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Tuesday, April 18, 2023

Welcome to another special edition of Reliable Sources. It has been a whirlwind day in Wilmington, where the media defamation trial of the century was on the precipice of starting, until it was not.

THE A1

The Price of Lies

CNN Photo Illustration/Mary Altaffer/AP

The Big Lie came at a big price.

The astonishing last-second $787.5 million settlement between Fox News and Dominion Voting Systems, which came after the jury had been seated and on the brink of opening statements Tuesday, served as stark reminder that lies have consequences.

The country suffered the consequences of Donald Trump's election lies on January 6th. And Rupert Murdoch suffered the consequences of those same lies on April 18.

But while it is the largest publicly known defamation settlement by a U.S. media outlet ever, the hefty price tag won't be enough to change Fox News at its core. The right-wing talk channel still sows doubt about the 2020 election to this day. And I'm told by sources that the settlement it reached with Dominion will not require its dishonest personalities to acknowledge reality and issue retractions on the air.

Instead, Fox News will walk away with only having to "acknowledge" its lies in the weaselly worded statement it put out as its lawyers quite literally fled the courthouse while reporters sprinted down the street after them.

"We acknowledge the Court's rulings finding certain claims about Dominion to be false," the network said, before having the gall to add the settlement "reflects Fox's continued commitment to the highest journalistic standards."

Of course, the Dominion lawsuit revealed precisely the opposite. In some ways it is fitting that the statement Fox News issued as a result of its dishonest conduct was dishonest in and of itself.

The case exposed Fox News as a dishonest organization like never before. It's hard for any fair-minded observer to consider the channel as anything other than a propaganda profit machine void of the most basic ethics. The case shredded to pieces the little that remained of the talk channel's credibility.

Some observers hoped this case would proceed to trial, bringing with it accountability and exposing the network even more. It unquestionably would have been an excruciating several weeks for Fox News. The channel's highest-ranking executives and biggest stars, such as Tucker Carlson and Sean Hannity, would have been forced to confront how lies they never believed were promoted on the network's air to its millions of loyal viewers.

Outside the embarrassment Fox News would have suffered, the settlement also spared the company and its executives of being bound by the laws of reality during trial. Normally, Fox News sails through controversy by distorting the criticism it faces and attacking "the media." That time-tested playbook would not have worked in court, where the judge would have forced the network's lawyers to present the jury a fact-based argument. In other words, the network would have been forced to enter the true No Spin Zone. And that's always been a No Go Zone for the channel when confronting crises.

But it is important to note that this was only the first of Fox News' legal problems stemming from its mendacious conduct in the wake of the 2020 election. Another voting technology company, Smartmatic, is still suing Fox News, demanding $2.7 billion for the "disinformation campaign" it waged against its company.

"Dominion's litigation exposed some of the misconduct and damage caused by Fox's disinformation campaign," the company's lead attorney, Erik Connolly, said in a statement after the Fox-Dominon settlement was announced.

"Smartmatic will expose the rest."

IN THE FOX HOLE

I reached out directly to Rupert and Lachlan Murdoch on Tuesday night to see if they had anything more to say about the settlement. They didn't respond.
One senior Fox News journalist, however, described to me how they felt upon learning of the settlement: "Like I just walked into the movie theater and dropped the popcorn on the floor," the person said.
"One of the ugliest and most embarrassing moments in the history of journalism": Jake Tapper laughed as he read Fox News' statement, saying it was "difficult to say with a straight face." (CNN)
It's not just Tapper candidly speaking out. Former Fox News king Bill O'Reilly described on Tuesday his former network's 2020 coverage as "foolish." O'Reilly said, "This is what happens when money becomes more important than honest information." (O'Reilly)
"The size of the payout ... speaks to both the journalistic atrocities and the reams of internal correspondence that Dominion pried from Fox News during the pretrial maneuvering. And yet: It all feels a bit empty," Erik Wemple wrote. (WaPo)
"Fox News may not have admitted it lied, but the proof is in the payout: The network paid nearly $1 billion to avoid having its own false claims laid bare before a jury," Aidan McLaughlin wrote. (Mediaite)
Media law professor Jonathan Peters: "I can't help but think ... about the significance to Fox of not having to acknowledge, on air, that the network spread falsehoods." (Twitter)
Fired-Fox News politics editor Chris Stirewalt wondered to Max Tani: "Who gets fired?" (Semafor)
Fox and Dominion "engaged a mediator from dispute-resolution provider JAMS, Jerry Roscoe, who was on vacation in Romania and worked over the course of a day to bring about a deal Tuesday afternoon," Erin Mulvaney, Joe Flint, and Isabella Simonetti reported. (WSJ)
"It was less surprising that Fox settled than that it did so at such a late stage on Tuesday," Jim Rutenberg and Katie Robertson wrote. (NYT)
"Fox News's last-minute settlement with Dominion Voting Systems on Tuesday earned banner coverage on every television news network but one: Fox News," Stuart Thompson reported. (NYT)
Fox News' Howard Kurtz — who attended the court proceedings masked on Tuesday — declined to report on "Special Report" the settlement figure disclosed by Dominion. Kurtz said he couldn't "independently confirm" the number. (MMFA)
Lawyers for now-fired Abby Grossberg: "While we congratulate Dominion on a truly precedent setting settlement, we cannot help but be reminded of how Fox News's penchant for paying out notoriously large settlements to resolve lawsuits exposing its unlawful conduct ... have unfortunately, to date, failed to bring about actual meaningful changes..." (Twitter)
Just a reminder: Even after all that has been revealed about Fox News as a result of this case, the vast majority of mainstream news orgs continue to describe the dishonest right-wing talk channel as a "news network."

——— BELOW THE FOLD ———

CNN Photo Illustration/Evgenia Novozhenina/Reuters

Edict Against Evan: Detained Wall Street Journal reporter Evan Gershkovich, who faces up to 20 years in a Russian prison, was denied an appeal to move his pre-trial detention to house arrest on Tuesday. Appearing in Moscow City Court, Gershkovich was seen in a glass cage as the proceedings got underway. His lawyers said they offered the court a bail amount of $613,000 and Dow Jones provided a letter of guarantee. But it wasn't enough to convince the judge. CNN's Stephanie Halasz has more here.

► Dow Jones boss Almar Latour and The WSJ chief Emma Tucker sent a note to the newsroom: "As many of you will have read, our colleague Evan Gershkovich appeared at a hearing today in Moscow City Court where his pretrial detention was upheld. While we expected this development, it is nonetheless disappointing."

► Alessandra Stanley, former Moscow Bureau chief for The NYT, writes a column on how the U.S. should deal with the detention of Gershkovich: "The Biden administration should find someone that Putin would hate to lose and throw that Russian into a supermax prison."

THE BUSINESS

CNN Photo Illustration/Robyn Beck/AFP/Getty Images

The Password Push: Netflix shares were down about 2% in after-hours trading after the company reported mixed earnings Tuesday. Netflix beat slightly on earnings but missed by a hair on revenue. Perhaps more importantly, however, the streaming giant said that its much-anticipated password crackdown will now occur in Q2, not Q1 as originally planned. "While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a better outcome from both our members and our business," the company said. CNN's Clare Duffy has more here.

► Netflix also announced it is shutting down its original DVD business after more than two decades.

IN THE INDUSTRY

NBCU "held a role-play session for managers about how to defeat union drives, a task the training materials for the exercise said was necessary for employees to keep their jobs," Josh Eidelson reports. (Bloomberg)
NewsNation will "debut a new daytime block of news programming next Monday that will bring the network to 24 hours of news, five days a week," Sara Fischer reports. (Axios)
Another from Fischer: The vast majority of Americans believe the news that they hear on podcasts. (Axios)
The WaPo will partner with The 19th for its annual 19th Represents Summit. (WaPo)

MEDIA MOVES

The Athletic hired Jim Trotter as national columnist. (NYT)

THE INFO WARS

CNN Photo Illustration/Chris duMond/Getty Images

DeSantis Dissed on Disney: Is Ron DeSantis' war on Disney beginning to backfire in a major way? The Florida governor is now being ripped by members of his own party for his assault on the Magic Kingdom — including notable Florida resident Donald Trump. On Tuesday, Trump declared that DeSantis is "being absolutely destroyed by Disney," saying "his original P.R. plan fizzled" and "now he's going back with a new one to save face." Trump called DeSantis' clash with Disney an "unnecessary ... political STUNT." Meanwhile, other potential GOP presidential hopefuls zinged DeSantis. POLITICO's Kierra Frazier has more here.

THE VALLEY

CNN Photo Illustration/Avishek Das/SOPA Images/LightRocket/Getty Images

Reddit's Realization: It's not just Twitter. Reddit announced on Tuesday in an interview with The NYT's Mike Isaac that it will soon begin charging for use of its API. "The Reddit corpus of data is really valuable," founder and chief executive Steve Huffman explained. "But we don't need to give all of that value to some of the largest companies in the world for free." That said, Huffman said that the API will continue to be free for developers to build tools such as bots. Read Isaac's full story here.

TOO MANY TABS

Elon Musk "is on a reputation-mending media tour as Twitter faces business challenges and advertiser skepticism tied to his erratic and controversial product and policy changes," Sara Fischer reports. (Axios)
Swedish Radio said Tuesday it will quit Twitter, becoming the first major European pubic broadcaster to abandon the embattled platform. (Reuters)
"What was Twitter anyway?": Willy Staley writes, "Whether the platform is dying or not, it's time to reckon with how exactly it broke our brains." (NYT)
Apple and Alphabet have gone to Amazon with concerns about pornography on the Kindle app. (Reuters)
YouTube is clamping down on rules pertaining to videos on eating disorders. (The Verge)
"As Mark Zuckerberg plows ahead with his so-called year of efficiency, several of his long-time advertising lieutenants have moved on from Meta," Lara O'Reilly reports. (Insider)

CURTAIN CALL

OFF STAGE

Cineworld has scrapped plans to sell its businesses outside the U.S., U.K., and Ireland. The cinema company said Tuesday that proposals "did not meet the value level required by the group's lenders." (Variety)
The lineup for the Tribeca Festival has been unveiled. The festival will take place June 7-18 and feature 109 films. (Variety)
The most streamed shows in March? "Outer Banks" and "The Mandalorian," per Nielsen. (Deadline)
Disneyland is planning its first-ever "Pride Nite." (LAT)
Kim Kardashian's private equity firm is hiring from Wall Street. (Bloomberg)
"Beef" star David Choe appears to have filed copyright takedown requests related to a nearly decade-old video in which he jokes he is a "successful rapist." (Variety)
Paramount+ has ordered "Section 31" as a movie, with Michelle Yeoh set to reprise her role as Emperor Philippa Georgiou. (THR)
Paramount+ is also in the early stages of developing a "Galaxy Quest" series. (Variety)
David Spade and Will Arnett will host Fox's new game show "Snake Oil." (Deadline)
Charlie Sheen and Chuck Lorre are reuniting for the Max comedy series "How To Be a Bookie." (THR)
Jake Gyllenhaal said he would "love" to star in the Broadway musical "Fiddler on the Roof." (Variety)

Thank you for reading! This newsletter was edited by Jon Passantino and produced with the assistance of Liam Reilly. Have feedback? Send us an email here. We will see you back in your inbox tomorrow.