New York, Oregon Pension Funds Sue Fox Corp. for Opening Itself Up to Lawsuits

Fox recently settled for $787 million a lawsuit from Dominion Voting Systems.



Pensions funds from New York City and Oregon allege that Fox Corp. exposed itself to defamation lawsuits and breached its fiduciary duty following the network’s controversial coverage of the 2020 U.S. presidential election.

In April, Fox settled a $787 million defamation lawsuit brought by the voting machine company Dominion Voting Systems after Fox networks falsely alleged Dominion was a involved in modifying results during the 2020 presidential election. Fox also faces a $2.7 billion lawsuit from Smartmatic USA Corp., another voting machine company.

The Oregon Public Employee Retirement Fund and the New York City Public Pension Funds allege the Dominion lawsuit and settlement resulted in losses, as they owned shares in Fox.

The Oregon Public Employee Retirement Fund held more than 226,000 Class A and Class B shares of Fox, worth $5.2 million as of August 31. The Oregon Department of Justice filed a suit in the Delaware Court of Chancery on behalf of OPERF and the Oregon Investment Council.

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The five New York City pension funds own approximately 572,946 shares of Fox Class A stock and 285,338 shares of Fox Class B stock, valued at $27.7 million as of August 31, 2023, according to the New York City comptroller’s office.

“The board of Fox Corporation took a massive risk in pursuing profits by perpetuating and peddling known falsehoods,” said Ellen Rosenblum, Oregon’s attorney general, in a statement. “The directors’ choices exposed themselves and the company to liability and exposed their shareholders to significant risks. That is the crux of our lawsuit, and we look forward to making our case in court.”

New York’s five retirement funds, the New York City Employees’ Retirement System, Teachers’ Retirement System, Board of Education Retirement System, New York City Fire Pension Fund and New York City Police Pension Fund, joined Oregon’s lawsuit as co-plaintiffs.

“Fox’s board of directors has blatantly disregarded the need for journalistic standards and failed to put safeguards in place despite having a business model that invites defamation litigation,” New York City Comptroller Brad Lander saidin a press release. “A lack of journalistic standards and a proper strategy to mitigate defamation has clearly harmed Fox’s reputation and threatens their bottom line and long-term profitability. Clear governance systems are absolutely necessary for the long-term health of a company. As Fox’s board continues to ignore these red flags, we are holding them accountable as long-term shareholders.”

The lawsuit, whose case number is 2023-0931, alleges that Fox board members, specifically chairman Rupert Murdoch and his son, were aware that promoting election conspiracy theories on its networks would open the company up to lawsuits and financial liability at the expense of its shareholders.

The Dominion lawsuit resulted in poor earnings for the third quarter of this year, with Fox losing $54 million, or 10 cents per share, compared to 3Q 2022, when the company generated $283 million in net income. According to the lawsuit, the value of the settlement for the Smartmatic case could exceed one billion dollars. 

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US Corporate Funding Ratios Decline Slightly in August

Corporate pension funding decreased for the first time since December 2022 


U.S. corporate pension funding levels fell last month, matching a drop in global equities, according to analysts.

The August report from LGIM America’s Pension Solutions Monitor estimated that the average U.S. corporate funding ratio decreased to 103.6% through August from 104.9% at the end of July.

Global equities declined 2.8%, with the S&P 500 decreasing 1.6%. Portfolios in plans with a 50/50 allocation declined 2.5%, while liabilities declined 1.4%. The decrease in assets outpaced the decline in liabilities, leading to lower funding ratios.

This is the first decline in corporate pension funding since December 2022 according to LGIM America data, which has seen funding ratios increasing from 98.3% at the end of last year and from 96% last August.

Insight Investment also reported that funding status fell in August, to 106.5% from 106.9% a month earlier. Insight Investment also reported asset and liability declines of 1.6% and 1.3%, respectively.

Sweta Vaidya, head of North American solution design at Insight Investment, noted in a statement that, “unlike last month, equity returns were weak and dragged down funding status even as discount rates increased 15 [basis points]. It is a gentle reminder that equity volatility can easily undo any potential funded status gains from discount rates rising—important to keep in mind as the fed provides mixed signals on whether it will hike rates another 25 bps or stay the course.”

Despite the trend of declining funding levels, Mercer found that pension funding increased in August. Mercer analysts reported the S&P 1500 pension funding status increased by one percentage point to a 108% funding ratio. Discount rates increased to 5.37% from 5.19%.

“With higher discount rates and improved funding for many defined benefit sponsors, we continue to see a lot of activity, with plan sponsors taking a fresh look at strategy and in many cases executing pension risk transfer and investment de-risking strategies,” Mercer partner Scott Jarboe said in the company’s report.

Mercer representatives did not respond to requests for further detail about the firm’s analysis.

Aon’s model found pension funding levels decreased to 101.5% by the end of August from 101.7% at the end of July. Assets declined 1.7%, and credit spreads widened by 6 bps. The month-end 10-year Treasury rate increased 12 bps. The interest rates used to value pension liabilities increased to 5.32%. from 5.14%.

The WTW Pension Index also declined in August due to weak equities, along with a decline in liabilities as a result of interest rate hikes. WTW’s model tracks the hypothetical performance of a portfolio with a 60/40 ratio of equity to fixed income. The equity portion returned negative 2.4% for the month, with the fixed-income portion returning negative 05%.

Agilis reported in its U.S. pension briefing that liabilities decreased between 1% and 2% last month, as both equities and fixed income had negative returns. Negative returns in equities outweighed the 0.18% rise in discount rates, which now sit at 5.18%.

According to October Three’s pension finance update, a hypothetical plan with a 60/40 asset allocation lost 2% in August but remained up 9% for the year. A plan with a 20/80 asset allocation also lost 2% in August but is up 3% for the year. October Three noted while it was not a good month for equities, 2023 is shaping up to be a good year for pension sponsors.

Wilshire Associates pension funding tracker found that corporate pension funding fell 0.1% in August, to 105.0%. Wilshire attributed the decline to a 2.3% decline in asset values, offset by a 2.1% decline in liabilities.

“After four consecutive months of funded status increases, August experienced a slight decrease,” Ned McGuire, a managing director at Wilshire, said in a release. “Despite the decrease in most asset classes—with international equity experiencing the worst monthly decrease since September 2022—the liability value also decreased due to rising yields.”

Milliman reported pension funding for the 100 largest U.S. corporate pension funds declined to 103.3% from 103.6% in August. Asset value declined 1.55%, to $1.327 trillion from $1.354 trillion during the month. Milliman projected the funding ratio for corporate plans will rise back to 103.6% by the end of the year and could reach 105.2% if asset return rates and discount rates are stable at 5.8% and 5.41%, respectively.

In a scenario with interest rates rising to 6.24% from 5.61% by the end of 2024, with a 9.8% return on investments, funding ratios would climb to 107% by the end of the year and 120% by the end of 2024, Milliman projected. If discount rates decline to 5.21% by year-end 2023 and 4.61% by year-end 2024 with annual returns of 1.8%, the 2023 funding ratio would decline to 100%, and the 2024 ratio would fall to 91%.

Related Stories 

Strong Equities, Dip in Liabilities Boost Pensions

Corporate Pension Funding Hits Highest Level Since Financial Crisis

US Corporate Pensions Rebound to Fully Funded Status

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