A Year After Ailes’ Ouster, Fox News Soldiers on Amid Tumult and Stays No. 1

Fox News Soldiers On After Ailes and Stays No. 1
Rex Shutterstock/Fox News

A few days ago, a TV journalist was verbally sparring with Sarah Huckabee Sanders, the White House deputy press secretary – and it wasn’t one of the usual suspects. It wasn’t CNN’s Jim Acosta or NBC’s Kristen Welker, but rather Bill Hemmer of Fox News Channel.

“It seems like it is entirely more personal than it needs to be,” Hemmer told Sanders, referring to the tweets from President Donald Trump that disparaged MSNBC morning anchors Mika Brzezinski and Joe Scarborough. “Is there something we need to know more about this relationship?” Hemmer pressed again a few minutes later. “There is no backstory that has not become public that would lead him to choose this wording?”

Sanders didn’t budge. It wasn’t a “gotcha” moment, but the line of questioning was more aggressive than critics of Fox News might expect.

Hemmer is glad to be focused more intently on his job covering the news after months of watching his own network make plenty of headlines. In the 12 months since Roger Ailes was ousted as Fox News CEO in July 2016, the 21st Century Fox division has been turned inside-out by scandals, lawsuits, hasty departures and even more hastily designed changes to its primetime lineup.

“In all candor, this was arguably the most challenging year in our professional lives,” Hemmer told Variety. “It was clearly the most challenging year in memory, internally and externally.”

Fox News’ internal drama isn’t entirely over. Just last week, Fox Business Network anchor Charles Payne was suspended amid allegations of sexual harassment — claims Payne vigorously denies. But from Rupert Murdoch on down, there has been a whirlwind of effort at the top of 21st Century Fox and Fox News to move the division past its annus horribilis and into a new chapter. The fact that Fox News has remained No. 1 for the year to date in every key TV news ratings measure is a testament to the loyalty of its core audience and the surge in news viewership overall as President Donald Trump keeps the news cycle churning.

The most important thing, said Jack Abernethy, co-president of the 21st Century Fox unit, is to listen to an audience that may not be the youngest among cable-news networks but is extremely devoted.

“Over most of last year, we had six of the top eight management positions turn over, and three of the four primetime people left. Some of that has been planned, but most has been unplanned. We’ve had big shifts,” Abernethy told Variety. “We have been tasked with putting in new people and training people and sending a signal that there’s a new environment.”

Nobody realized it at the time, but the new era dawned for Fox News on July 6, 2016, the day former anchor Gretchen Carlson filed her sexual harassment lawsuit against Ailes, which sparked an internal investigation by 21st Century Fox. Ailes, a towering figure in TV news and politics, shocked the industry by resigning 15 days later. He continued to vehemently deny allegations of harassment from Carlson and others until his death in May.

Ailes’ ouster prompted a flood of legal action from Fox News employees and contributors alleging that a culture where sexual harassment and racial discrimination ran rampant went unchecked by management and where private settlements were commonplace. That storm led to the departures of marquee host Bill O’Reilly in April and longtime programming chief Bill Shine in May, and it also contributed to Megyn Kelly’s decision to head to NBC News earlier this year. In the meantime, the U.S. Attorney’s Office is probing the specifics of the numerous Fox News settlements and whether illegal tactics were used in dealing with employees of the network.

Abernethy, who was present when Fox News started in 1996 before leaving to run the company’s TV-station group and returning in August of last year, declined to comment on the lawsuits or the federal investigation. For all the behind-the-scenes changes at Fox News in the past year, Abernethy stressed that the programming philosophy has not changed. Fox News die-hards, he says, fuel the network’s business. Acknowledging the older skew of Fox News’ viewership, he said the network is less focused on its all-news competitors’ ratings in the adults 25-54 demo, the target audience for most cable news advertisers.

“We have a very large, loyal audience that is somewhat older, but is still enormously profitable for us. Our growth is a function of something other than adults between 25 and 54,” said Abernethy. “We have very healthy subscriber growth. Many loyal fans are driving the pricing and depth of those revenues, and you can’t limit yourself to 25 to 54.”

Fox News Channel commands by far highest monthly subscriber fee among the cable-news networks, according to market research firm SNL Kagan/S&P Global Market Intelligence. Fox News is seen generating $1.55 per subscriber per month this year, Kagan said, compared to 79 cents for CNN and 26 cents for MSNBC. As a result, its revenue from distribution is significantly higher than the money it makes from advertising. Fox News Channel was projected to generate $1.67 billion in affiliate revenue in 2016, SNL Kagan said, compared with $952.8 million in net advertising revenue.

That doesn’t mean the network isn’t focused on its ratings. Despite a May surge by MSNBC in primetime, Fox News captured more viewers than either MSNBC or CNN in that demo and overall for the second quarter of 2017. It can’t afford to take its eye off rivals, however. MSNBC’s “The Rachel Maddow Show” was the most watched cable-news program among the advertiser demo in the period. “Both competing networks spike from time to time, but we take the long view,” says Abernethy.

O’Reilly’s departure was accelerated by a wave of advertiser defections from his program amid a pressure campaign mounted by his fiercest critics. But there has been no lasting impact on the network overall. Upfront sales for Fox News so far are pacing ahead of last year, even with the tough comparable to a presidential election year. Executives expect ad volume and rates to rise.

Scandal-battered Fox News could be benefiting from CNN’s recent travails, suggests Jeffrey McCall, a media studies professor at DePauw University. CNN, typically the most centrist of the nation’s general cable-news outlets, has been thrust into an adversarial relationship with the White House as it continues to report on the controversies swirling around President Trump.

“CNN’s controversies and running battles with Trump remind Fox News  viewers about why those viewers value Fox News in the first place,” says McCall, who notes that despite Fox News’ many executive and talent changes, “the channel’s ratings remain solid.”

Meanwhile, new rivals are courting the Fox News audience. Smaller conservative-focused outlets like Newsmax or One America News Network are cited as potential landing places for O’Reilly, Shine and former Fox News anchor Greta Van Susteren, who just left MSNBC after six months. There has been much chatter in TV news circles about Fox News being vulnerable to upstarts on the right after the loss of “The O’Reilly Factor” in particular.

Abernethy isn’t buying it. New entrants have a tough road to travel to achieve the scale of a Fox News. “There are many niche opinion offerings with limited distribution on cable, radio and online. A 24/7 fully distributed, strongly branded news channel with worldwide news capability is a whole different business,” he said. “Launching one today would be very difficult and very costly.”

And Fox News has hardly dropped its conservative voice in primetime. Tucker Carlson, who inherited O’Reilly’s 8 p.m. anchor slot, has maintained his predecessor’s legacy of calling out what he views as liberal bias in mainstream news coverage. He cites what he sees as misguided focus at rivals on the suspicions that Trump campaign officials colluded with Russia on cyber-malfeasance connected to the 2016 election.

“I think that the collusion story is a hoax,” Carlson told Variety. “This is not out of deference to the Trump administration. There are a lot of things you can criticize them for. But Trump did not collude with Vladimir Putin to win the election. For me, this has been a fascinating window into what mass hysteria looks like up close.”

At the same time, Carlson said he’s eager to do more in-depth reporting on his show, including week-long looks at specific topics. He has already focused on the nation’s opioid crisis and thinks he can do similar examinations of subjects that may or may not be politically divisive.

Carlson said he initially questioned whether he had a shot at succeeding in O’Reilly’s wake. Total viewership for “Tucker Carlson Tonight” is down 5% in the second quarter, compared to “O’Reilly Factor” – a signal some of the previous occupant’s oldest viewers have left. He has been encouraged by a 16% uptick in viewers in the advertising demo. “I’m grateful for it,” he said of the ratings.

As Fox News strives to move forward, several anchors said there is also heightened emphasis on breaking news and more ambitious editorial projects. “Rupert Murdoch is in charge,” said Hemmer, a reference to Murdoch taking the role of executive chairman at Fox News after Ailes’ departure. “I love to talk about the news with him, and he wants news,” he said.

Rupert Murdoch has been a big presence at Fox News during the past year but speculation continues that the parent company — led by his sons James and Lachlan Murdoch — is quietly trying to recruit a TV news heavy hitter to take the chairman reins from Rupert. “I can’t say that more change is not on the way,” Hemmer acknowledged.“We have a great and settled leadership team which I enjoy working with every day,” Rupert Murdoch said in a recent statement.

Shannon Bream was recently given a seat opposite Hemmer on the morning program “America’s Newsroom” after spending many years covering the Supreme Court and Capitol Hill. She said Fox News has made it clear to staffers in the post-Ailes period that there is a commitment to changing the internal environment for employees. “If you want to report something or have a concern about something, there are many different ways to do that. You don’t have to feel like there is one person who is the gateway,” she said.

Executives are open to tweaking the network’s primetime slate, said Abernethy, but see no changes in the immediate future. Shine’s post as co-president is not likely to be replaced, he added. Suzanne Scott, another 20-year Fox News veteran, was promoted to president of programming after Shine’s departure.

Fox News is used to taking a beating from critics for the tilt of its opinion programming. The intense public scrutiny of its internal workings — as detailed in legal briefs and tell-all interviews — added another layer of stress for those employees far removed from the center of the controversies.

After a year of tumult, Abernethy is hopeful that the worst is behind them. The primary focus has to be on serving the Fox News faithful, who have by and large stuck with the channel through thick and thin.

“We are going to get a continuing flow of critiques, but my view is we need to listen to the audience,” he said.

(Pictured: Bill Hemmer, Tucker Carlson, Shannon Bream)