$1.6-Billion Fox News Defamation Trial Delayed For One Day: What's At Stake

A highly anticipated trial against Fox Corp FOXA has been delayed for one day, and is due to begin Tuesday, as per a new announcement by Delaware Judge Eric M. Davis.

Fox News, the company's news broadcasting arm, is facing a defamation lawsuit by Dominion Voting Systems Corp. after the network's coverage of the 2020 presidential election consistently accused Dominion of leveraging its voting technology to rig the election in favor of President Joe Biden against Donald Trump.

The Background: Last week, Fox reached a settlement with Majed Khalil, a Venezuelan businessman who had separately filed a defamation case against the network for falsely accusing him of playing a key role in rigging the 2020 election.

Former Fox News host Lou Dobbs had accused Khalil of "orchestrating a non-existent scheme to fix the election." Now, Dobbs is expected to testify in the Dominion trial alongside key network figures including Tucker Carlson, Sean Hannity, Bret Baier and Dana Perino.

In its $1.6-billion lawsuit, Dominion has also issued a subpoena requesting the testimony of 92 year-old billionaire magnate and Fox chair Rudolph Murdoch, as well as his son and Fox CEO Lachlan Murdoch.

Last month, Rudolph Murdoch was quoted saying he didn't believe the 2020 election was rigged.

Although no explanation was given for the trial's one-day delay, Judge Davis commented that such a postponement did not seem unusual and that it's normal for high-profile trials to suffer small hold-ups.

Fox Vs. Dominion: In the aftermath of the 2020 presidential election, several Fox News anchors made repeated statements supporting unproven claims that the election was rigged through the use of electronic voting systems provided by Dominion.

Dominion filed a defamation lawsuit in 2021 saying that "following Fox’s defamatory statements, Dominion’s business suffered enormously." 

An audit hired by Dominion puts losses for the company north of $900 million due to losses in profits, potential new businesses, legal, security and other expenses.

According to the company, several employees were also subject to violent threats from supporters of the rigged election theory, according to an NPR report.

For its part, Fox lawyers have argued the case "is about the First Amendment protections of the media's absolute right to cover the news," reported The NY Times.

Fox's defense is expecting the network’s broadcasts to be protected by First Amendment law as commentary and news, making the trial a landmark case in the history of America's free speech litigation.

Fox was made to hand over thousands of emails and text messages between hosts, producers and executives, where the issue of a rigged election was raised to doubt by several key network figures, in spite of reporting the opposite.

Impact On Fox shares: Late last month, BofA Securities downgraded Fox from Buy to Neutral while reducing the price target from $42 to $34.

Analyst Jessica Reif Ehrlich said that ​​"the Dominion lawsuit and associated headlines around the case should continue to be an overhang on shares.

"We see increased risks for potential monetary damages and/or their brand," she wrote.

Fox stock, however, hasn't been significantly impacted by the negative news of the trial so far. Shares are up 2.8% in the previous month and 17% in the last six months.

Shares were up 0.9% at the time of this writing.