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Dominion was “irreparably damaged” by Fox’s airing of false claims that its voting machines helped steal the 2020 US election, the company’s main investor said, a day after landing a historic $787.5mn settlement from the conservative broadcaster.
Three acquisitions set to go ahead before the news network began airing claims that Dominion’s devices were responsible for Donald Trump’s loss will no longer be pursued, Hootan Yaghoobzadeh, the co-founder of private equity group Staple Street Capital, told the Financial Times on Wednesday.
“There’s just no point . . . the brand has been irreparably damaged and harmed,” said Yaghoobzadeh, whose firm bought a majority stake in Dominion in 2018. “If you’re an election official and in a state . . . even where 10 per cent or 20 per cent of your constituents believe these lies about Dominion or some percentage, it’s a more difficult option to pick.”
Staple Street, founded by Yaghoobzadeh and Stephen Owens in 2010, originally paid about $40mn and raised more than $30mn of debt from a small lender called PennantPark to finance its controlling stake in Dominion, which was at the time a Denver-based business with just $10mn in operating profits.
In the two years preceding the 2020 election, Dominion’s management team had expanded earnings by four and half times, Yaghoobzadeh said, and had “a real line of sight to significantly grow the business and experience explosive growth”.
Chief executive John Poulos, who had started Dominion with investment from friends and family two decades earlier, had been working with Staple Street to diversify it from selling clunky voting machines. Their plan was to expand its software services and maintenance contracts that would create recurring sales that are more highly valued by Wall Street, Yaghoobzadeh said.
Although Dominion was bringing in as much as $45mn a year by 2020, the company put a string of planned acquisitions on hold until after the election in November.
Its systems were used in 28 states during the 2020 vote, which put it squarely in the crosshairs of Trump and his allies when they began claiming the vote had been rigged against him in favour of Joe Biden.
After the election, Fox and other conservative networks aired dozens of defamatory statements about the company, Dominion alleged in multiple lawsuits it later filed, including conspiracy theories claiming that the business was bribing election officials and worked for Venezuela’s late leader Hugo Chávez.
Yaghoobzadeh said he and Dominion’s management decided to sue Fox soon after the claims began to be aired because it was “easy to figure out we didn’t rig the election” and it was obvious that the network had at least “disregarded the truth”, which is the minimum standard for proving defamation under US law.
Fox had consistently denied it defamed the company and would only concede that the court found “certain claims about Dominion to be false” following Tuesday’s settlement. It has previously claimed that 2022 was Dominion’s “best year ever” in terms of revenue, pointing to data cited by NPR that showed a “net increase in jurisdictions using Dominion equipment since 2020” — although the story also acknowledged that the machine maker’s growth may have been thwarted.
Yaghoobzadeh said he was “saddened” when pre-trial discovery unearthed communications that showed key Fox figures never believed the election was stolen, but were worried they would lose viewers if they said so on air.
He declined to comment on whether the company, which secured one of the largest-ever defamation payouts from a media group in the US, would be wound down or rebranded, saying only that Staple Street was “trying to really figure out what the next steps are”.
Dominion is “committed to the existing customers”, he said, and was focused on doing “the best job we can do”.
Yaghoobzadeh defended the size of the payout, which was almost half of the $1.6bn originally sought by Dominion. “The future of the business was extremely bright,” he said, “and this defamation campaign stole this.”
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