Media Matters for America, the progressive watchdog group that has long scrutinized conservative media, is reportedly teetering on the edge of bankruptcy. The organization, which has been a fixture in political media circles since its inception in 2004, is grappling with mounting legal costs and a shrinking pool of financial backers.
Founded by David Brock, Media Matters has made a name for itself by monitoring and correcting conservative misinformation in the U.S. media. However, recent reports from the New York Times suggest that the group is in dire financial straits, with over $15 million in legal expenses accrued in recent months. This financial burden stems from a series of lawsuits, including actions by the Federal Trade Commission, state attorneys general, and notably, a defamation lawsuit filed by billionaire Elon Musk's company, X Corp.
The lawsuit brought forth by X Corp. in November 2023 alleges that Media Matters falsely claimed top companies' ads were appearing alongside extremist content on its platform. According to the suit, Media Matters manipulated the algorithm using test accounts to follow fringe accounts and refresh content, thus creating a misleading impression of ad placement, as reported by Trending Politics.
Attempts to reach a settlement with Musk have been unsuccessful, with negotiations breaking down despite offers of concessions from Media Matters. The ongoing legal battle has led to a reduction in the organization's workforce and a plea to donors for urgent financial support. However, many donors are reportedly hesitant to contribute, given the organization's precarious position.
The financial woes have led to a significant scaling back of operations at Media Matters, with internal sources revealing to the Times that the organization has been marginalized by some of its former allies. The group, which once boasted of raising nearly $250 million between 2003 and 2023, has been a powerful voice in left-wing politics, known for its advertiser boycotts and aggressive tactics against conservative media outlets.
Media Matters operates under two nonprofit entities, which allow it to keep donor identities private. Among its known donors are the Soros network, Susie Tompkins Buell, and Stephen F. Mandel Jr. However, with finances drying up, the organization is faced with a difficult decision: to press on with legal battles or to settle and potentially lose its influence.
The situation is reminiscent of the Global Alliance for Responsible Media, which chose to shut down last year rather than contest a lawsuit filed by Musk’s X. Within Media Matters, there is a faction advocating for bankruptcy or settlement as the legal challenges, including additional lawsuits in Ireland and Singapore, continue to drain resources.
Complicating matters, Media Matters owes over $4 million to Elias Law Group, a firm founded by Marc Elias, a longtime ally of the Clintons. The firm has offered to forgive part of the debt if a payment plan is accepted, but has threatened full legal action otherwise. This offer has caused tension with Media Matters’ lead fundraiser Mary Pat Bonner, who expressed outrage in an email over what she perceived as a betrayal of trust.
Despite assurances from leadership about the organization's stability, a memo obtained by the Times indicates that closure is a serious consideration. A meeting in Connecticut last year with donors discussed the possibility of shutting down, highlighting the precarious future of the organization.
