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The Dichotomy of Fox News: Ratings Soar Along With Scandals, Settlements

These should be halcyon days for Fox News Channel.

The network that dominates cable news is seeing even more ratings growth thanks to the non-stop political news cycle and the public’s fascination with President Donald Trump. A 9 p.m. transition from the popular Megyn Kelly to Tucker Carlson has taken place without a hiccup. Indeed, the network’s viewership among the target adults 25-54 audience soared in the first quarter, spiking 30% over the year-earlier period.

And yet, Fox News continues to find itself enmeshed in troubling disclosures of behind-the-scenes behavior and a rough-and-tumble work culture that could have larger ramifications for parent company 21st Century Fox, which relies on Fox News for as much as 25% of its annual operating income.

The latest revelation: On Saturday, the New York Times reported that five women have received payments coming to about $13 million in exchange for agreeing not to pursue litigation or speak about accusations related to sexual harassment or inappropriate behavior by Bill O’Reilly, the veteran Fox News broadcaster who is the linchpin of the network’s primetime lineup.

Saturday’s report comes as Fox News Channel continues to grapple with legal matters related to last year’s departure of Roger Ailes, the founder and former CEO. He was ousted in 2016 in the wake of an internal investigation into sexual harassment allegations levied at him by Gretchen Carlson, a former Fox News anchor. The probe by the law firm of Paul, Weiss, Rifkind, Wharton and Garrison, turned up other accusations. Ailes has denied all charges, but a number of settlements 21st Century Fox and Fox News have made in connection with that matter and other instances of inappropriate behavior at the unit have surfaced intermittently for weeks. In July, Ailes will have been gone from his Fox News offices for about a year, but there are some indications that the company at that time could still be dealing with some resulting fallout of his alleged actions.

In February, 21st Century Fox acknowledged in a statement that it had “been in communication with the U.S. attorney’s office for months,” a veiled reference to the fact that U.S. government attorneys are looking into payments by the network and its parent to women who claimed to have been harassed by Ailes. 21st Century Fox also said at the time that it “will continue to cooperate on all inquiries with any interested authorities.”

Since Ailes’ departure, a number of settlements with former Fox News employees have been disclosed. Carlson agreed to a settlement last year believed to total as much as $20 million. Laurie Luhn, a former booker and event planner at Fox, is believed to have received a settlement coming to as much as $3 million after alleging a long pattern of harassment by Ailes, which he denied.

Other matters have also surfaced:  A settlement between Fox News and former contributor Tamara Holder was revealed earlier this month. Holder had levied sexual-harassment allegations against Francisco Cortes, a VP of Fox News Latino, in October. Earlier this week, two African-American employees of the network alleged in a lawsuit filed in New York State Supreme Court in the Bronx that they had been subject to racial discrimination by Judith Slater, a comptroller at Fox News, who the network has said was fired.

The O’Reilly matters are separate, to be sure, but pose similar challenges to the operation. It is hard to envision a Fox News without”The O’Reilly Factor.” Once known as “The O’Reilly Report,” his program attracted an average of more than 3.9 million viewers in the first quarter of 2017, making his program the most-watched cable-news program of the period. And even though O’Reilly has been walking viewers through his “Talking Points Memo” since 1996, his audience is growing. Consider the fact that the “Factor” won an average of 3.3 million viewers for all of 2016. A boost from O’Reilly has built the careers of other Fox News notables, including Kelly, who once contributed to his hour and benefited from his audience lead in when she anchored Fox News’ 9 p.m. slot, or Jesse Watters, a “Factor” regular who was recently given his own weekend program on the network’s schedule.

In a statement, 21st Century Fox said it had investigated allegations related to O’Reilly, who denied “the merits of these claims” and “resolved those he regarded as his personal responsibility.”

“Just like other prominent and controversial people, I’m vulnerable to lawsuits from individuals who want me to pay them to avoid negative publicity. In my more than 20 years at Fox News Channel, no one has ever filed a complaint about me with the Human Resources Department, even on the anonymous hotline,” O’Reilly said in a statement posted Saturday on his web site. “But most importantly, I’m a father who cares deeply for my children and who would do anything to avoid hurting them in any way. And so I have put to rest any controversies to spare my children. The worst part of my job is being a target for those who would harm me and my employer, the Fox News Channel. Those of us in the arena are constantly at risk, as are our families and children. My primary efforts will continue to be to put forth an honest TV program and to protect those close to me.”

The Times report, citing more than five dozen interviews with current and former employees of Fox News Channel and its parent companies, alleged five different women received payouts after alleging inappropriate behavior by the host, two as recently as 2016. One of them, settled in 2002, was not related to sexual harassment.

O’Reilly is in the last year of his current contract with Fox News Channel, and the deal is believed to expire at the end of this year. Rupert Murdoch, executive chairman of Fox News Channel and 21st Century Fox, told The Wall Street Journal he’d like the anchor to remain with the network. In February, O’Reilly told Variety he was still considering the matter. “What I have to deal with is an enormous audience. The audience for the ‘Factor’ is in the stratosphere, and we believe it’s because in a polarizing time, we are not doing the polarizing game,” he said, noting that he feels his show tells viewers what happened and how he feels about it. “I haven’t made any decision about anything.”

Meanwhile, Fox News has had other bursts of controversy in recent weeks. Judge Andrew Napolitano, a former New Jersey Superior Court judge and longtime legal analyst and anchor for the network, was benched in March for a few days after alleging without evidence that President Barack Obama used British intelligence to surveil Donald Trump before he was elected President of the United States. The President repeated the allegations and sparked an international incident One Fox News anchor, Shepard Smith, told viewers subsequently that the network’s news staff could not confirm the information. Napolitano was back on air this week at Fox News Channel, saying he still believed the allegations.

Sean Hannity, its popular 10 p.m. anchor, recently made headlines when he was confronted by news veteran Ted Koppel in a “CBS Sunday Morning” interview, in which Koppel told Hannity his program was a bad influence on the national conversation about politics and public policy.

The question is not whether any of these allegations or incidents are distasteful, troubling or disturbing. Many of them are. But none of them to date has caused a decline in viewership at the network, which is good news for 21st Century Fox, given its dependence on Fox News as an earnings engine.

The drama swirling around Fox News in the past year sounds like the stuff of a movie — and it may soon be one. Documentarian Alex Gibney is working on a project related to the Ailes controversy. Gabriel Sherman, the New York writer who has written an unauthorized biography of Ailes and who won plaudits for his coverage of last year’s allegations, last year teamed with Blumhouse Television to create a proposed scripted mini-series about Ailes’ life and controversies.

A network with a mandate to report the news has been making news of its own all too often of late.

 

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