SEC rules Fox can skip vote on labeling Reuters TV opinion shows

By Ross Kerber

(Reuters) – Media company Fox may avoid a shareholder vote on a measure requiring it to consider different labels for its news and opinion shows, the top U.S. securities regulator said.

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

The decision marks a victory for conservative-leaning parent 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The proposal was submitted by private investor John Chevedden and is similar to one in 2023 which was withdrawn before last year’s meeting. Both cited Fox’s $787.5 million settlement of a defamation lawsuit by Dominion Voting Systems over Fox’s coverage of false claims of voter fraud in the 2020 election.

The cost “highlights the risk of a news organization inappropriately differentiating its reporting from opinion news and entertainment programming,” the text of this year’s proposal said. Supporters have called for Fox to consider some kind of “public differentiation” between news and other programming, as well as a Fox board report on the issue.

In addition to arguing the ordinary course of business issue, Fox told the SEC that the proposal could be thrown out because it is misleading.

“Journalism by its nature can comprise both news and opinion, newscasts can incorporate elements of opinion and opinioncasts can incorporate elements of news. Consequently, the implication of the proposition that differentiation between journalism and opinion is possible is materially false and misleading”. an attorney for Fox, Lyuba Goltser of the law firm Weil Gotshal & Manges LLP wrote to the agency on July 2.

The SEC said it was not necessary to address this argument.

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

“There may not be a more important problem for Fox than its misinformation problem,” Morgan said via email. “This is exactly the type of issue that is appropriate for shareholder input.”