Authors: Gabriel Sherman
Tags: #Business & Economics, #Corporate & Business History, #Political Science, #General, #Social Science, #Media Studies
The feature story, headlined “Embracing the Enemy,” was published on the second Sunday in 1995.
“It was taken internally as Roger positioning himself not only to succeed Bob as CEO of NBC, but to cause it to happen sooner,” an A-T staffer said. Ailes’s tensions with Rogers and Zaslav were hinted at.
“Roger sees everyone as either for him or against him,” an anonymous NBC executive told Hass. The article’s publication proved to be the turning point in Ailes’s career at NBC. “You can paint the arc of Roger’s Q-score at NBC,” the A-T staffer said, referring to the measurement television executives use to assess popularity. “The apex was right before that article.”
A
ILES HAD CHOSEN AN INOPPORTUNE MOMENT
to launch a campaign for Wright’s job. While Ailes was talking himself up to
The New York Times
, Wright was pushing NBC in a direction that would ultimately freeze Ailes out of the NBC hierarchy.
Five days after the profile hit newsstands, in January 1995, Bob Wright and Jack Welch flew on NBC’s corporate jet to DeKalb Peachtree Airport, outside Atlanta. From there, they drove to Buckhead, the tony Atlanta suburb, for a secret meeting with CNN founder Ted Turner at the Ritz-Carlton. Since the early 1980s, Turner had held on-and-off talks with NBC about merging. This round was the second time in two years that the executives had discussed a deal. The more recent courtship began several weeks earlier, when Turner reached out to NBC. Ever since CNN’s coverage of the Gulf War, CNN had swelled into a global mega brand.
The network’s operating income would hit $350 million in 1995, nearly double that of 1990. A deal with CNN would make NBC the most serious cable news contender in the business.
As the men talked, Turner paced the room. They argued over the valuation of Turner’s company. Turner continued to flit back and forth, as Wright tried to break through to Turner. He was accustomed to Turner’s manic behavior, as the two men had been close since the 1970s. But Welch, who barely knew Turner, found it disconcerting. Sensing Welch’s hostility, Turner feared, as he later recalled, “if we ever were to do a deal I’d be just another employee of General Electric.”
After ninety minutes, Turner abruptly ended the meeting. “You know what? I don’t think I want to do this,” he told them.
The breakdown of the negotiations with Turner only increased
NBC’s interest in developing a real cable news channel. The talks set off a chain reaction, resulting in a radical transformation of the cable news industry. With CNN off the table, NBC was determined to start a cable news channel of its own. And Ailes’s rivals inside NBC were moving to ensure that Andy Lack and NBC News would be in charge of it, not Roger Ailes.
T
he
Times Magazine
article had raised Ailes’s profile in a dangerous way—just as had happened with
Selling of the President
. And shortly after it was published, Ailes’s opponents mobilized.
One afternoon, a Rogers loyalist, who had been subjected to Ailes’s dress-downs in meetings, walked into Bob Wright’s fifty-second-floor office and shocked Wright with anguished accounts of how Ailes verbally abused and threatened subordinates. Wright called Ed Scanlon, NBC’s human resources chief, into his office right away. “Good God, Ed, you gotta hear what he has to say,” Wright told him.
Shortly afterward, Wright and Scanlon visited the Fort Lee offices to observe the situation. Others came forward.
CNBC’s prime-time chief Andy Friendly confided to Wright’s wife, Suzanne, that Ailes was out of control. Suzanne Wright was a powerful presence inside the network.
Executives dubbed her Madam Chairman for her well-known habit of interweaving her social and professional life at NBC.
Concerned that Ailes was out for her husband’s job, Suzanne encouraged Friendly to brief her husband on Ailes’s management issues.
On Monday, March 13, 1995, Friendly sent Wright and Scanlon a confidential memorandum that leveled a litany of explosive charges against Ailes. The dramatic letter, typed in all capital letters with multiple grammar mistakes, appeared hastily prepared, a result of Friendly’s poor computer skills. “The sensitive nature of this precludes my assistant typing it,” Friendly wrote.
Friendly’s allegations were chilling, detailing instances in which, he claimed, Ailes harangued him in meetings, encouraged him to lie to the press, and left Friendly with the distinct fear that Ailes might become physically violent.
Given their fractious relationship and Friendly’s loyalty to Rogers, Friendly had clear motivation to challenge Ailes. But the provocative letter also reflected Ailes’s increasingly erratic behavior. “He has repeatedly forced, or tried to force my colleagues and I to lie, cover-up and use the
journalistic and programming power of CNBC to promote himself or attack his enemies,” Friendly wrote. Friendly asserted that Ailes called him in a panic at home at seven in the morning and told him to lie about putting his show
Straight Forward
on CNBC, after a newspaper raised questions about it being “another Ailes ego trip.”
Within the boundaries of corporate culture, Ailes reacted like a caged animal. “I along with several of my most talented colleagues have and continue to feel emotional and even physical fear dealing with this man every day,” Friendly wrote. “From in my face spitting and screaming to verbal threats of ‘blowing [my] brains out’, to psycological [
sic
] mind games questioning my family relationships, my marriage and other highly personal, totally inappropriate topics.”
Friendly, whose father was legendary CBS News president Fred Friendly, called Ailes “a living, breathing integrity crisis” and implored his bosses for a transfer to a position in Los Angeles. Wright and Scanlon did not take any major steps to address the allegations.
“When you get into the details, it’s always ugly,” Wright later said. Six months later, Friendly quit.
He took a job as executive vice president for programming at the television syndicator King World Productions, which distributed
Inside Edition
and game shows including
Wheel of Fortune
,
Jeopardy!
, and
Hollywood Squares
.
A
s Ailes battled for control within the company, he fought a second front against CNBC’s competitors.
In June 1995, a few months after rebuffing Wright and Welch, Ted Turner announced that CNN was planning to launch a financial news network headed up by the veteran business anchor Lou Dobbs.
Ailes had tried to recruit Dobbs to join CNBC, and now felt that Dobbs had played him in a ruse to coax a better deal out of Turner.
He contemplated running attack ads against CNN. One would show elderly wheelchair-bound viewers watching Dobbs’s CNN show
Moneyline
on a television inside a nursing home, a gambit Ailes hoped would poke fun at CNN’s aging audience. Ailes also played his hand in the press.
“At this point there’s nothing Ailes would like better than the opportunity to kick Dobbs’ ass,” a source close to
Ailes told a reporter. Ailes told the press that if Turner came onto his turf, he would turn America’s Talking into a twenty-four-hour news channel to compete with CNN.
Ailes tried to use the brewing competition with CNN to his advantage.
The negotiating window to renew his contract was open until June 30, and CNBC’s success gave him leverage. Despite Wright’s growing reservations about Ailes, Jack Welch remained a vocal booster who wanted to keep Ailes in the fold. Once again, Ailes continued to use the press.
Nine days before the contract deadline,
USA Today
reported that Ailes’s “chances of bolting are 50-50.” The negotiating maneuvers paid off.
On June 30, 1995, Ailes signed a four-year contract to remain at NBC. It was significantly more lucrative than his existing deal. Ailes’s base salary jumped to $725,000, with guaranteed increases to $800,000 in January 1997, and $900,000 in July 1998. The contract stipulated that Ailes would receive an annual incentive bonus of no less than $250,000. As before, Ailes reported to Wright and was allowed to retain his outside business interests. He remained a board member and principal of Ailes Communications, executive producer of the Limbaugh show, and retained the right to consult on two outside talk shows.
What the contract did not do is resolve the tangled lines of reporting between Ailes, Rogers, and Zaslav, a smoldering ember that would soon ignite. Ailes wanted complete control of CNBC, but Rogers and David Zaslav were still in the picture. The competition heightened Ailes’s concern that his rivals were plotting a new push against him.
“This is where the beautiful marriage cracked,” Bob Wright said.
In May 1995, NBC had announced a joint venture with Microsoft to create a new interactive channel.
Tom Rogers started negotiations with Bill Gates.
Ailes was initially unaware of the plan. At 30 Rock, executives were hatching the channel, which would take the place of America’s Talking, under the informal code name,
“The Ohio Project.” When Ailes got wind of it, he considered the name a snide reference to his upbringing. He lobbied to save America’s Talking and became especially enraged after learning that Zaslav backed the new channel. “The reality of it was, Bill Gates didn’t want it to be under anyone but the president of NBC News,” Wright remembered. “That was a crushing blow to Roger. He hated it.”
It was at this time that Ailes seemed to spin into
“meltdown mode,” as Bob Wright would later put it. His fourteen-year marriage to Norma was nearing its end.
Norma had filed for divorce in September 1994. A State Supreme Court justice finally granted a judgment on September 5, 1995. The dissolution of his second marriage had significant financial consequences, unlike that of his first, eighteen years earlier. He was now a man of considerable wealth.
Ailes’s conflict with Zaslav deepened when he learned that Zaslav
had questioned his projections for CNBC.
“The bubble broke in the fall,” Wright said.
At a company dinner one evening that September, Ailes declared war on his colleague. “Let’s kill the S.O.B.,” he told loyalists dining with him. Then, in a meeting with Zaslav, Ailes allegedly called him
“a little fucking Jew prick.”
On Saturday, September 30, Tom Rogers called NBC’s HR chief, Ed Scanlon, to inform him that Zaslav had made a shocking charge against Ailes. The insult, Rogers said, had been made during a “tirade,” where there was a witness present. In handwritten notes on the matter, Scanlon reported, “I told Tom if this was an accurate story, it represented a serious charge against Roger Ailes and cannot be dismissed by NBC.”
Jack Welch prized Scanlon for his discretion and his ability to keep messy employment matters out of the press. The allegation that a highprofile executive had hurled an anti-Semitic insult against a Jewish employee was just the type of matter that needed to be handled with extreme sensitivity, especially in a media company full of gossipy journalists.
That night, Scanlon briefed Wright on the situation. The next day, Wright conferred with Rogers, and Zaslav called Scanlon to provide his firsthand account of the episode. Zaslav said that he was not trying to discredit Ailes, and asked to report to someone else at 30 Rock while keeping his current position. “I’m only trying to do my job,” Zaslav said. Before they got off the phone, Scanlon told Zaslav that Ailes’s remark, if true, was a serious violation of NBC standards of conduct, and the matter would have to be investigated.
As it happened, Scanlon and Wright were scheduled to attend a meeting at the Management Development Institute, GE’s famed leadership training center in Crotonville, New York, on Monday and Tuesday. In between sessions, the men conferred and decided to consult Howard Ganz, a partner at the law firm Proskauer Rose, whom NBC had retained to handle employment disputes.
“Howard Ganz is a tough and fair investigator,” Wright said. On Tuesday evening, October 3, Scanlon asked Ganz to conduct an inquiry—quietly.
NBC gave Ganz, according to Ganz’s notes, “free rein—no conditions attached; no limitations imposed.”
Instead, Ailes moved to discredit Zaslav.
A week into Ganz’s inquiry, Ailes forwarded to Scanlon a scathing letter that Jim Greiner, CNBC’s new chief financial officer, had written him about Zaslav. According to Greiner’s pro-Ailes account, it was Zaslav, not Ailes, who posed the problem. He said Zaslav was a “control freak” who managed through “intimidation”
and lacked “good business judgment.” The sources, whom Greiner did not name in his letter to Ailes, were “employees in good standing,” who “didn’t seem to have an ax to grind,” and who “spoke rationally and reasonably.”
Scanlon seemed to consider the letter a transparent attempt by Ailes to damage Zaslav. He sent a copy of the letter to Ganz.
“Roger is really working to get a ‘big and long story’ on David Zaslav,” Scanlon wrote to Ganz in a note attached to the letter.
Within two weeks, Ganz detailed his initial findings to NBC. “I have reported to NBC that there is substantial credible evidence corroborating this allegation—that I believe the allegation to be true,” he noted, regarding the anti-Semitic slur. He found that it occurred “in context of history of abusive, offensive, and intimidating statements/threats and personal attacks reportedly made to and upon a number of other people.” Moreover, Ganz investigated allegations that Ailes had “intimidated and threatened individuals who might be interviewed or have relevant information in connection with matters related to investigation.” It was Ganz’s opinion that Ailes’s remark to Zaslav could be grounds for “cause termination.” It was a persuasive account.
Bob Wright later said that he believed Ganz. “My conclusion was that he probably said it,” Wright recalled, referring to Ailes’s comment.
NBC asked Ganz to temporarily suspend his investigation and meet with representatives of Ailes to see if they could resolve the matter without proceeding further. Their interest was self-preservation. “So far have been able to keep lid on and avoid leaks. If resume investigation, will necessarily involve substantial number of additional people—run risk of leaks,” Ganz noted.
On Monday, October 16, Scanlon spoke with Ailes. After being “warned about his behavior,” and being told that it was “unacceptable and did not comport with GE/NBC standards,” Ailes told Scanlon that he wanted to put an end to the matter within twenty-four hours.