The fallout from the landmark $787.5-million that Fox News paid to settle the Dominion Voting Systems defamation case continued to reverberate Tuesday as parent company Fox Corp. reported a $50-million loss in the third quarter.
The net loss is a massive swing from $290 million in net income reported during the same period a year ago and underscored the financial toll of the landmark case on the conservative cable news network.
Counting legal fees, the legal settlement with Dominion cost the company $850 million and was the main source of the loss in the quarter, despite an 18% increase in revenues to $4.08 billion.
The Dominion case alleged that Fox News damaged the electronic voting systems company’s reputation when the network repeatedly spread falsehoods about voter fraud in the 2020 election. The aftermath has disrupted the top-rated cable news network.
Just six days after the April 18 settlement, Fox News fired its top-rated conservative host Tucker Carlson.
The network gave no reason for severing ties, but sources close to the company said Rupert Murdoch and other executives had multiple reasons for terminating Carlson.
The evidence and depositions in the Dominion case revealed texts by Carlson that were critical of Fox News correspondents who fact-checked the unfounded election fraud claims on the network, even though he did not believe them himself.
Another factor in Carlson’s ouster, sources said, was a lawsuit against the network by former Fox News producer Abby Grossberg, who alleged she was subjected to antisemitic comments and a hostile work environment while employed on Carlson’s program.
Ratings have plummeted for Fox News in prime time since Carlson’s departure as temporary hosts have appeared in the 8 p.m. Eastern hour where “Tucker Carlson Tonight” was averaging more than 3 million viewers. Even with the decline, Fox News still held a lead over MSNBC and CNN in viewers last week, according to Nielsen data.
“Fox & Friends” co-host Brian Kilmeade and weekend host Lawrence Jones filled in the first two weeks. Kayleigh McEnany, former Trump White House press secretary and co-host of the Fox News daytime show “Outnumbered,” is in the host chair this week.
The hour has lost more than half its audience and on Friday trailed MSNBC and CNN in the 25-54 age group favored by advertisers.
Fox Corp. shares were trading at $31.77 Tuesday afternoon, down 1%.
Fox Corp. Executive Chairman Lachlan Murdoch told analysts in a conference call that the network agreed to the expensive settlement to avoid a long and costly court battle.
“We made the business decision to resolve this dispute and avoid the acrimony of a divisive trial and a multiyear appeal process,” Murdoch said.
Murdoch said there is no plan to alter the direction of Fox News prime-time — where the network’s staunchest conservative commentary occurs — after the departure of Carlson, whose outrageous comments about immigration and race were targeted by critics and scared away many brand-name advertisers.
“There’s no change to our programming strategy at Fox News,” Murdoch said. “It’s obviously a successful strategy. And as always, we are adjusting our programming and our lineup, and that’s what we continue to do.”
Fox News has a track record of sustaining its audience levels after high-profile on-air personalities leave the network involuntarily or otherwise.