Fox Corp held an earnings call Tuesday morning to report on results for its third fiscal quarter.
The financial impacts from the Dominion lawsuit settlement, as expected, were substantial.
Fox Corp chairman and CEO Lachlan Murdoch reported that Super Bowl LVII on Fox generated approximately $650 million in ad revenue, and company revenue increased in overall advertising and distribution in Q3. However, those gains were wiped out by the $787.5 million the media giant had to pay Dominion Voting Systems to settle its defamation lawsuit over Fox News’ false on-air claims that the voting technology company influenced the outcome of the 2020 presidential election.
In light of the settlement and all of the legal expenses incurred, the company lost roughly $54 million in the fiscal quarter.
For reference, Fox Corp earned $283 million in the third fiscal quarter of 2022, which didn’t feature a Super Bowl on Fox. Super Bowls are events which tend to boost profits even more.
Fox’s decision to settle with Dominion was a “business decision,” said Murdoch. The settlement was made “to resolve the dispute to avoid the acrimony of this trial and a multi-year process.”
He added, “the settlement in no way alters Fox’s commitment to the highest journalistic standards across our company, or our passion for unabashedly reporting the news of the day. We’re proud of our Fox News team, the exceptional quality of their journalism and their stewardship of the Fox News brand.
Whether it be our coverage of politics and elections, world events, such as the war in Ukraine, or domestic issues, such as the crisis at the border, our journalists bring compelling news home to our viewers every day. The standards behind this reporting on not only what makes us the No. 1 cable news network, we’re the number one network in all of cable.”
One analyst asked multiple questions that a media reporter might ask — about the Dominion settlement and “future settlement risk” (ie. the lawsuit with Smartmatic that could go to trial in 2025) as well as whether Tucker Carlson‘s exit will affect Fox News primetime plans.
Murdoch said he was limited about what he could say about any ongoing litigation, but echoed sentiments expressed in the prepared remarks he made towards the top of the call, including the argument that what Fox News did in amplifying false election claims about Dominion made by associates of then-President Trump was simply “covering newsworthy events of the day,” and that the network’s on-air coverage should be protected by the First Amendment.
“As we’ve stated many times, we always acted as a news organization reporting on the newsworthy events of the day. We certainly included allegations being made by the sitting President of the United States and his lawyers in the aftermath of a hotly contested presidential election,” said Murdoch. “And we have been and remain confident in the merits of our position that the First Amendment protects news organizations reporting on allegations being made by a sitting president of the United States.”
The Delaware Superior Court Judge Eric Davis previously rejected Fox’s argument, and Murdoch said the rejection of that argument “severely limited our defenses” leading up to the trial.
In light of Judge Davis’ rulings, Murdoch said that settlement was “the best course of action for the company and its shareholders … instead of proceeding with a six week trial, and potentially two or even three years of appeals.”
Murdoch remarked that Smartmatic’s $2.7 billion defamation case against Fox is “fundamentally different,” and added “our full complement of First Amendment defenses remain. And we’ll be ready to defend this case surrounding ‘extremely newsworthy events’ when it goes to trial.” It appears no settlement between these two parties is on the horizon.
The Fox chair added that the Fox News primetime programming strategy will not change in the wake of Carlson’s exit.” However, “as always, you know, we are adjusting our our programming and our lineup and that’s what we continue to do.”
Murdoch also said that some advertisers are returning to the daypart: “We are pleased with the strength of the advertising demand.”