Authors: Gabriel Sherman
Tags: #Business & Economics, #Corporate & Business History, #Political Science, #General, #Social Science, #Media Studies
Aurelio left a message for Reiter, but David Klasfeld, her chief of staff, returned the call, which insulted the Time Warner executive. Aurelio said he wanted to talk to Reiter.
As they spoke by phone later that day, Reiter was in the middle of explaining the channel swap when Aurelio cut her off.
“No fucking way,”
he snapped. The proposal was illegal.
“There’s no point in us meeting, then,” Reiter said.
“Let’s do the meeting,” he said, advising Reiter to bring city lawyers.
Aurelio was entering the talks with a history of conflict with Giuliani and Murdoch. The locus of their friction was Aurelio’s close friendship with Giuliani’s predecessor, David Dinkins. As a veteran of New York’s bare-knuckle politics, Aurelio was ready to hold Time Warner’s ground. He believed the city’s jobs argument was “a phony issue” used to cover up political favor trading. “The
New York Post
helped make him mayor,” Aurelio recalled. “In my memory, there was never a newspaper cheerleader in New York City in
any
mayoral contest more overwhelmingly supportive than the
New York Post
for Giuliani in 1993.”
On Tuesday, October 1, Aurelio arrived at Reiter’s office at City Hall flanked by a pair of lawyers: Robert Jacobs, the general counsel of Time Warner’s New York City Cable Group, and Allan Arffa, a litigator at Paul, Weiss. Six City Hall representatives lined one side of the table, outnumbering the Time Warner contingent two to one. The meeting was a disaster, lasting less than an hour. At one point, Time Warner’s lawyers accused the Giuliani negotiators of proposing a cover-up to avoid making the channel swap seem like a quid pro quo for the city agreeing to renew Time Warner’s franchise. Before Aurelio and his colleagues stood to walk out, Norman Sinel, the city’s outside attorney, issued a blunt warning. “The mayor’s office is fully aware of the risks involved here,” he said. “We’re willing to take those risks. The question is, is Time Warner willing to take those risks?”
Aurelio returned to the office and briefed Parsons on the fireworks. Aurelio wagered that the saber rattling would soon subside. “I don’t know,” Parsons said, knowing Giuliani and Ailes well. “I’m not sure that’s the end of it.”
Parsons was right.
Later that day, he called Fran Reiter. It was the first time the two had spoken since she had left him a message the previous week. Reiter expressed outrage at Aurelio’s abrasiveness. “The bottom line is, Dick, we have a very, very serious concern. Your guys totally rejected our proposal today. They got up on a soapbox about the First Amendment. I don’t want to get into that discussion. I’ve got a new approach that I’d like to lay before you.”
Reiter explained that the city planned to air Fox News on one of its Crosswalks channels. In the morning, Time Warner would receive a letter from the city requesting a “waiver” to proceed. Reiter suggested that Levin call Murdoch and make amends. Time Warner’s city franchises came up for renewal in 1998, and as Reiter put it, Time Warner wouldn’t
want the Fox News issue clouding up the franchise issue. The mayor controlled four of six seats on the franchise review committee.
Although the call ended without any firm commitments, Reiter was encouraged by Parsons’s collegial tone. The thaw in relations, however, was fleeting. At News Corp, Murdoch and Ailes were plotting a new phase in the campaign.
“When you’re screwed over, you fight,” Ailes would tell a reporter. “We’re not going to quit until we’re all dead. This’ll be a blood war until we get clearance in New York City.”
T
hat evening, Reiter was one of the hundreds of guests toasting the launch of Fox News under a giant white tent outside News Corp headquarters. The mayor himself was on hand at the gala and posed for photos with Ailes and Murdoch, which the
New York Post
published. Murdoch gave a brief speech introducing the “fair and balanced” creed. Giuliani told guests that Fox News was of “incalculable value to the people of the city.” Governor Pataki added that Ailes “used to teach me how to campaign, and now he’ll teach me how to watch the news.” An assistant guided Reiter to speak with Murdoch. A few moments later, she bumped into Ailes, who thanked her for the city’s assistance. Reiter was not the only politico getting the full-court press. The party was a public stage on which to flex political muscle.
Within twenty-four hours after the party, Ailes’s Republican Triumvirate confronted Time Warner’s leadership.
Giuliani called his onetime ally Parsons, while Pataki and Al D’Amato made calls to Levin and Aurelio. “Why aren’t you carrying it?” D’Amato pointedly asked Aurelio. “It was unusual to get the mayor, senator, and governor all putting pressure on us the next day on behalf of Rupert,” Aurelio recalled. “I found it a display of raw political power that was extremely inappropriate.”
On Thursday, October 3, Giuliani’s office received a disappointing answer from Time Warner. “Your request that we waive our rights in order to carry [Fox News] on a dedicated municipal access channel, however innocent your intent, is in the circumstances a violation of Time Warner Cable’s franchise rights with the City, the Federal Cable Act and other law, including our First Amendment rights,” Time Warner’s general counsel wrote. “It is therefore a request we cannot and will not consider.”
Time Warner’s defiance did not deter Giuliani.
Norman Sinel, the
city’s outside counsel, immediately called Allan Arffa, Time Warner’s lawyer at Paul, Weiss, and threatened to raise antitrust issues at the franchise review.
Reiter’s chief of staff, David Klasfeld, sent one final letter to Parsons. “The City makes its request to Time Warner as an appeal to its good corporate citizenship,” Klasfeld wrote, further revealing the city’s desperation. “New York City’s successful economic revitalization depends on businesses cooperating with these efforts so the City can create new jobs at all income and skill levels.”
Friday, October 4, ended without a response from Parsons. Time Warner’s silence, which ensured that New Yorkers would not be able to view Fox News when it went live at 6:00 on Monday morning, moved the crisis toward a showdown in court.
A
s Time Warner dug in, Ailes found himself scrambling. The distribution battle had escalated at the moment when the demands on his time were reaching an apex. After the launch party, Ailes returned to work a few hours later for the 4:00 a.m. meeting with his senior staff. But presidential politics had accustomed him to little sleep. It also reinforced a truism about the press: journalists love to report conflict. If Ailes could gin up controversy, what political consultants called “free media,” articles would follow.
On the eve of the launch, Ailes opened the press front.
“People who are out there saying we’ll be a bunch of sleazy bastards are the same ones who said we wouldn’t be able to get on the air,” he told the
Los Angeles Times
. His competitors at CNN and MSNBC took his bait. CNN president Tom Johnson rebuked Ailes for his nasty barbs.
“I see no value whatsoever in one news organization firing shots at another,” he said.
Andy Lack told
The Dallas Morning News
that competition “doesn’t mean we have to try to destroy each other in the process or trample all over each other. So good luck, and let’s go at it.”
It was a good thing Ailes made news. He needed all the PR he could get. The only way to see Fox News in Manhattan on the morning of its debut was, in essence, to walk by its street-facing studio on 48th Street.
Shortly before 6:00 on the morning of October 7, Ailes barreled into the newsroom, giving locker room pep talks. “You set?” he barked to a group of employees. “Too much laughter over there!” he hollered at another bunch. “Act nervous!” The staffers ignored his request. They could
likely sense he was hamming it up for an Associated Press reporter scribbling notes nearby.
In the control room, producers huddled over monitors watching the morning show hosts, Louis Aguirre, a hunky Cuban-American from Miami, and Allison Costarene, a pretty blonde, running through final preparations sitting at glass-topped desks, in front of a pastel pink and blue backdrop. The teleprompter was loaded with the show’s top stories: a recap of the previous night’s presidential debate at the Bushnell theater in Hartford, Connecticut, and a live report from Rome by correspondent Gary Matsumoto on Pope John Paul II’s hospitalization for appendicitis. For a network that would be defined by its decibel level, the premiere was surprisingly subdued. “Good morning. Welcome to Fox News,” Aguirre said into the camera when the clock struck six.
For the opening day, Ailes had assembled a guest list of boldface names, the most notable of which served as a counterweight to MSNBC’s prime-time debut with Bill Clinton: Republican presidential candidate Bob Dole, live in the studio for his first post-debate interview. Other gets, which firmly leaned to the right, included Israel’s prime minister Benjamin Netanyahu, Utah Republican senator Orrin Hatch, Governor George Pataki, and Ailes’s friend Henry Kissinger. When it came to booking liberals, Ailes’s producers tended to recruit guests—Nation of Islam leader Louis Farrakhan, imprisoned Whitewater witness Susan McDougal, liberal California senator Henry Waxman, Clinton drug czar Barry McCaffrey—who could inject culture war conflict into the conversation.
In his second-floor office, Ailes wrote down the channel’s mission statement. “Fox News is committed to providing viewers with more factual information and a balanced and fair presentation. Fox believes viewers should make their own judgment on important issues based on unbiased coverage. Our motto is ‘we report, you decide.’ Our job is to give the American people information they can use to lead their lives more effectively. And our job is to tell them the truth wherever the truth falls.”
Unlike the executives at other channels, Ailes was crafting his message, as one Fox News executive said, to “define the market opportunity in news.” Ed Rollins, the GOP campaign consultant who would later become a Fox News contributor, believed that politics gave Ailes insight that his competitors lacked.
“He knew there were a couple million conservatives who were a potential audience, and he built Fox to reach them,” he said. And Ailes’s motto, a cunning tautology, flattered their sense of possessing discernment.
F
ox News’s launch on the morning of October 7 was the biggest moment in Roger Ailes’s television career. But because of the Time Warner battle, he was absent for a good part of it. Shortly after 10:00 a.m., Ailes was three miles south of the Fox News studios, sitting alongside Arthur Siskind at City Hall, ready to deliver a withering indictment of Time Warner before city officials on the Franchise and Concession Review Committee. Time Warner made it clear they would not capitulate to Giuliani’s pressure campaign. Representatives of Michael Bloomberg, the billionaire financial information mogul, were also on hand to testify.
Time Warner had previously agreed to carry a six-minute feed from Bloomberg Information Television several times a day on CNN, they explained, but as a result of the merger, the Bloomberg TV feed was being taken off the cable system.
“Good morning,” Ailes said at the opening of his prepared remarks. “An hour and fifteen minutes ago, Prime Minister Benjamin Netanyahu came into our channel live from Israel and his opening words were ‘Congratulations on the new channel in New York. We need more news. The more news, the more accuracy.’ So we thanked him for that.” (
Conspicuously missing was any mention that Netanyahu’s comments had been cut off after a satellite glitch silenced the audio.) Time Warner was standing in the way for two reasons: “one, direct competition; and, two, the well-publicized personal animosity Time Warner’s Vice Chairman, Ted Turner, bears towards Rupert Murdoch.”
According to Ailes, Fox News was the only channel that could break CNN’s monopoly. MSNBC was “not a true competitor” and therefore Time Warner’s decision to carry it did not inoculate the cable company against criticism. “It is not hard news coverage,” Ailes said. Ailes capped his argument with a patriotic appeal, one that his heartland audience might find objectionable. “New York City is the heart of America, and now Time Warner is trying to stamp us in the heart,” Ailes said. “New York City now has a cable systems czar who can control access and tell New Yorkers what they can and cannot see. Unfortunately, the New York City cable czar lives in Atlanta. His name is Ted Turner. Thank you.” Committee members did not have any questions.
The story, like many colorful Roger Ailes yarns, relied on a string of selectively chosen facts.
As evidence, Ailes marshaled a
Los Angeles Times
article, reporting that “sources close to Ted Turner say he was instrumental in Time Warner’s decision.” But the truth was that, at Time
Warner, Turner was essentially a gadfly, albeit a very loud and wealthy one, rather than a driver of strategy. Gerald Levin stacked Time Warner’s board of directors with advocates, who guaranteed his primacy as CEO and ensured that Turner’s post-merger status as vice chairman and largest shareholder was largely symbolic. The men were frequently at odds with one another. A couple of years later, Turner would effectively be fired from the company that bore his name.
After hearing about Ailes’s performance before the franchise committee, Parsons made a last-ditch effort at détente.
He called Deputy Mayor Randy Mastro, a confidant, and told him he was reaching out, not as Time Warner’s president, but “friend to friend.” Parsons had sent a stinging response to the city’s second request for a waiver that morning, a response that was resolute. “Time Warner would have to go to war on these issues if they were not resolved amicably,” Parsons said.
Privately, Parsons wanted peace.
On multiple occasions, he advised Aurelio, whose confrontational posture unsettled him, to seek an accord with Murdoch. “We have to worry about our franchise,” Parsons told him and Levin. Aurelio, in turn, worried about Parsons’s divided loyalty. “I had to go through this with Parsons
every
time,” he recalled. “He even told me at one point, ‘I guess that’s the end of my friendship with Giuliani.’ ” He was right.
Soon after speaking to Mastro,
Parsons publicly severed ties with the mayor, releasing a letter resigning as chairman of the city’s Economic Development Corporation.