CNN's Oliver Darcy discusses “huge legal exposure” for Fox from shareholder suits
Darcy: “The perception that they are a news company is crumbling, and this could result in damage to the actual Fox Corporation brand and really result in problems for shareholders”
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From the March 1, 2023, edition of CNN's CNN This Morning
POPPY HARLOW (CO-ANCHOR): New questions this morning after just stunning revelations from the $1.6 billion lawsuit against Fox News. The network's chairman, Rupert Murdoch, knew the outlet was spreading lies about the 2020 presidential election. Legal experts are calling on Fox News to take immediate action like removing high-ranking personnel and settling its case with Dominion, or else the legal exposure could increase. Oliver Darcy is here with a lot more. This is interesting. You wrote about it in your newsletter last night. Paul Ryan's on the board, right?
OLIVER DARCY (CNN SENIOR MEDIA REPORTER): Yeah.
HARLOW: And some other big-name individuals. The question is, is there culpability of the board? And if there is and there was no action, what is then potential legal liability for these individuals?
DARCY: I think we have to remember that Fox Corporation is a publicly traded company. And so they have a board of directors who owe responsibility to the shareholders to make sure that, you know, there is some sort of corporate governance. And I think what you're seeing in these documents that are coming out of Dominion is there is no semblance of normal corporate governance at Fox Corporation, where you have people like the CEO of Fox News seemingly engaged in massive wrongdoing. And so when I was talking to Jeffrey Sonnenfeld, who is the renowned professor at Yale Management School, he was saying that the board of Fox, people like Paul Ryan, need to take immediate action, including possibly removing people like the Fox News CEO Suzanne Scott to at least attempt to clean up this wrongdoing, because they have a responsibility to shareholders. And by their lack of corporate governance, they have effectively opened up Fox News and Fox Corporation --
HARLOW: To a huge financial hit.
DARCY: -- to huge legal exposure. And so they have to do something. And I was talking to him and I said Paul Ryan, you know he privately warned the Murdochs, and he said that's not enough. He needs to take more action, he has a responsibility to the shareholders and not the Murdochs. So, we'll see what happens, but there is, you know, some history here. Murdoch's News of the World scandal- there was some high-profile resignations there, including James Murdoch, Murdoch's son. So, this story is only getting started I think.
DON LEMON (CO-ANCHOR): Can you imagine if this actually goes to trial, and those people have to get on the stand, for some of Fox's high-profile personalities?
DARCY: It will be devastating for Fox, I mean this is a taste of what's to come. Imagine Rupert Murdoch on the stand, Lachlan Murdoch on the stand, Sean Hannity on the stand, Tucker Carlson on the stand. This will be weeks and weeks of damning headlines, which could really damage Fox's brand. I mean, they have, you know, to preserve these business relationships they have to at least have some reputation they're a legitimate news company. And I have been saying obviously that that's not the case. But the perception that they are a news company is crumbling, and this could result in damage to the actual Fox Corporation brand and really result in problems for shareholders. Their shareholders are gonna wonder what's going on over at Fox.
LEMON: And Dominion has that leverage and they know it. Cause they know, you don't want to see your folks on the stand, so do something, I'm sure.