Fox News can use its settlement payout to Dominion Voting Systems to claim a large tax break, according to a new report.
Dominion had slapped the conservative news network with a $1.6bn lawsuit for airing false claims over the results of the 2020 presidential election.
On Tuesday, Fox averted a high-profile jury trial in a Delaware courtroom and settled for $787.5m (£633m), about half of the original demand, in what is said to be the largest media settlement in history.
The settlement can help the organisation get a large tax break, reported media outlet The Lever.
The firm paid an effective income tax rate of 27 per cent in 2022, according to the outlet. If the organisation manages to write off the entire settlement amount, that could mean a tax break worth an estimated $213m.
Fox Corp’s chief communications officer Brian Nick told the outlet that he could “confirm tax deductibility” of the settlement, “but not the amount”.
This can happen because of provisions under federal law that allow taxpayers to write off legal costs by claiming them as “ordinary and necessary” business expenses, according to the report.
Earlier on Wednesday, Fox issued a statement following the settlement saying the organisation is “pleased to have reached a settlement of our dispute with Dominion Voting Systems”.
“We acknowledge the Court’s rulings finding certain claims about Dominion to be false,” the company said in a statement shared with The Independent.
“This settlement reflects Fox’s continued commitment to the highest journalistic standards,” it said. “We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues.”
Dominion chief executive John Poulos noted Fox’s admission of spreading falsehoods in a statement.
“Fox has admitted to telling lies about Dominion that caused enormous damage to my company, our employees, and our customers,” he said. “Nothing can ever make up for that.”
Dominion’s lawsuit accused the most-watched cable news network and the Fox Corp leadership of amplifying false and damaging claims about the company in the aftermath of the 2020 presidential election.
Conspiracy theories had emerged over the outcome of the election and these were amplified by Republican leaders, including Donald Trump and his allies, and by the right-wing media that includes some of Fox’s competitors.
Before the trial, the judge presiding over the case determined that on-air statements about the company in the wake of the 2020 presidential election were false.
Jurors were not tasked with figuring out if the statements about Dominion were true or not.
Instead, the jury was set to determine whether these claims counted as “actual malice”, or in other words, if Fox knowingly presented false claims or did so with reckless disregard for the truth.
Throughout the lawsuit and proceedings, Fox’s attorneys argued that the network had a duty to report newsworthy claims, especially ones endorsed by former president Mr Trump.
Network leadership appeared to agree on providing a platform for the “wild claims” that the election was stolen from Mr Trump because “positive impressions of Fox News” among its viewers “dropped precipitously after Election Day to the lowest levels” the network had seen, according to arguments in court filings from Dominion.
