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The Final Straw for Roger Ailes at Fox News Forces Murdochs to Take Action

Just one year ago, Roger Ailes’ future at Fox News couldn’t have seemed rosier.

His star anchor, Megyn Kelly, was about to launch a series of news specials that executives believed might propel her to the same heights enjoyed by Barbara Walters. His network was on the cusp of broadcasting Republican presidential debates that would garner huge ratings. And he had enough confidence in his position that when James and Lachlan Murdoch were named to executive positions at the network’s parent, 21st Century Fox, he told Variety he expected to take his marching orders from their father, Rupert Murdoch. “My job is to report to Rupert, and I expect that to continue,” Ailes said.

Now Fox News is on the verge of losing its chief architect and guiding force. As of July 19, Ailes and 21st Century Fox were in talks that would strip him of his post; the conditions of his exit are reportedly being negotiated, including a possible $40 million payout.

Matt Furman/Redux

The revelation followed days of seemingly unrelenting pressure in the form of damaging news leaks, the latest of which suggested that Ailes may have sexually harassed Kelly 10 years ago. But even prior to that, the Murdochs were close to forcing Ailes out; one report said they had given him until Aug. 1 to resign.

Gretchen Carlson, a Fox News anchor who left the network in June, lit the spark for the imbroglio. She filed charges earlier this month alleging that Ailes propositioned her sexually and derailed her career after she complained about treatment of women at the cable-news network. Ailes denied her allegations, countering that Carlson was seeking revenge after her contract wasn’t renewed.

Susan Estrich, Ailes attorney, told Variety on July 19 that Ailes continues to work for Fox News under his current employment contract — a statement echoed by the media conglomerate. Asked if Ailes was negotiating his departure, she said, “There are a lot of ideas floating around, but no final decision has been made by anybody.”

An Ailes exit would raise all kinds 
of thorny issues for the Murdochs. Fox 
News is the company’s most profitable division, and its power among viewers 
helps 21st Century Fox gain placement 
for its many other TV networks, including FX and Fox Sports 1, on cable and satellite systems. Three of Fox News’ key anchors — Sean Hannity, Greta Van Susteren, and Bill O’Reilly — are believed to have contracts → with clauses that free them to depart the company if Ailes were to leave, raising the possibility of an on-air exodus with serious ratings consequences.

While Ailes saw at least a dozen current and former staffers publicly support him, another line began forming behind Carlson in the days after her lawsuit was filed: Multiple women gave interviews to New York magazine in which they shared their own allegations of sexual harassment against Ailes that go back decades. But throughout these dueling testimonies, the focus increased on Kelly, who maintained silence as her representatives were in talks with the network over the possibility of her continuing to work there.

But when a report surfaced July 19 alleging that Kelly had also disclosed a sexual harassment incident to investigators conducting an internal review of Ailes at 
the Murdochs’ behest, Ailes’ fate appeared 
to be sealed.

Estrich issued a statement later that day denying Ailes’ inappropriate behavior toward Kelly. “Roger Ailes has never sexually harassed Megyn Kelly,” she said. “In fact, he has spent much of the last decade promoting and helping her to achieve the stardom she earned, for which she has repeatedly and publicly thanked him.”

Carlson’s camp kept the pressure on Ailes, encouraging sexual-harassment victims to end their silence. “It’s time for us to come out of the shadows and let our voices be heard,” she said in a video released July 19 on her Twitter account.

Fox News’ undiminished stature was evident this week when its coverage of the first night of the Republican National Convention attracted more viewers overall than CNN or MSNBC — including the demographic most coveted by advertisers, people between 25 and 54.

“Even in 2015, when Ailes renewed his contract, there was concern on Wall Street that his days might be numbered, given his past clashes with the Murdoch sons.”

When Fox News launched in 1996, CNN had been around for 16 years. MSNBC, then a joint venture of Microsoft and NBC News, had debuted earlier in the year. Nevertheless, Fox News slowly but surely rose to ratings dominance by positioning itself, particularly in primetime, as a conservative counterweight to a news ecosystem criticized for leaning to the left. That Ailes — who prior to his rise in the news business had been a consigliere to leading Republican politicians — was the man who made Fox News a right-wing bastion came as no surprise.

Meanwhile, the contretemps at Fox News may do nothing to derail Carlson’s legal strategy, which is focused on Ailes and not the company itself. Estrich filed July 15 to have Carlson’s case moved from New Jersey to New York City, where his reps hope the matter can be settled in arbitration, out of the public eye.

“Regardless of what Roger Ailes’ employment status is at Fox, Gretchen Carlson’s lawsuit continues at its own steam and pace,” said Allan Ripp, a spokesman for Carlson and her legal team.

Even in 2015, when Ailes renewed his contract — said to be a rich multi-year deal that expires in 2018 — there was concern on Wall Street that his days might be numbered, given his past clashes with 
the Murdoch sons. It’s no secret that Ailes butted heads with Lachlan more than a decade ago when the latter oversaw the Fox Television Stations group, which Ailes still runs. Rupert Murdoch’s failure to side with his son was believed to be a key reason Lachlan quit his post as deputy chief operating officer in 2005.

Now it’s Ailes turn to exit. Fox has given no indication as to what the succession plan will be. While he would leave behind several top lieutenants at Fox News capable of taking the reins, like exec VP of programming Bill Shine, the parent company may want to bring in fresh 
blood from either another division at 
the conglomerate or from outside the company. Shine could potentially step in on an interim basis while the Murdochs take the time to weigh their leadership options for the long term.

Regardless of who is sitting atop Fox News, there is the biggest question of all: Can this property be the same without the man so inextricably tied to it? Ailes was notorious for running the network with a firm grip, particularly during a period of upheaval as the network often found itself at odds with presidential candidate Donald Trump.

A Fox News without Ailes “would 
definitely be a challenge to operate for the network’s parent,” suggested David Caputo, a professor of political science at Pace University in New York. “If they were to remove Ailes, I think some conservative viewers would argue that he’s a victim of political correctness, and that could hurt Fox.”

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