When right-wing networks Newsmax and SmartMatic agreed to settle last fall’s election libel lawsuit by voting software companies, the financial terms of the agreement were not disclosed and appear to remain confidential. This is no longer the case.
In regulatory filings released this week by Newsmax, the channel shows it agrees to buy a “five-year cash practice order” from the voting machine company and buy 2,000 shares of preferred shares from the conservative cable channel.
The investment prospectus also states that there are inherent risks for investors due to ongoing defamation cases in the Dominion voting system, which will be tried next month.
“While Newsmax Media is vigorously defending the Dominion lawsuit, the adverse outcome of the matter could have a material adverse impact on the company's financial condition, operating results and cash flows,” the company document said.
“We had a confidential settlement with Newsmax in September to resolve the lawsuit and could not comment further on the details,” Smartmatic external legal counsel J. Erik Connolly said in a statement to the lawsuit. independent. “Now, we are focused on the lawsuit against Fox News because they defame Smart IQ and deliberately introduce the audience to the role of Smart Matic in the 2020 election. We look forward to providing evidence to the jury and finally having the opportunity to be held accountable for Fox's harmful behavior.”
(Reuters)
Newsmax did not immediately respond to a request for comment.
Smartmatic also reached a confidential settlement with One America News in similar cases last April, but there are still several pending cases targeting the right-wing media and Maga personality that were fraudulent in the 2020 election.
The New York Court of Appeals ruled in January that Fox must face a massive trial by Smartmatic, involving $2.7 billion in Fox News, elevating the baseless conspiracy theory that voting machines “manipulate” Joe Biden’s election and “stole” from Donald Trump. In the largest defamation settlement in U.S. history, Fox paid Dominion $787.5 million in 2023 to resolve the company's election lawsuit.
SmartMatic also recently made a favorable ruling on its lawsuit against election-bearing pillow salesman Mike Lindell. A Minnesota federal judge tempted Mypillow CEO for failing to hand over financial documents and other discoveries in the case. The ruling comes after another judge ordered Lindell to pay nearly $60,000 in legal fees for his “freak” counterattack against the company.
While Dominion’s big-ticket solution from Fox News is nowhere to go, the $40 million Newsmax agreed to pay SmartMatation represents a large part of Maga Network’s revenue base.
According to the document, the network (between its broadcasting and digital operations) earned $135 million in revenue in the first six months of 2024, close to $80 million. The network's net loss in the first half of last year was close to $55 million, higher than the same period in 2023.
Additionally, Smartmatic may agree to the amount of settlement caused by Delaware Superior Court Judge Eric Davis, which ruled out the possibility of punitive damages a few days before the trial began. Davis agreed that Newsmax's statement about changing the election results was “actually wrong”, but he rejected the channel's claim to take “clearly malicious” under Florida law, which is where Newsmax is based.
The judge pointed out at the time: “There is no evidence that Newsmax has evil intentions for SmartMatic.”
After reaching a settlement last year, SmartMatic said it was “happy to ensure the completion of the case against Newsmax” and “look forward to our campaign for the court advocacy campaign against Fox Corp and Fox Corp and Fox News”, adding that “there are consequences for lying to the American people.”
Two months later, Newsmax issued a statement that “resolved the lawsuit filed by Smartmatic through a confidential settlement” and “about whether the charges were made [2020 U.S. presidential election] Its results are false/unreal to some extent changed or manipulated by smart people. ”
“SmartMatic is pleased that Newsmax finally admitted in a statement published on its website on November 30, 2024 that the claim was accused of false claims of claims being manipulated by SmartMatic,” the voting software company responded. “After years of litigation and extensive discovery, Newsmax was unable to confirm its allegations. This recognition reinforces SmartMatic's dedication to protecting its reputation and combating election misinformation.”
In this month’s prospectus, Newsmax said it has reached its goal of raising $225 million to be publicly disclosed, and the network noted that it is paying for smart snack settlements in four phases, insisting that none of the funds raised in stock products will be paid to Smartmatic.
“Newsmax Media reached a settlement agreement with SmartMatic on September 26, 2024, under which all claims will be issued by SmartMatic, including a cash amount of $40 million paid over time and a cash release stock of 2,000 shares of Befience of 2,000 shares at an exercise price of $5,000 per share, at an exercise price of $5,000 per share.” “As of the current period, the company has made payments under the settlement agreement totaling $20 million. Payments for the remaining balance will be paid in installments on each installment on March 31, 2025 and June 30, 2025. These payments will be paid by the cash on hand in the company’s existing cash, and the proceeds from this offering will not be used to make the remaining payments.”
As initially revealed in the prospectus for launching a $225 million placement last June, Newsmax also informed potential investors that it is currently paying off another big settlement for an anonymous counterparty in a business agreement that violates contract claims. Like SmartMatic, Newsmax said there is no funding in the product to pay for this settlement.
“In March 2023, Newsmax and its counterparties entered into a settlement agreement to resolve these claims before any lawsuit against Newsmax begins. In addition, the parties have amended their commercial agreements,” the document said. “Under the terms of the agreement, the company’s total of approximately $34.6 million is to be paid to counterparties, with annual payments ranging from $7.3 million between 2028 and 2028, with a balance (if any).
According to the IPO circular, Newsmax said it currently has about $6.7 million in cash. Additionally, the network warns investors that news Max could have some risks due to its current settlement liabilities and pending lawsuits.
“From the date of the issuance notice, Newsmax cannot predict the final outcome of the Domination Question and cannot reasonably estimate its liability (if any),” the prospectus states. “However, adverse outcomes of the Domination Question may have a material adverse effect on Newsmax's financial condition, operating results and cash flows.”
