Who’s Paying Fox’s $787.5 Million Settlement With Dominion?

Fox Information simply agreed to settle Dominion’s defamation lawsuit in opposition to it for $787.5 million. That appears like some huge cash till you perceive Fox’s principal income: tens of thousands and thousands of people that not often or by no means watch it however are compelled to pay some huge cash for it anyway.

Understanding this requires a fast take a look at the economics of cable TV information.

Earlier than cable, we received TV information from the information divisions of the leisure channels CBS, NBC, and ABC. They placed on just a few hours of stories at most per day, their 30-minute broadcasts every night time plus possibly “Nightline” or one thing like that. These reveals had advertisements, however they often didn’t cowl the price of manufacturing, so the advert income from the networks’ sitcoms and different reveals needed to subsidize the programming about actuality.

Cable and satellite tv for pc TV made attainable the arrival of 24-hour information channels, and whereas they made cash from promoting, additionally they acquired what are referred to as carriage charges from every subscriber. Cable or satellite tv for pc suppliers — comparable to Comcast, Spectrum, DirecTV, or Verizon — negotiate the carriage charges each few years with the channels they need to supply to their subscribers.

As of 2022, the highest cable and satellite tv for pc suppliers served about 76 million households. Importantly, their prospects can’t order particular person channels à la carte. As a substitute, prospects have to select from a small variety of plans supplied by Comcast or whoever is their supplier and pay for all of the channels which might be a part of the plan they’ve chosen, whether or not they need all of the channels or not.

For example, I see that the place I reside, Optimum cable has 4 selections, so as of value: Fundamental, Core, Choose, and Premium. All of them besides Fundamental embody CNN, MSNBC, and Fox, whereas Fundamental doesn’t embody any of them. So if I need CNN, I’ve to pay for one of many non-Fundamental packages that additionally offers me Fox and MSNBC (or vice versa). The cash I’m paying for the package deal goes to all three of these information channels, though I could solely need and watch certainly one of them.

Fox Information has all the time been particularly aggressive on carriage charges. As of 2020, it charged suppliers about $2 per thirty days per subscriber. In contrast, CNN (together with CNN’s HLN) prices between $0.70 and $0.90, and MSNBC was simply $0.33. The carriage charges for Fox Information seem like the second highest of any channel, behind solely ESPN.

It’s true that a number of the Fox premium is justified, provided that Fox Information has larger audiences than its rivals. However that’s not the entire story. Fox averaged 2.26 million viewers in prime time for February, whereas MSNBC had simply over half that, at 1.17 million. But Fox will get almost seven occasions as a lot subscriber income as MSNBC.

And these carriage charges are extra essential for Fox Information than for CNN and MSNBC as a result of many main advertisers have fled Fox. It wants the upper charges to offset its decrease promoting revenues.

The upshot right here is that cable and satellite tv for pc subscribers who don’t watch Fox Information are nonetheless compelled to supply it with big subsidies. That is because of the willingness of the suppliers to pay inflated charges to Fox, and that is possible because of the fervency of the Fox viewers as a result of the suppliers are fearful of a Fox-generated backlash in the event that they don’t fork over what Fox calls for. (This dynamic was illustrated when Spectrum deliberate to drop Corncob TV and its hit present “Coffin Flop.”)

So when your bank card is robotically billed by your cable supplier this month, you’ll now know that a couple of dollars are going on to Fox Information. Along with all of America’s different powerless pay-TV subscribers, you’re making it attainable for Fox to only write a verify for over three-quarters of a billion {dollars} for its election lies, whether or not you’ve ever watched a minute of it or not.

You possibly can attempt to combat again, in fact. Among the information on this article was obtained from Media Issues for America, the liberal media monitoring group that may be a fierce, longtime critic of Fox Information. Media Issues for America is presently working a marketing campaign referred to as “Don’t Let Fox Increase My Invoice,” which organizes subscribers to inform their suppliers to not conform to greater Fox Information carriage charges in present negotiations.

In the meantime, Fox’s inventory worth took a short 3 p.c dip when the settlement was introduced on Tuesday. Inside 24 hours, it was again to the place it had been beforehand and certainly was buying and selling at virtually precisely the place it had been on Election Day 2020.