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Roger Ailes Leaves Long Shadow at Fox With Complicated Legacy

Variety logo Variety 5/23/2017 Cynthia Littleton
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Even some of Roger Ailes’ closest friends and admirers admit that the man routinely described as “larger than life” has left a complicated legacy.

There’s no disputing that Ailes, who died May 18 at 77, turned Fox News Channel into a political and cultural force, generating outsize profits for Rupert Murdoch’s empire along the way. But his personal indiscretions and attitudes shaped in the “Mad Men” era of workplace culture proved to be his professional undoing. The state of Fox News today, 10 months after Ailes’ abrupt exit, reflects the essential conflict of its founder. He was undeniably one of the most influential, innovative and successful media mavens of the past 50 years. He was also the highest-ranking media executive to have been taken down by a sexual harassment lawsuit.

“It’s all so complicated. Everything here was and is … as he was,” longtime Fox News anchor Shepard Smith said of Ailes during an emotional on-air tribute. Smith, who joined Fox News a few months before the channel’s October 1996 debut, described Ailes as a “media genius, revolutionary in American politics, shaper of American history [and] an uproariously funny man with now well-documented flaws.”

By so many accounts, Ailes was a programming genius, a political savant who could see around corners and was unfailingly loyal to those he liked. By other accounts, including legal complaints, he was a paranoid bully who enjoyed using his power to punish enemies, reward friends and pressure women into providing sexual favors. The latter may have been commonplace in the early 1960s when Ailes got his start as a producer on “The Mike Douglas Show,” but by the time he was in his 20th year atop Fox News, such activity was seeding a minefield. As of last week, the land mines were still going off within the halls of Fox News.

Fox News is facing more than a half-dozen lawsuits alleging that sexual harassment and discriminatory activity were allowed to run rampant under Ailes’ leadership. The mushrooming controversy spurred the shocking exits during the past month of two people who were as inextricably linked to Fox as Ailes: star anchor Bill O’Reilly and co-president Bill Shine.

The U.S. Attorney’s Office in Manhattan is understood to be probing the details of alleged settlements paid to those who accused Ailes and O’Reilly of sexual harassment and whether they were properly disclosed to shareholders by Fox News’ parent company, 21st Century Fox. That investigation, which also involves the U.S. Postal Inspection Service, has also reportedly widened into whether intimidation tactics were used against employees at the network. Reflecting Ailes’ earlier career as a political strategist, his penchant for keeping dossiers on both friends and enemies, deploying private investigators and even directing covert propaganda efforts online have come to light. His death complicates the investigatory process, raising questions about whether federal prosecutors will continue to pursue the case. In the civil litigation, Ailes’ inability to address allegations could give Fox further impetus to settle claims.

Meanwhile, as Fox News makes its own headlines daily, it’s scrambling to find the right programming mix post-O’Reilly and post-Megyn Kelly, who exited in January for NBC News. The primetime programming lineup, the primary driver of Fox’s dominance in the cable news wars, was hastily revamped after O’Reilly’s April 19 exit. O’Reilly’s replacement, “Tucker Carlson Tonight,” has done a credible job under the circumstances, but viewership in the hour is down compared with the “O’Reilly Factor” benchmark. Fox News is also at risk of alienating a core constituency that may well feel the channel bowed to political correctness in ousting Ailes and O’Reilly.

To the shock of cable news watchers, a resurgent MSNBC has been riding a wave of anti-Trump outrage and regularly beating Fox News in primetime in the adults 25-54 demographic. In recent weeks, Fox News has even ranked third behind CNN on some nights — an unthinkable reversal of fortune for a network that had a seemingly insurmountable lead for more than 15 years. The demo shakiness reflects the older skew (median age, 68)­ of the Fox News audience. But the sheer size of its advantage over CNN and MSNBC in total viewers helped offset its age concerns.

Parent company 21st Century Fox does not break out the financials for Fox News from the rest of its cable unit, but Pew Research Center estimates Fox News in 2015 brought in an estimated $2.3 billion in revenue — $1.4 billion from affiliate fees and $844 million from advertising. That’s compared with total revenue of $1.2 billion for CNN and $518 million for MSNBC. Affiliate fee revenue for Fox News is sure to remain stable for the near term due to long-term contracts with MVPDs, but the advertising component rises and falls with viewership. Pew estimates Fox News’ profit grew double digits in 2015 to $1.5 billion, compared with $381 million for CNN and $227 million for MSNBC.

Among Ailes’ greatest strengths in leading Fox News was nurturing new talent to ensure that the network had a deep on-air bench. But in his final few years at the helm, his typical 24/7 work pace was slowed by health issues. The talent and program development pipeline thinned, and growth in other areas stalled. Fox News is also well behind CNN and MSNBC in the depth and breadth of digital operations, which are the latest front in the cable news wars.

Ailes, a native of Warren, Ohio, relished his self-proclaimed outsider status in the mainstream media world. That perspective continues to permeate much of Fox News’ programming. Ailes was the master of setting the day’s narrative by directing the stories that got big play.  “I built this channel from my life experience,” Ailes told The New York Times in 2010. “My first qualification is I didn’t go to Columbia Journalism School.”

He famously built Fox News into a fortress within 21st Century Fox. The division operated largely autonomously from the rest of Fox’s TV operations, its more than $1 billion in profits serving as a moat. His downfall came amid a generational shift among the Murdochs atop 21st Century Fox and cultural changes that made his bare-knuckle management style untenable.

Fox News has brought in a new chief financial officer and head of human resources to address the shortcomings of Ailes-era management oversight. Rupert Murdoch took the helm as Fox News chairman amid the storm of Ailes’ quick exit last July. Since then, a core group of longtime Fox News staffers have been running day-to-day operations in a triage fashion. Suzanne Scott, a 20-year veteran, was promoted to president of programming this month. It’s no secret that the Murdochs have begun a search for an outsider to come in as CEO. It’s a plum but daunting assignment, industryites say.

As the Ailes tributes flowed on air last week, Fox News’ muted response to a rollicking news cycle that rocked the Trump presidency was the surest sign of its post-Ailes problems. The channel built on the strength of its voice has lost its narrator-in-chief. The biggest test of the mettle of the organization Ailes built will be how well it survives the end of his reign.

Brian Steinberg contributed to this report.

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