- Fox's actual payout could be reduced through tax deductions and insurance coverage
- Dominion settlement might be written off as a business expense, reducing Fox's cost to around $590 million
- Insurance coverage could potentially help Fox with a portion of the settlement
Fox Corp.'s eye-catching $787.5 million settlement with Dominion Voting Systems over defamation charges might seem astronomical, but guess what? It's not going to cost Fox as much as you might think.
Why, you ask? Well, Fox had a cool $4 billion stashed away as of December 2022, and tax deductions and insurance coverage could help soften the blow. The media giant can deduct the settlement from its income taxes as a business expense, and after this tax write-off, the actual cost could be closer to $590 million.
Big companies, like banks and media houses, often use this tax-deduction tactic, but the exact numbers usually remain a mystery. As for insurance, Fox could have coverage between $100 million to $500 million, which could take care of part of the settlement.
However, it's not all smooth sailing. There could be an annual limit on insurance payouts, and media companies might not always agree with their insurers on who covers what. But, Fox doesn't expect this settlement to mess with its operations, so it's business as usual for the media behemoth.
Another defamation lawsuit is on the horizon with Smartmatic, but that's still up in the air, and it might not hit the courtroom for a couple more years.
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