January 6 insurrection demonstrated—but they must have understood that they were taking a risk. Fox executives calculated that they could afford to lose anything but their viewers, including a defamation case, and they seem to have been right.
As the discovery materials dribbled out, progressives crowed that Fox’s reputation would forever be damaged by the revelation that the channel was knowingly lying to its viewers. Perhaps on the margins that’s true, but hoping for widespread epiphany is naive. The people most likely to see the damaging information already distrust Fox. The network has pointedly avoided discussing the Dominion lawsuit on air (over the objections even of its top media reporter, Howard Kurtz), and many Fox viewers are so siloed that they are unlikely to hear much about the case. Moreover, it’s been clear for years to anyone who was interested in knowing that Fox lies to its viewers. The viewers either don’t care or refuse to recognize what’s going on.
If Fox can withstand the reputational damage and the monetary cost of the settlement, the real long-term damage from the suit may be that it revealed Fox to be much weaker than it appeared. One theory of Fox is that Roger Ailes recognized a latent interest in news from a conservative perspective and tapped into it. Another is that Fox has constructed a massive, nearly addicted viewership and persuaded it to adopt a particular political worldview. The truth is that these are interrelated: Conservatives were underserved by mass media, but Fox has shown its ability to whip that crowd up and to rally it around particular strains of conservatism.
But the sequence of Trump’s rise and the Dominion suit show that the network isn’t really in charge. Fox resisted Trump’s strain of conservatism at the start of his presidential run, but it was eventually forced to acquiesce. It initially resisted his election lies, but ultimately embraced them. The viewers hold the real power, and Fox is at their mercy. If even upstarts like OANN and Newsmax, with low production values, amateurish personalities, and shoddy content, could threaten Fox’s hold on its audience, then the channel remains vulnerable to challenges from further to the right.
That scares executives far more than any cadre of fancy defamation lawyers ever can—and the lengths that they might go to avoid losing their viewers should scare everyone else.