Fox News is unlikely to feel the pinch from its record $787.5 million payout to Dominion
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- Fox agreed to a $787.5 million settlement with Dominion Voting Systems on Tuesday.
- The stunning figure is nearly half of the damages for which Dominion sued.
- But a senior media executive told Insider that insurance typically handles these types of payments.
Fox News settled Dominion Voting Systems' blockbuster defamation lawsuit on Tuesday afternoon, agreeing to a stunning $787.5 million payout — the largest publicly known settlement in a US defamation case.
The whopping figure is unlikely to run the multi-billion dollar corporation dry, however. Fox Corp. had nearly $4.1 billion of cash on hand, according to comments made in February by company CEO Lachlan Murdoch. Fox Corp., which also owns assets such as the broadcast network and streamer Tubi, has a market capitalization of $17.61 billion as of Tuesday.
"This is a staggering amount even for a company like Fox and hugely embarrassing," one former Fox executive, who didn't want to speak publically about the company for professional reasons, told Insider. "And there's unlikely to be any accountability for what happened."
A senior media industry executive who could not speak publicly due to company policies, also told Insider the Tuesday settlement figure appeared "really outsized" by any standards of legal payments in the media industry. But, by contrast, "the reputational risk for Fox was big."
The news network is no stranger to large legal settlements and payouts, which it has frequently agreed to in order to deal with controversies and bury scandals. Fox News paid anchor Gretchen Carlson $20 million to settle harassment claims. In 2017, Fox also agreed to a $90 million "derivatives" settlement against company officers over sexual harassment issues at Fox News, according to Reuters.
Despite the looming settlement number, the Fox Corporation could ultimately escape relatively unscathed financially. The media source told Insider that insurance typically covers these types of agreements.
Fox News representatives and attorneys declined to answer Insider's questions on their libel insurance.
It was not immediately clear on Tuesday how Fox will handle the payout, but back in 2013 when shareholders sued the News Corp. board for not providing more oversight of the newspaper operation, which was accused of hacking the phones of celebrities, insurance paid out the $139 million settlement, according to Reuters. Fox was later spun out of News Corp into a separate company.
The Tuesday settlement came just as Dominion and Fox News were about to begin opening arguments in the case, which saw the former suing the latter over Fox's false claims that Dominion's voting machines manipulated the outcome of the 2020 presidential election.
Dominion CEO John Poulos called the settlement "historic" in a statement, highlighting Fox's admission to "telling lies" about the company that "caused enormous damage."
Meanwhile, Fox said in its own statement that it was "pleased to have reached a settlement," which it claimed represented a commitment to journalistic standards.
Fox undoubtedly avoided the embarrassment of further internal secrets being publicized by skipping a trial. But the company still faces a $2.7 billion defamation lawsuit from Smartmatic, a voting software company suing the company for airing false reports suggesting the company had rigged the 2020 election.