Growing chaos and confusion surrounds Fox News, as chairman and founding CEO Roger Ailes prepares to leave.
This morning, Ailes’ lawyer confirmed to Hollywood Reporter that the Republican operative turned phenomenally successful TV executive was negotiating his exit from the network. Amazingly, she claimed Ailes could step down as head of Fox News, but remain with the company in a different capacity.
It appears that some of the network’s most powerful hosts — Bill O’Reilly, Sean Hannity and Greta Van Susteren — have clauses in their contracts that would allow them to depart if Ailes were to leave the network entirely. There is now talk of “meetings” at Fox between these and other people on Ailes’ side. The battle has moved from one of a sexual harassment claim by host Gretchen Carlson (she accused Ailes of firing her for refusing his sexual advances and claimed repeated sexual harassment from her on-air Fox & Friends co-host, Steve Doocy) to a power struggle involving the Murdochs (led by Lachlan) and the soon-to-be-retired Fox chief.
In the wake of Carlson’s lawsuit, many of the network’s biggest names went on the record defending Ailes and Fox News. But yesterday, New York magazine reported that Megyn Kelly — a star anchor at the network currently hosting its coverage of the GOP convention — had told the investigators hired by Fox to look into the claims about Ailes, that Ailes had made “unwanted sexual advances” towards her a decade ago.
Kelly’s complaint appears to have been the tipping point against Ailes, as was news that Fox lawyers had lifted “no comment” clauses in settlements with other female staff who had been allegedly harassed by Ailes. That raises the question: was there a corporate cover-up of Ailes’s predatory activities over the years? Some commentators are wondering if Ailes has joined Bill Cosby in being found out as a serial abuser and harasser for decades, but one whose power and clout with media owners allowed them to go unchallenged until the twilight of their careers.
Reports overnight said the Murdochs were now united on the need for Ailes to go. One report said Ailes had been told to leave by August 1, and then a few hours later Deadline confirmed a story in conservative blog The Drudge Report that said he was going ASAP, with a US$40 million contract buyout.
This is now a high-stakes situation for Fox and the Murdochs. Ailes is 76 and at the end of his career. The Murdoch sons and dad Rupert (who is 85) are in the midst of a gradual transfer of power and control of the empire. Fox News is central to all that. It is the Murdoch empire’s single largest earner, making a net US$1 billion and more a year, which is more than families newspapers, subscription TV and online real estate arms make in a decade. When 21st Century Fox reports its fourth quarter and full 2015-16 results on August 3, we will get confirmation of the importance of Fox News to the Murdoch family’s bottom line.
While Fox News gives the Murdochs influence in US political and media circles, its profits keep the share price buoyant (and the family feeling prosperous). So far the shares have hardly moved in response to Ailes’ deepening quagmire. But if stars like O’Reilly and Hannity were to depart, that could quickly change.
The big winner from all of this is Lachlan Murdoch. He’s long advocated keeping Ailes on a tight leash. Back in 2005, Lachlan left the then-News Corp in New York after facing opposition to him from Ailes and Peter Chernin, the then-chief operating office of the company. Chernin went several years ago (he was paid to leave, like Chase Carey, another senior non-family executive who has now gone).
Now Ailes is out and Lachlan has his revenge — eaten cold. Brother James, of course, made his own comeback, from the ignominy of the News of the World phone-hacking scandal in the United Kingdom, which nearly consumed the empire. Now the hard heads in the sharemarket will turn their attention to the future of 21st Century Fox without Ailes and wonder if the fabulous money-making machine is dead, and Fox becomes just another media empire beset with generational and operational pressures, slowly fading away.