Welcome to a discussion about the upcoming 5th Revolution in the US, which I’ve titled the “Revenge Revolution.” For more about the Revenge Revolution and the author, Entry #1. Periodically I write a “sense check” to assess whether a revolution in the US is possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US Entry #476 was the most recent “sense check.”
BEGIN ENTRY #477: A few days ago, Dominion Voting Systems agreed to an out-of-court settlement with Fox News. News Corporation, Fox’s parent, agreed to pay Dominion $787 million as part of the settlement for a libel suit brought by Dominion. In addition, Fox had to admit, somewhat tepidly, that it had made false statements, aka lies, on the air about the credibility of Dominion’s voting machines.
By settling out of court, Fox avoided having testify in court CEO, Rupert Murdoch, and several high-profile talking heads. Dominion had evidence that would have forced Murdoch and the talking heads to admit they lied on the air about Dominion as well as lied about the credibility of Trump’s claims the 2020 election was somehow “stolen.”
Following the announcement settlement, a number of lawyers, particularly on cable, began slobbering all over themselves about the unprecedented amount of payment and that other portions of the settlement would put guardrails on Fox’s behavior.
My view? Fox was the winner, not the loser. Dominion was the loser. While the $787 million settlement was unprecedented for a libel case, the $787 million represents a minor hiccup to Fox’s earning stream. Fox will still have a profit for FY2023 and possibly a profit for the quarter in which the settlement is booked. In addition, Fox is likely to slightly increase 30-second ad rates to cover the expense.
The settlement will have virtually no effect on Fox’s audience. Fox viewers are likely to remain loyal. Most will discount any terms of the settlement and many viewers may be unaware of most of the terms, given the limited coverage on Fox.
As far as the settlement controlling lies by Fox’s talking heads – Carlson, Hannity et al – don’t count on it. The Fox staff will train the talking heads to reframe lies as questions or claim in the commentary that they are merely “reporting” on what others have said.
The likelihood of Fox encountering another successful libel suit is very small. The threshold for such suits is very high and Dominion was lucky to have had access to a trove of emails, texts and voice recordings proving Fox was lying. As such, there is no incentive for Fox to change. Per chance, if Fox is facing another lawsuit, bring out the checkbook and buy your way out.
Why did Dominion settle? By not settling, Dominion could have increased its market share. Granted, no “self-respecting” election official in a Republican-dominated district would ever buy a Dominion voting machine. I suspect many Republican-dominated state legislators will introduce legislation to ban any district in the state from purchasing Dominion voting machines. If the Donald says “no” then the legislators must say “no.”
By not settling, Dominion could have gained market share in more Democratically controlled states. Officials in those states could have leaned toward Dominion’s system because the system is credible, and Dominion stood up to Fox and Trump. Now those officials have less incentive to support Dominion. For many of those officials, Dominion’s decision to grab the money and effectively cave into Fox is a reason not to buy Dominion machines.
So, one more time, why did Dominion settle when they had Fox by the short hairs? Even the presiding judge said Fox was not credible. Oh, yes, follow the money. The decision by Dominion may not have been made by Dominion executives, but guess who? Yes, you guessed right – the paragons of ethical behavior. A private equity firm that purchased a portion of Dominion a few years ago.
So, in the end, the private equity firm’s greed forced Dominion management to push aside ethics and principles. While the PE firm got cash and a huge ROI multiple for caving to Fox, the public got nothing. Fox bought its way out on the cheap and also bought the right to continue distorting the truth with no guardrails and little fear of repercussion. Another dagger in the heart of democracy.
As for the future of Dominion, the PE firm will take the money and run, leaving Dominion a wounded player. Let’s hope Dominion recovers. However, don’t be surprised if in the next couple of years Dominion Voting Systems declares Cha11 bankruptcy or ends up being purchased by another company. In the meantime, the members of the private equity firm will probably be watching Fox News.
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