SEC Rules Fox Can Ignore Vote on TV Opinion Show Labeling | WSAU News/Talk 550 AM 99.9 FM

By Ross Kerber

(Reuters) – Fox News can avoid a shareholder vote on a measure asking it to consider different labels for its news and opinion programming, the top U.S. securities regulator said.

The Securities and Exchange Commission (SEC) wrote in a letter seen by Reuters News on Thursday that it agreed with Fox’s argument that the activist investors’ proposal was “ordinary business.” That’s one of the criteria the agency uses to judge companies’ requests to exclude investor proposals from their proxy statements.

The decision is a victory for the parent company of conservative-leaning Fox News Media ahead of its annual meeting, which is traditionally held in the fall.

A Fox representative did not immediately respond to a request for comment.

The proposal was filed by private investor John Chevedden and is similar to the 2023 proposal, which was withdrawn before last year’s meeting. Both cited Fox’s $787.5 million settlement in a defamation lawsuit filed by Dominion Voting Systems over Fox’s coverage of false claims of voter fraud in the 2020 election.

The complaint “highlights the risk that a news organization may fail to adequately differentiate its news reporting from its opinion and entertainment programming,” the text of this year’s proposal reads. Proponents of the complaint have asked Fox to consider some form of “public differentiation” between news and non-news programming, as well as a report from Fox’s board of directors on the issue.

In addition to arguing that the issue is a matter of ordinary business, Fox told the SEC that the proposal could be barred for being misleading.

“By its nature, journalism can encompass both news and opinion, news broadcasts can incorporate elements of opinion, and opinion broadcasts can incorporate elements of news. Therefore, the implication of the proposition that a distinction between journalism and opinion is possible is materially false and misleading,” Fox attorney Lyuba Goltser of the law firm Weil Gotshal & Manges LLP wrote to the agency on July 2.

The SEC said it did not need to respond to that argument.

Luke Morgan, a lawyer for activist shareholder group As You Sow, who represented Chevedden, said supporters were disappointed.

“There is no bigger issue for Fox than misinformation,” Morgan said in an email. “This is precisely the kind of issue that deserves shareholder scrutiny.”

(Reporting by Ross Kerber, supplemented by Dawn Chmielewski, editing by Rod Nickel)