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Nevilledog

(51,157 posts) Wed Apr 19, 2023, 02:51 PM Apr 2023

The Dominion Settlement Is Just the Beginning of Fox and Rupert Murdoch's Nightmare

https://time.com/6272910/dominion-settlement-fox-news-nightmare/

Forget the repetitive media chatter debating the political and societal wins and losses over the historic record $787.5 million settlement between Fox News and Dominion Voting Systems, after the voting machine maker alleged defamation by the cable network for promoting false news stories that Dominion rigged the 2020 presidential election against Donald Trump. Fox settled out of court at the last minute, seemingly panicked over the prospect of a dazed 92-year-old Rupert Murdoch, CEO of Fox News parent company Fox Corporation, having to take the stand to explain how he lost control of his prized creation—his “Foxenstein” monster. But while it’s a historic and record-setting amount to pay to avoid an embarrassing public trial over the airing of an admitted lie, the settlement doesn’t mark the end of Fox’s or Murdoch’s nightmare.

The horror story that is just beginning to unfold and that will continue to haunt the company and its patriarch is the corporate governance catastrophe this case leaves in its wake and the punctured business bravado of the scorching public record of admitted fraud and negligent management oversight. Fox’s celebrity anchors already soiled themselves in emailed evidence revealing they did not believe what they were reporting as truth. Their testimony and emails are in the public record for future litigants. Meanwhile, the judge’s special master, investigating fraudulent representations by Fox and its lawyers in discovery, continue undaunted by this settlement. The rest of Murdoch’s life and the rest of the careers of his board will likely be defined by ongoing fallout.

The Big Winner

There is no disputing that this is a grand slam for Dominion and nothing short of a transformative business success. Dominion is a tiny young company not even 1% the size of Fox, and it was sold to private equity investors Staple Street Capital for just about $40 million in 2018. This week’s settlement is gigantic—more than eight times their company revenues last year of $98 million, which assuming a 20% profit margin means that the settlement results in a whopping 5000% boost in the company’s earnings.

Such a whopping settlement may not have been awarded by a jury in court and very well could have been tossed on appeal. This small a company would have had a tough time proving concrete economic damage and lost revenues equivalent to $787.5 million let alone the $1.6 billion in damages they were seeking had it gone to trial. There are two types of damages—compensatory and punitive—and the idea that a company that may have been valued by its own investors, according to Fox’s lawyers, at no more than $80 million could get anything close to 10 times that as compensatory damages is blatantly ludicrous, while punitive damages are becoming increasingly pegged to the value of compensatory damages.

*snip*