Inside Story

Bruised but not yet beaten

A hundred million here, a hundred million there: is it just the cost of doing business for News Corp?

Andrew Dodd New York 21 April 2023 1260 words

Dominion’s lawyers leaving the New Castle County Courthouse in Wilmington, Delaware, after the company’s suit against Fox News was settled on Tuesday. Julio Cortez/AP Photo

Almost immediately after the Dominion defamation ruling this week, competing narratives began emerging in the United States about News Corp’s defeat and what it means for the company. None of them puts News Corp or Rupert Murdoch in a good light.

Politico’s Jack Shafer suggested it was Murdoch rather than the Dominion Voting System company that had somehow emerged the winner, despite the size of the payout. This is what News Corp does to make messes disappear, he wrote. “A hundred million here, a hundred million there, might crimp your finances, but in the Murdoch universe, paying such settlements is just the cost of doing business Murdoch-style.”

The company’s history does suggest settlements are part of the Murdoch modus operandi. As Shafer noted, News paid $US50 million to women who suffered sexual harassment at Fox, another $US15 million to an employee who complained of wage discrimination and $US500 million to a competitor in three separate actions over allegations of anticompetitive behaviour. Of the numerous other payouts, many are subject to non-disclosure agreements. And then there’s the invasion of privacy and other unethical conduct exposed by the hacking scandal in Britain, which the company tidied away by settling with legions of people.

But the Dominion case is different. The quantum of the payout — $US787.5 million, or half the company’s annual profit — is off the scale. It dwarfs the total amount paid during the hacking scandal and is generally seen as the largest defamation payout ever, by anyone, anywhere.

And this could be just the beginning. Another voting company, Smartmatic, is suing Fox for $US2.7 billion and has made allegations similar to Dominion’s. If it also settles for half, then Fox can kiss goodbye to the rest of the year’s profits and much of next year’s as well.

Then there’s a derivative case in which some of the “60 per cent of shareholders who aren’t Murdochs” are suing because they claim Fox board members and managers left them exposed to financial loss. The shareholders will allege that Fox decision-makers failed, despite numerous warnings, in their fiduciary duty to stop the on-air lies. Several cases are likely, all with eye watering amounts at stake. There’s also speculation the company will struggle to find insurance cover in future, or that its premiums will become prohibitively expensive.

The settlement has been a huge news story across the nation’s rival, and often tribal, TV networks. If the coverage I’ve seen is any guide, Murdoch isn’t having a great time in the court of public opinion either. On the relatively progressive MSNBC network, presenters were lining up all day to kick Fox and its on-air presenters, but especially Rupert Murdoch.

The most scathing attack was meted out by one of the network’s hosts, Lawrence O’Donnell, who delighted in pointing out that Murdoch “surrendered today like you have never seen him surrender before.” he claimed that in any other company the boss would be kicked out for the “stupidity” Murdoch had displayed.

O’Donnell argued that Murdoch had failed to provide the most basic oversight, such as insisting hosts issue the magic words “if that’s true” when discussing contested claims on air. He also accused Murdoch of mismanaging the Dominion law suit. If the company was always going to settle, he asked, why didn’t it do so before the chief executive and the most controversial on-air hosts were forced to go on oath and hand over their phones.

On this point, other commentators expressed gratitude to Dominion for pursuing the case long enough to force Fox to disclose all those internal emails and memos. Some even argued this was central to Dominion’s strategy; that it was a kind of gift to the nation and proof that Fox’s behaviour had undermined democracy itself.

The pre-trial documents remain on the public record and will continue to provide fodder for Murdoch-watchers for years to come. They’ve already revealed dozens of embarrassing details, such as high-profile Fox presenter Tucker Carlson’s passionate hatred of Trump despite his on-air adoration. They reveal the cynical culture and radically populist agenda inside an organisation that’s often captive to its own audience’s prejudices.

Over at Fox there’s been barely an on-air mention of the settlement. It was given perfunctory treatment when the network’s media reporter read a corporate statement that ended with the claim that the settlement “reflects Fox’s continued commitment to the highest journalistic standards.” The statement also said, “We acknowledge the court’s rulings finding certain claims about Dominion to be false.”

Back on MSNBC, contributors were quick to point out that an acknowledgement is not the same as an admission. In fact, the statement was little more than an allusion to the fact that judge Eric Davis had already ruled that Fox’s coverage was full of falsehoods. Davis was so convinced that he also ruled this conclusion couldn’t be disputed in the trial.

Observers noted that an acknowledgement also falls a long way shy of an apology, and it quickly became apparent that Fox wouldn’t be issuing one. An intriguing question is how much extra cash News handed over to Dominion to avoid having to say sorry. One suspects quite a lot: when you think about it, an appropriate apology would be quite a mouthful. To do justice to the matter it would have to say something like “Sorry for lying, systematically and knowingly, while trashing the Dominion business and amplifying the conspiracy theories of a president trying to overturn a democratic election and incite insurrection.” I suspect News would pay a lot of money to avoid saying that out loud.

Despite the cost, there appears to be little hope that Fox will change its ways anytime soon. On the day after the ruling, Tucker Carlson was hammering on about the same old issues — the spread of trans culture, the failures of the Biden administration, perceived security threats, the culture wars. As usual, no progressive voices were on hand to temper the fear-mongering. So perhaps Shafer is right? The business may have been bruised, but the business model is still intact.

Since I started writing this article we’ve discovered what the case means for Crikey and the lawsuit brought by Lachlan Murdoch against the Private Media masthead. You may remember that Lachlan’s case centres on Crikey’s decision to publish, and then re-publish, an article that claimed the Murdochs were the “unindicted co-conspirator” in the 6 January uprising in the Washington.

The Dominion case exposed the weakness of Murdoch’s argument. Fox chose not to defend the claim that it knowingly and repeatedly published false information and conspiracy theories that favoured the side advocating an uprising. To be clear, the United States is one of the toughest jurisdictions in which to bring a case against the media. It wasn’t enough that Fox was consistently wrong, Dominion had to prove actual malice by demonstrating a wilful motivation to damage Dominion through its falsehoods. The discovery process revealed that even with that protection Fox would be hard-pressed to defend itself.

The resulting trove of internal Fox documents was a boon for Crikey’s lawyers, who had to make the much stronger case under Australian defamation law that Fox made a concerted effort to undermine public confidence in the election result, contributing to the uprising. We’ve all seen what’s in the memos, and so has Lachlan Murdoch. This morning he bowed to the inevitable. •