Wednesday, March 01, 2023

The Fox That Got Caught

During his recent deposition, Fox News founder Rupert Murdoch admitted his network stars knowingly lied while supporting Donald Trump’s Big Lie about the 2020 election being stolen.

This is bad news for the company’s defense in the defamation lawsuit brought by Dominion Voting Systems, as it appears to meet the legal standard for reckless disregard of the truth.

Therefore, Fox could potentially face damages in the neighborhood of $1.6 billion, a substantial fine for a company with roughly $14.3 billion in annual revenue. But the speculation that this could be the “end” for Fox is wishful thinking.

A large media company like Fox carries massive libel insurance coverage — policies that are in turn resold in smaller chunks throughout the reinsurance industry, so that no one insurer is overexposed in the unlikely event such a large damage is awarded by a court.

Thanks to Murdoch’s testimony and other damning evidence, this may indeed be one of those rare occasions that a media company suffers a loss of this magnitude for defamation, but Fox as an entity should easily survive.

As the insurance industry absorbs the majority of the hit, however, libel insurance rates will no doubt rise throughout the media sector for everybody. Therefore, the sad irony is that Fox’s choice to commit its unspeakable violation of the trust implicit between media and their audiences will hurt everyone else in the business — especially smaller media companies less cushioned against cost increases because they do not have anywhere near Fox’s revenue flow.

(CNN, for example, is only one-seventh Fox’s size, with $2 billion annual revenue.)

If anything good comes of all this, perhaps in the future Fox “journalists” will be forced to adhere more closely to the standards of the profession they purport to be a part of. But that is probably wishful thinking on my part.

Meanwhile, what the rest of us need to worry about is the damage those Fox hosts have done to the system that gives them the freedom to speak in the first place — our democracy. Thanks to Fox, millions still believe the 2020 election was stolen. They were lied to but don’t realize that or maybe they don’t even care at this point.

For them it’s too late. Their belief in democracy is dead. Those of us who still believe in it are badly weakened as a result.

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