Fox News Will Pay Dominion Voting Systems $787 Million to Settle. What Does That Mean for Fox?
Dominion Voting Systems and Fox News have reached a settlement in the election technology company's defamation suit against the right-wing cable news network. "We acknowledge the Court’s rulings finding certain claims about Dominion to be false," FOX News Media said in a press release Tuesday that celebrated the agreement. "This settlement reflects FOX’s continued commitment to the highest journalistic standards. We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues."
What are the terms of the settlement?
Dominion attorney Justin Nelson told the waiting media outside a Delaware courthouse that Fox has agreed to pay up to $787,500,000 to settle the case. Early reports suggest the network will not be required to address the issue on-air as part of the agreement.
What does a $787 million settlement mean to Fox News?
That's a big chunk o' change, but what does it mean, really, for the news channel? First, it's useful to get a sense of what the network looks like as a corporate entity. Fox News and Fox Business are cable channels under the larger corporate behemoth known as the Fox Corporation. It's publicly traded and has many different shareholders, but co-chairman Rupert Murdoch and his family (including C.E.O. Lachlan Murdoch) have huge stakes in the company. The answer to what $787 million means to Fox News lies in the larger Fox Corporation's annual reports.
In the 2022 report, you can find Fox management's assessment of the financial health of, future outlook for, and risks to the business. (The latter include "negative claims or publicity regarding the Company" and "unfavorable litigation" that "could require us to pay significant amounts.") On page 50, you'll find a breakdown of the company's financials across three divisions: Cable Network Programming, Television, and "Other, Corporate and Eliminations." In this case, "Television" refers to FOX the broadcast network that shows NFL games, while Fox News fits under the cable programming tab.
According to this document, Fox Corp brought in nearly $14 billion in revenue across all its divisions in 2022. Of that, just over $6 billion came from its cable channels. That was up from $5.68 billion in 2021. Fox News Channel gets most of its revenue—$4.2 billion—from "affiliate fees," or the money that cable providers pay to carry it to their customers (us, the viewers). Despite the regular calls for advertiser boycotts, that is a less significant revenue stream for Fox's cable holdings at $1.4 billion. Their bread-and-butter is the money you pay to your TV provider, some of which the provider then pays Fox. The division has also got some significant operating expenses, though: nearly $3.2 billion. That leaves net income—profit—around $2.8 billion for fiscal year 2022.
Or, put another way: the $797 million that Fox has agreed to pay Dominion is around 28% of its cable news profits last year, though those proceeds include earnings from Fox Business (and other smaller holdings) in addition to Fox News itself. The outlook is less rosy for the larger Fox Corporation as a whole, however: the mothership had a net income of just over $1.2 billion in 2022. Meanwhile, the guy who's really calling the shots here—Rupert Murdoch—and his family are worth about $17.5 billion through his stakes in Fox Corp, News Corp, and much else.
What does $787 million mean for Dominion?
The New York Times reported that Dominion projected it would pull in $98 million in revenue for 2022. Its earnings in prior years were far less, but regardless, the company just pulled down at least eight years of revenue in a day.
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