Fox Corporation, a major US TV company, recently announced a loss of $54m for the first quarter of 2023. This disappointing result is largely due to a costly settlement that the company agreed to pay in a high-profile defamation lawsuit, Entrepreneurng.com.
The lawsuit concerned claims that Fox News defamed electronic voting systems supplier Dominion following the controversial 2020 US presidential election.
In total, Fox agreed to pay $787.5m to settle the Dominion lawsuit. The loss of $54m was primarily due to the associated legal settlement costs at Fox News Media.
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“On an earnings call with analysts, Fox Corp CEO Lachlan Murdoch stated that the settlement was a “business decision to resolve the dispute and avoid the acrimony of this trial and a multi-year appeal process.”
“The defamation case was closely watched and settled just before opening statements were to be read in a Delaware court. Murdoch stated that “the Delaware court severely limited our defenses and trial through pre-trial rulings.”
While Fox has settled the Dominion case, the company is still facing a $2.7bn lawsuit from Smartmatic, another voting machine manufacturer. Murdoch noted that this case is “fundamentally different” from the Dominion lawsuit and predicted that it won’t go to trial until 2025.
Despite the loss, Fox earnings increased 18% to $4.08bn in the first quarter of 2023, exceeding analysts’ expectations.
This was largely due to a 43% increase in Super Bowl advertising revenue, which the company had earlier predicted would generate $600m in ad revenue. Murdoch stated that the company is “well-positioned” to withstand the ongoing WGA writer’s strike, which has impacted new film and TV production in Hollywood.
“We think that with our strategic priorities and strategy in sports, but also in news, these are two areas that are not affected by the writers’ strike and the audience will pivot when watching television to those categories,” said Murdoch.
He added that Fox Network only programs two hours of scripted and unscripted content entertainment a night, “so we feel very well positioned there not to be affected by the writers’ strike really at all.”
Fox has indicated that it’s looking for merger-and-acquisition targets after calling off a plan to merge with newspaper division News Corp. The company has also authorized a $3bn increase to a $7bn stock-buyback plan.
Last month, Fox News fired its most-watched primetime host Tucker Carlson, causing the company’s stock to drop by $590m and its ratings to suffer. Murdoch stated that there is “no change to our programming strategy at Fox News,” suggesting that Carlson’s firing was a tweak in the company’s strategy, not a departure.
“We’re proud of our Fox News team, the exceptional quality of their journalism, and their stewardship of the Fox News brand,” said Murdoch.”
However, he skirted the issues that led to the Dominion lawsuit, saying that Fox always acted as a news organization reporting on the newsworthy events of the day.
“He remained “confident in the merits of our position that the first amendment protects a news organization’s reporting and allegations being made by a sitting president of the United States.”
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Although Fox News did not offer any direct admission of wrongdoing in its airing of false election claims, it did acknowledge “the Court’s rulings finding certain claims about Dominion to be false” as part of the settlement agreement, as earlier reported by the guardian.
