Fox Corporation's board members and executives accused of prioritizing viewership
New York City pension funds and the state of Oregon have taken legal action against Fox Corporation, alleging that the media giant allowed its subsidiary, Fox News, to spread false information about the 2020 election. The lawsuit, filed in the Delaware Court of Chancery, claims that Fox Corporation's failure to maintain journalistic standards resulted in defamation cases that harmed shareholders.
The lawsuit accuses Fox Corporation board members and executives of prioritizing viewership, stating that they invited "robust defamation claims, with potentially huge financial liability and potentially larger business repercussions.”
This follows Fox’s recent $787.5 million settlement in a defamation lawsuit brought by Dominion Voting Systems.
“Fox’s board of directors has blatantly disregarded the need for journalistic standards and failed to put safeguards in place despite having a business model that invites defamation litigation,” said New York City comptroller Brad Lander, as quoted in CNN. “A lack of journalistic standards and a proper strategy to mitigate defamation has clearly harmed Fox’s reputation and threatens their bottom line and long-term profitability.”
“The board of Fox Corporation took a massive risk in pursuing profits by perpetuating and peddling known falsehoods,” Oregon attorney general Ellen Rosenblum said.
The New York City pension funds held 857,000 shares of Fox Corporation stock valued at $28.10 million, while the state of Oregon held 226,315 shares valued at $5.2 million, a spokesperson for the New York City Comptroller’s office told CNN.
Experts had long warned that Fox Corporation could face shareholder lawsuits due to management decisions that left the company vulnerable to legal action. Fox Corporation's leadership team, responsible for the contentious 2020 election coverage, remained unchanged until recently when the company announced the departure of Viet Dinh, its chief legal officer overseeing the legal strategy against election-related lawsuits.
“We are shareholders at a company that, unfortunately, has a longstanding practice of allowing conspiracy theories that its executives and its board know are false to be repeated over and over and over again, despite the very clear and present risk of defamation lawsuits eroding shareholder value,” Lander said, as quoted in The New York Times. “And there has been no effort to make governance reforms.”
The NYC pension funds' complaint does not outline a specific damages amount, but Lander emphasized the need for the company's board to “make the shareholders whole.” In addition to seeking damages, the funds are also pushing for governance and ethics reforms within the company, he said.
According to Lander, all five of the city's pension funds unanimously supported participating in this legal action.
“There are plenty of Fox News watchers among the 750,000 retirees and future retirees,” Lander said. “But nobody likes losing their money as a result of preventable lawsuits.”
“The directors’ choices exposed themselves and the company to liability and exposed their shareholders to significant risks. That is the crux of our lawsuit, and we look forward to making our case in court,” said Rosenblum.
