Authors: Gabriel Sherman
Tags: #Business & Economics, #Corporate & Business History, #Political Science, #General, #Social Science, #Media Studies
The post-election tweaks at Fox were just that—minor programming adjustments. Ailes was staying the course, taking little responsibility for the loss. He blamed his party for Romney’s defeat.
“The GOP couldn’t organize a one-car funeral,” he told executives.
At a speech to journalism students the previous spring, Ailes said, “Sarah Palin had no chance, right?” He went on, “Did anybody think she had a chance to be president? Anybody in here? Okay.
Oops
. Newt Gingrich couldn’t get anybody he worked with in Congress to support him, remember? A
little
bit of a problem. Rick Santorum, anybody ever hear of him until about six weeks ago? He lost his own state by 17 points.”
When Ailes re-signed a contract through 2016, Fox seemed as if it were frozen in time.
He brought back John Moody as executive editor and executive vice president.
Hannity, O’Reilly, Van Susteren, and Megyn Kelly all signed new multiyear deals.
Even Sarah Palin was rehired in June 2013.
In October 2013, Ailes shuffled his prime-time schedule for the first time in years. It was a modest update: Megyn Kelly took over the 9:00 p.m. hour, Hannity shifted to 10:00 p.m., and Van Susteren took over
Shepard Smith’s 7:00 p.m. newscast. O’Reilly, the bedrock of the lineup, remained at 8:00 p.m.
At the senior reaches of News Corp, Ailes’s static vision for Fox was concerning. Obama’s reelection coincided with the time News Corp was reorganizing its business.
In June 2013, the company split into 21st Century Fox (its film and TV assets) and News Corp (its scandalized newspaper division). Fox News had been a rocketship but now some board members wondered if Ailes’s fuel was spent. Although the company’s cable assets remained phenomenally profitable—for the quarter ending June 2013, cable revenue was up 16 percent over a year earlier, to $3 billion—the Fox News channel was not viewed as a growth asset.
The ratings in the wake of Obama’s reelection were down markedly. All of cable news took a hit, but Fox’s drop-off among twenty-five- to fifty-four-year-olds—the key advertising demographic—was steeper than its rivals’. In February 2013, Hannity’s audience was down by 35 percent from the same period in 2012, while O’Reilly’s audience had decreased by 26 percent.
Ad revenue was also down in the first quarter, because it was no longer an election year.
After a News Corp board meeting in Manhattan in April 2013, some directors privately questioned whether Ailes had a programming strategy to reverse the slide. They also voiced concern over the issue of succession. Ailes’s grip on power was so firm that some Fox executives described fearing
Lord of the Flies–
type chaos.
Ailes at times seemed unaware of the worrying trend lines at his network. When one sales executive pointed out in a meeting that Fox’s audience demographics skewed older than those of its cable news rivals, Ailes did not believe him. “Our demos suck,” the executive said. “No they don’t!” Ailes barked. When Ailes was shown the numbers, he seemed genuinely surprised. “Why didn’t I know about this?” he asked. The truth was, over the years, executives, fearing Ailes’s wrath, had shielded him from bad news. One executive recalled how Bill Shine would conveniently engage Ailes in partisan banter whenever his prime-time ratings dipped. “Did you see what Olbermann said last night?” Shine would venture. The question would cause Ailes to launch into a five-minute monologue about the former MSNBC host, and Fox’s ratings were left unmentioned.
T
he Fox Business Network was also a ratings disappointment to some News Corp executives. Ailes had never wanted the channel in the first
place.
When Murdoch tapped Ailes to launch it in 2007, Ailes told the five executives hired to run the channel, “the world doesn’t need another business network.” Because the boss had signaled his lack of enthusiasm, executives took concerted steps to undermine the spinoff’s success. “Welcome aboard. You’re set up for failure,” Ailes’s loyalist Ken LaCorte told Ray Hennessey, the new director of business news, not long after he was hired. Neil Cavuto, who was named managing editor of the channel, followed Ailes’s lead. “Cavuto wasn’t involved,” an executive said.
Kevin Magee, a trusted Fox News executive in charge of the day-to-day operations of the business channel, struggled to craft an identity for it. Ailes told Magee and his team that he did not want politics on-air—“we do that on the news channel,” he said—but in the next breath he’d say that politics was what affected business. In the summer of 2010, Magee and his team sought to carve out a niche by giving airtime to libertarians like Judge Andrew Napolitano, the host of the prime-time show
Freedom Watch
. But this clashed with Ailes’s efforts to steer Fox away from the Tea Party.
One night, the judge ranted against U.S. drone strikes against American citizens who were labeled terrorists. “Roger the next day was really furious,” an executive recalled. “He said, ‘If the Russians shot missiles at us, the Judge would want us to consult Congress to get their permission to respond.’ And then Ailes said he wanted the show off the air.
A few weeks later, it was gone. The whole show. He kept the Judge, who is popular, but not the show.” Libertarians flooded Facebook and other websites with complaints. Ailes ignored them.
“If all the people who emailed Fox on the Judge’s behalf had a Nielsen box, I would have kept him on the air,” Ailes said.
More than politics, the business channel had a fundamental programming flaw: the entertainment values of Fox News produced comical results when applied to business journalism.
Shortly before the business channel launched, a young female Fox Business anchor went to meet with the staff of the
New York Post
’s business desk to brainstorm story ideas.
“What do you know about business?” asked Roddy Boyd, a brash financial reporter who was then on staff at the
Post
. She told them her experience was in weather, but “I’m reading a lot. I know the Dow is up. I’m reading the blogs.”
“Why’d they hire you?” Boyd asked. She smiled and shook her breasts.
Ailes sought to infuse Fox Business with well-known talent.
In September 2009, he hired disgraced radio host Don Imus—whose show had been dropped by MSNBC two years earlier, after he said on air that the
Rutgers women’s basketball team were “nappy-headed hos”—to anchor a morning show. Around this time, he also considered poaching CNBC star Maria Bartiromo.
“Roger passed on her,” one executive involved in the talks said. “He wished she hadn’t gained so much weight. He said she went from looking like Sophia Loren to Mamma Leone. He felt he was being used to get more money from CNBC. He told us her agent should give him part of the commission, because the talks were worth another million dollars.” (
In November 2013, Bartiromo jumped from CNBC to Fox Business.)
The business network’s failure to catch on was all the more glaring given that Murdoch had acquired
The Wall Street Journal
in 2007. But Ailes spoke of the
Journal
as a threat. The paper had no synergy with Fox.
Executives noticed that Ailes resented Murdoch’s lavish support of the
Journal
’s parent company, Dow Jones, and his friendship with Robert Thomson, the former editor of
The Times
of London whom Murdoch tapped to be publisher of the
Journal
. As Les Hinton, then president of Dow Jones, accompanied Ailes on a tour of the
Journal
’s gleaming new newsroom a few floors above Fox News, Ailes said, “So, you’re showing me what I paid for.”
In the fall of 2012, Ailes held a meeting with Fox Business executives to discuss whether Fox should sign a content arrangement with Dow Jones. That year, Dow Jones was exiting a long-term partnership with CNBC and was free to sign up with Fox. “Why would I pay them anything?” Ailes said. Neil Cavuto stoked Ailes’s fears of a corporate rivalry. “
The Wall Street Journal
is a Trojan horse. They want the business channel,” he told Ailes.
Then Ailes largely banned
Journal
reporters from his air. It happened after Ailes learned that
Journal
deputy managing editor Alan Murray, who was steering the
Journal
’s expansion into video production, made a snide comment about Fox. “Alan made the mistake of telling folks how he could make FBN better,” the executive said. A few months later, a junior Fox Business staffer mistakenly disclosed the ban to a
Journal
employee. “We had to deny that there ever was a ban. It was so silly,” the Fox executive said.
The feeling at the newspaper was mutual. Some
Journal
reporters, whenever they had to bring important sources up to the office, intentionally positioned themselves in front of the screens in the elevators that broadcast Fox News.
A
fter the election debacle, Ailes’s position in the company seemed to weaken. By the spring of 2013, Murdoch and senior executives viewed Ailes as a caricature of himself. On issues like gun control and immigration, Murdoch was moving away from Ailes. “
Rupert doesn’t have a worldview, Roger does,” a senior executive said. “Roger said Rupert doesn’t understand the threat of China,” a senior producer recalled. “Roger doesn’t think Rupert understands the threat about the Middle East.”
In one meeting, Ailes told his team that Murdoch asked him to meet with Saudi prince Alwaleed bin Talal, who was at the time News Corp’s second-largest voting shareholder after Murdoch. “Roger said he wouldn’t do it,” the producer said. “He said it was the only time he told Rupert ‘No.’ ”
Top News Corp brass traded stories of Ailes’s paranoia. “He was convinced that the Democratic National Committee had targeted him for assassination,” one Murdoch family intimate remarked. “Michelle Obama had come up to him at a dinner and smiled and said, ‘I’m surprised to see
you
here.’ He took that to mean it was a real threat.” Other executives spoke of Ailes’s tangles with Joel Klein, the former New York City school chancellor, whom Murdoch hired in November 2010 to launch a for-profit education business. “Roger said, ‘The education business is a big mistake. The teachers’ unions will
never
let Rupert Murdoch educate their children,’ ” an executive said. About a year after Klein joined the company, News Corp hired Klein’s former spokeswoman, Natalie Ravitz, to serve as Murdoch’s chief of staff. Ravitz went to Fox News to introduce herself to Ailes. She reported back to colleagues that her conversation with Ailes went well. Ailes had a different take. “I’ve just seen that spy!” he later told Chase Carey. “I know she’s a Clinton spy and Joel’s spy!”
Ailes was more isolated than ever. “Roger doesn’t trust anyone around him anymore,” an executive said after the election. No one was spared from Ailes’s eruptions. He vented constantly about his talent. He complained about
The Five
co-host Andrea Tantaros, who was a former political consultant. “She’s pretty, but did she ever get anyone elected, even a dog catcher?” When Gretchen Carlson’s name came up, Ailes pointed out she was once Miss America, then added, “It must not have been a good year.” Her co-host, Brian Kilmeade, was a “soccer coach from Long Island.” Bill O’Reilly was a “book salesman with a TV show.”
No one seemed safe, even his longest-serving confidants.
On the afternoon of July 25, 2013, Ailes called Brian Lewis to his office. News Corp’s outside counsel Ronald Green was sitting in the room. Ailes told Lewis to take “a vacation.”
“A paid vacation?” Lewis asked.
“Yeah,”
Ailes said.
Before Lewis walked out of his office, Ailes said to him, “You’re one of the best I’ve
ever
seen. But I’m still better.”
Over the next several weeks, Lewis negotiated a separation agreement.
On August 20, after talks derailed, Fox released a statement saying that Lewis was terminated for cause, due to “issues relating to financial irregularities” as well as “multiple, material and significant breaches of his employment contract.” Ailes cut off Lewis’s salary and dispatched Fox executives and personalities to trash Lewis publicly as a turncoat and a nonperson.
Lewis retained powerhouse lawyer Judd Burstein. “People hire Burstein not because they’re guilty. They hire him because they’re pissed-off!” Lewis told people.
On August 27, Burstein fired off a statement to
Gawker
, a move designed to tweak Ailes. “Roger Ailes and Newscorp have a lot more to fear from Brian Lewis telling the truth about them than Brian Lewis has to fear from Roger Ailes and his toadies telling lies about Brian Lewis,” it read. “The toadie” was Lewis’s well-known nickname for Shine. It was Lewis’s way to send a message to Shine that he knew Shine had carried out Ailes’s press attacks against him.
The veiled threat brought Ailes to heel.
In September, Burstein met with Ronald Green and Peter Johnson Jr. A year earlier, Johnson tried to salvage Lewis’s relationship with Ailes. “Brian, you’ve got to show him some respect,” Johnson said. “You and I are like the sons he never had.” Later that fall, Fox settled with Lewis for millions. To friends, Lewis expressed relief to be on the outside. He talked about opening a Subway franchise in New Jersey. Lewis had been in the game long enough not to fear the end. “I got whacked,” he told a friend.
Even as Lewis and Ailes’s longtime relationship collapsed, others close to Ailes continued to profess adulation. When Beth Ailes received an honorary doctorate from Mount Saint Mary College in May 2012, she said in her remarks, “I am the wife of a great man, Roger Ailes.” “Roger Ailes is like my second father,” Shepard Smith told a journalist that January. “He’s one of the greatest men I’ve ever known. I respect and admire him infinitely.” “He changed my life,” Sean Hannity said on camera in
March 2013. “I would not be known in American households to whatever extent I might be if he didn’t take a chance on me.” “Who has been your biggest career influence?” a man asked Megyn Kelly in October 2013 over Twitter. “My boss Roger Ailes,” she responded.
A month before the 2012 election, Joe McGinniss thought a lot about Roger. It was a tough time. McGinniss, who had turned seventy, had recently been diagnosed with prostate cancer. Roger was treating him like family. “He said, ‘You never have to worry about money. If you get to the point where you can’t work anymore, just let me know, I’ll write a check.’ ” Roger made some calls and put him in touch with Dr. Eugene Kwon, one of the country’s preeminent specialists for his particular condition. McGinniss was touched by Roger’s warm generosity, but also felt sad for his old friend, recalling an episode of
The Sopranos
, the HBO mob drama. “It was the one where Carmela says to Tony: You don’t have friends. All those people? They laugh at your jokes, but that’s just because you’re the boss and they’re afraid of you. And he says: What are you talking about?” McGinniss went on, “Then they have a scene later in the show where Tony says a really stupid joke, and all of a sudden, all these guys are going
‘Hah hah hah.’
And then it slows down to real slow motion, and you just see Tony looking at their faces with this fake laughter. And he’s realizing that, of course, she’s absolutely right.”