Welcome back to In the Room, my biweekly private email on the inner workings of the media industry. Tonight, some pregame analysis on the Murdoch media trial of the century, why Fox and Dominion never settled, and a nascent Bill Kennard conspiracy theory.

Of course, the Khalil settlement has been overshadowed by the far more significant legal challenge that Fox News faces from Dominion Voting Systems, which is seeking $1.6 billion in damages for false claims that Fox hosts and guests repeatedly made about its voting machines. But, for that very reason, it also reignited a longstanding question among Murdoch watchers: Why hasn’t the aging mogul reached a similar settlement with Dominion?

The case, which is scheduled to go to trial next week, has already unearthed troves of embarrassing private emails and text messages between the Murdochs, Fox News executives, and on-air talent that lay bare the network’s willingness to promote baseless voter fraud conspiracies—conspiracies most of the hosts and executives clearly did not believe—in a desperate attempt to keep itself in the good graces of the MAGA faithful and compete with Newsmax. (Their concern about the competition may have been premature, especially in light of a recent Newsmax exodus, which my colleague Tara Palmeri has been keeping tabs on.)

The embarrassment from the discovery phase is merely the start. Once the trial is underway, the Murdochs, Fox executives, and several of the network’s most well-known hosts—Tucker Carlson, Sean Hannity, and Laura Ingraham among them—will likely be compelled to testify before a jury. On Wednesday, a group of news organizations filed a petition for live audio of the proceedings, and may push further for video footage, which could turn the testimony of Fox News’ popular stars into a national news event, à la Gwyneth Paltrow or Johnny Depp.

Meanwhile, more potentially damaging evidence is likely to come to the fore. On Wednesday, Judge Eric M. Davis sanctioned Fox’s legal team and indicated that he would launch an investigation into whether they had deliberately withheld details about Murdoch’s role as executive chairman of the news channel—potentially opening him to further discovery—and withheld relevant evidence, including recordings of host Maria Bartiromo’s conversations with Trump lawyers Sidney Powell and Rudy Giuliani. (In a statement, Fox News said Murdoch has been listed as executive chairman of Fox News in S.E.C. filings since 2019.)

The Murdochs may believe they can win the case against Dominion on the merits, though some sources in Murdochworld are already girding themselves for a loss in the Delaware Superior Court that they would then appeal—first to the Delaware Supreme Court, then possibly to the 3rd Circuit and, after that, the Supreme Court. Even if Dominion wins the defamation claim, of course, it is highly unlikely that the company, which was valued at just $80 million five years ago, will be able to demonstrate that Fox’s claims caused $1.6 billion in damages. But regardless of how the legal battle plays out, the broader revelations about Murdoch and Fox News have already dealt a significant blow to the network in the court of public opinion—at least among those who are willing to consider the available evidence. A Fox Corp. shareholder who sued the Murdochs and other members of the Fox Corp. board on Tuesday, claimed that they violated their fiduciary duty by promoting the voter fraud conspiracy—yet another data point in a metastasizing legal quagmire.

For Dominion, public atonement seems to be part of the point. The chance to bring Rupert, his son Lachlan, the executives of Fox News, and the likes of Tucker, Hannity, Ingraham et al. before a jury, and to potentially win a historic legal victory in the process, is perhaps more compelling than the potential financial reward—which, again, is highly unlikely to be $1.6 billion. The Murdochs and Fox News thus seem destined to be subject to more public scrutiny—and, after Dominion, they face a similar $2.7 billion lawsuit from Smartmatic, another voting software firm, in New York.

Still, on the question of what this does to Fox’s reputation, it’s worth remembering how we got here: Fox made itself vulnerable to defamation claims precisely because the company believed their core audience preferred conspiracy over truth. So an audience sympathetic to Trump’s claims about voter fraud, and his more recent claims about political victimization by the Manhattan district attorney, might be similarly sympathetic to conspiracies about Dominion. And so no matter what Fox News executives and personalities say under oath in the courtroom, it’s likely that Fox News and its parent company will lay the groundwork for a different narrative about this case.

Indeed, if you study the progression of official Fox News statements about their legal rival, you’ll notice an increasing emphasis on Dominion’s private-equity owners, Staple Street Capital, which bought a 75 percent majority stake in the company five years ago. Staple Street is a mid-market buyout firm co-founded by two Carlyle Group veterans who, given their portfolio of payroll services, dental management firms and flower bulb companies, don’t make for great bogeymen. But, if you follow right-wing media closely enough, you’ll notice growing attention showered upon one of Staple Street’s executive board members, Bill Kennard, the Clinton-era F.C.C. chairman who went on to serve as Obama’s ambassador to the European Union.

Kennard, a Stanford and Yale Law School graduate with a distinguished career in the private and public sector, and board seats at AT&T, Ford, MetLife and Duke Energy, is a singularly hard man on which to tie a conspiracy, even with his long history of generous campaign contributions to Democratic candidates and causes. Of course, that’s the thing about conservative conspiracy theories these days: they often don’t require more than the use of the words Clinton or Obama.

The more obvious implication from Fox’s emphasis on Staple Street is that this isn’t really about a small voting software business taking on the Fox Goliath, but rather a story of a private equity firm looking to maximize its investment either through damages claims or, in the long term, by turning Dominon into a hero of the fight for American democracy, or so the theory goes. In one of Fox’s legal filings, the lawyers note that a senior associate at Staple Street once received a message from a former colleague who wrote, “Would be pretty unreal if you guys like 20x’ed your Dominion investment with these lawsuits.”

It is evidence, they believe, that Staple Street is out for more money than it deserves. More compelling, of course, is the evidence that Murdoch and Fox News knowingly peddled conspiracy theories about voter fraud—“really crazy stuff,” as Rupert himself put it—to the American public. But at the end of the day, the Murdochs likely know that their audience has already tuned this out.