This post is by Chris O'Brien from footnoted*
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After months of controversy swirling around claims of sexual harassment at the Fox News Channel, its parent company finally acknowledged the obvious in its latest 10-Q today.
Twenty-First Century Fox said in its filing: “the network’s primetime lineup has significantly changed which could have a negative impact on our ratings.”
That’s just a portion of a new disclosure section the company added entitled: “Fox News Channel.” The new section summarizes the impact on the company of the well-publicized allegations of sexual harassment that have been swirling since last year. While bits and pieces of the issue have been slipped into previous footnotes in filings, this is the first time the company saw fit to round them all up in one tidy package for investors.
This filings comes just weeks after on-air personality Bill O’Reilly was forced out after 20 years at the channel. He was sunk by New York Times story that revealed the millions of dollars in settlements the company had paid regarding harassment claims against him. Last year, Fox News Chairman Roger Ailes was forced out following similar allegations. Star anchor Megyn Kelly was among those making the claims against Ailes, and she soon departed and has now been hired by NBC.
The company noted that “certain of its current and former employees have been subject to allegations of sexual harassment and discrimination relating to alleged misconduct at the Company’s Fox News Channel business.” It did not name Ailes or O’Reilly specifically.
But the use of “current” is certainly intriguing since the two most notable targets of these accusations have left. Current star anchor Sean Hannity was the target of a public harassment allegation, which he strenuously denied.
The filing did not give specifics on the number of lawsuits pending or settled, simply stating it has “settled some of these claims and is contesting other claims in litigation. To date, none of the amounts paid in settlements or reserved for pending or future claims, is individually or in the aggregate, material to the Company. ”
It also disclosed that for the past nine months ending March 31, it has paid $45 million in costs related to settlements of “pending and potential litigations” related to Ailes’ resignation last July.
More cryptically, perhaps, it said it had “received regulatory and investigative inquiries relating to these matters and stockholder demands to inspect the books and records of the Company which could lead to future litigation.” It did not say which regulatory agencies might be looking through its closets for dirty laundry.
Alas, for a company that might hope this will all go away soon, it said these investigations and legal claims were still in the “early stages.” And thus, it couldn’t be sure how much financial impact they will.
Fox News is just one of many parts of the Twenty-First Century machine. But it seems it will be delivering more than its share of legal and regulatory headaches for the foreseeable future.