Media Matters Meltdown: Lefty Watchdog Teeters On Bankruptcy Amid Legal Fights And Donor Exodus

After years of pumping out propaganda and trying to kill independent media outlets such as yours truly, liberal ‘watchdog’ Media Matters is reportedly on the verge of bankruptcy.

Founded by Democratic operative David Brock (formerly in a long-term relationship with DC restauranteer James Alefantis), the Soros-backed pit bull that made a name for itself smearing conservatives and colluding with corporate censors, is reportedly on the brink of collapse as it buckles under legal bills, government investigations, internal drama, and a mass donor retreat, the NY Times reports.

Founded in 2003 by David Brock, a self-described “right-wing hit man” who switched sides and became an enforcer for Democrats, Media Matters set out to neutralize what Mr. Brock saw as a powerful Republican information ecosystem. The group became the flagship in a constellation of nonprofits formed or acquired by Mr. Brock to help Democrats and undermine Republicans.

The organization spent years targeting organizations such as ZeroHedge, Fox News, Breitbart – and individuals such as Elon Musk – the latter of whom sued Media Matters for defamation last year, claiming they used manipulative and deceptive tactics to convince advertisers like Apple, IBM and Disney that ‘hateful’ content was being displayed next to their brands – leading them to pause their X advertising campaigns. X claims Media Matters fabricated the results (deep dive here).

That lawsuit, which Media Matters attempted to settle (unsuccessfully), triggered a cascade of trouble: Republican attorneys general launched investigations, donors ran for the hills, and Media Matters was left holding the bag for millions in legal fees to the tune of $15 million. 

Things are so bad that the group’s longtime law firm, the Elias Law Group – headed by Democratic election attorney Marc Elias – hit them with a $4 million demand for unpaid legal expenses. 

“We understand this case has been and remains very difficult for everyone involved, as was Musk’s intention when he brought it,” wrote Elias staffer Ezra Reese in a letter to Media Matters President Angelo Carusone and lead fundraiser, Mary Pat Bonner. Reese offered to discount the fees by half – if they paid $2.25 million within about a week. If Media Matters refused, the Elias firm would expect full payment of the original amount, and would “go pens down and take steps to withdraw from the case by the end of the month.”

Bonner flipped out, writing in response “You must be kidding!! This is how you treat people who have been clients for 16 years and are friends?”

In May, the Federal Trade Commission launched an investigation into whether Media Matters and roughly a dozen other watchdog and advertising groups illegally colluded to convince corporate advertisers to dissuade companies from buying ads on X and other platforms - an investigation which echoed Musk’s claims. 

A noted above, big-money donors, including those connected to George Soros, have reportedly started backing away, fearing political fallout and legal entanglements. Without them, the watchdog’s financial foundation is crumbling fast.

Crisis Behind Closed Doors

Insiders told the Times the group is in chaos: morale is tanking, staffers are clashing, and some execs are trying to negotiate with Musk’s X - which allegedly tried to push a settlement that would include Media Matters shutting down.

President Angelo Carusone insists the group isn’t going anywhere.

“Unlike some major media entities that have recently caved to pressure, we understand that this battle is larger than us,” Carusone told the Times. “That’s why we continue to carry out our mission and fight in court.”

But with donors fleeing, bills piling up, and allies turning into creditors, the question is: for how long?

Bottom line: The censors are getting censored — and the karma might just come with a bankruptcy filing.

after spending 10 years trying to shut ZH and countless other websites down, Media Matters get a triple Karma enema. https://t.co/DMZ3uIOeUV

— zerohedge (@zerohedge) July 26, 2025