Fox News faces an existential challenge

(Image credit: Photo by Jason Koerner/Getty Images for MoveOn Political Action)

published 14 April 2023

Fox News sits largely comfortably atop the crowd of cable news outlets when it comes to the sheer number of eyeballs aimed at television screens on any given day. That it has become an influencer of conservative sentiment perhaps even surpassing its role as a chronicler of conservative news is a sign of just how uniquely powerful Fox is within right-leaning media.

Nevertheless, Fox has been struggling of late — not in viewership, but under the looming shadow of a potentially seismic ruling for Dominion Voting Systems in that company's defamation lawsuit against the network over having aired false "stolen election" conspiracy theories in 2020. Beyond the monetary threat that suit represents, Dominion's case against Fox has opened the door for a host of separate but interrelated dangers to the network. And this week, several of those threads converged to deliver Fox one of its most existentially challenging stretches in recent memory.

On Tuesday, Fox Corp. shareholder Robert Schwarz filed a derivative action lawsuit in Delaware against network owner Rupert Murdoch, his son Lachlan, and several other members of the Fox Corp. board. In it, Schwarz claimed that by broadcasting former President Donald Trump's various 2020 election lies, Fox News had "exposed the Company to public ridicule and negatively impacted the credibility of Fox News as a media organization that is supposed to accurately report newsworthy events," according to the text of the suit obtained by NBC News.

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While separate from Dominion's suit, Schwarz's case relies on similar, if inverted logic; rather than arguing that Fox's actions hurt others, as Dominion has claimed, he says that the decisions by Murdoch and company have hurt Fox itself — against their obligations to shareholders like him. And although Schwarz is the sole plaintiff in his suit, Bloomberg reported recently that there may be other, similar derivative action claims coming from his fellow shareholders, with two firms — Scott+Scott Attorneys at Law LLP and Berger Montague — looking into the revelations uncovered during the Dominion case to determine whether the Fox Corp. board was in breach of fiduciary duties to its investors.

Just one day after Schwarz filed his lawsuit, Delaware Superior Court Judge Eric Davis announced he would be imposing sanctions against Fox for withholding evidence in the ongoing Dominion lawsuit, claiming the network had made "misrepresentations to the court." Among them: obfuscating Murdoch's corporate role within the various nested entities he owns, as well as not producing various items requested during the discovery phase of the lawsuit until the last minute. At the least, he declared, "Fox will do everything they can" to accommodate any future depositions needed as a result of the alleged subterfuge, adding that "it will be at a cost to Fox." The case is scheduled to go to trial next week.

Explaining he felt "very uncomfortable right now" presiding over a case in which Fox attorneys may have misled him, Davis also suggested appointing an independent Special Master to investigate the extent of Fox's alleged deceit. That figure would also help recommend any further sanctions against the company. Attorneys for Fox this week said that "nobody intentionally withheld information" from Davis or Dominion's legal team.

Despite privately considering Trump a "demonic force," a "destroyer," and someone whom he hates "passionately," Fox News' Tucker Carlson rapturously welcomed the former president back in his good graces this week, with a fawning interview on his eponymous Fox Nation program — one which garnered as many headlines for Carlson's whiplash-inducing about-face as anything Trump actually said. "There's a certain savory joy watching Tucker kow-tow to Trump after seeing his private emails describing his contempt and hatred for the man," Talking Points Memo's Josh Marshall quipped on Twitter, echoing Media Matters' Kat Abughazaleh, who called the interview an "an hour-long exercise in complete humiliation for Tucker." Tonight Show host Stephen Colbert meanwhile marveled at Carlson's "impressive flip-flop" while fellow late-night host Jimmy Kimmel called the interview "a 40-minute blabfest."

"[Carlson is] terrified because three weeks ago, we found out he'd been texting his co-workers about Trump saying, 'I hate him passionately,' he's 'a demonic force,' he's 'a destroyer, he's not going to destroy us,' 'I've been thinking about this every day for four years.'" Kimmel joked. "And then, after thinking about it for four years, Tuck sat down with the demonic force and slobbered all over his Christmas ornaments."

The interview, as Darcy concluded, goes to show what a tricky tightrope Fox will be walking in the coming presidential election, as the multitude of lawsuits looms over the network's effort to retain Trump-loving viewers. It remains to be seen whether the series of hits will influence the network's approach to yet another Trump run for office or potentially damage its standing as the king of cable news.

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Rafi Schwartz has worked as a politics writer at The Week since 2022, where he covers elections, Congress and the White House. He was previously a contributing writer with Mic focusing largely on politics, a senior writer with Splinter News, a staff writer for Fusion's news lab, and the managing editor of Heeb Magazine, a Jewish life and culture publication. Rafi's work has appeared in Rolling Stone, GOOD and The Forward, among others.