Fox seeks to extend cable news domination in post-Ailes era

Fox News dominated the cable news landscape for 20 years under Roger Ailes but now faces questions about whether it can extend its reign going forward.

The shocking departure of Ailes amid allegations of sexual harassment has left Rupert Murdoch, the 85-year-old executive chairman of 21st Century Fox, in charge. But with a number of other major media properties to attend to and age considerations, Murdoch's role running day-to-day operations out of New York will only be in an interim capacity.

A source familiar with the situation says it could be "multiple months" before any permanent successor to Ailes is decided upon.

The same source says there's no rush to make a decision because current management at the network is stable in the hands of Murdoch; Bill Shine, senior executive vice president of programming; and Jay Wallace, executive vice president of news and editorial.

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Rivals of Fox see an opportunity, while longtime political fans of the network, who saw it buttress the conservative political movement, are openly worried the network could shift under new leadership.

Murdoch’s sons, James and Lachlan, serve as co-chairmen and CEOs of Fox News’s parent company and could use Ailes’s departure to reinvent the network.

“Fox News will be going through a dramatic transformation as it figures itself out without its creator,” said Jason Shepard, chair of the communications department at California State University, Fullerton.

“In the short term, I suspect we will see minimal turnover and experimentation,” he said. "But in the long term, we may see softening of the most radical elements of programming and perhaps see more ‘fair and balanced’ news.”

Sky News in Britain, which is also operated by the Murdochs, doesn’t have the edge of Fox News in the United States. If there is a change, Shepard says it will be a sign that “the Murdoch sons want to put their stamp on the company by importing practices from Sky News in Britain.”

Shepard’s view isn’t necessarily a majority opinion.

The cable news network makes its parent company billions, and some think that alone means there will be no change.

Research firm SNL Kagan estimates Fox News generated $2.3 billion in ad sales alone last year. Pivotal Research analyst Brian Wieser says the operating profit for Fox News was $1.6 billion in fiscal 2015. That's nearly 25 percent of 21st Century Fox's overall operating profit.

“At this point Fox News is such a fine-tuned and well-oiled machine, I think even Mickey Mouse could step in and keep it running," said Doug Spero, associate professor of communication at Meredith College and TV veteran with ABC, CBS and NBC on his resume.

“They attract the same demos year after year and they’ve dominated with their prime-time lineup. Bill O’Reilly has been No. 1 for years,” he said.

“As the saying goes, ‘If it ain’t terribly broken, don’t terribly fix it.’ Would they change the ideology or content? I don’t think so,” said Spero. “They’ve carved out their audience, and if you’ve got the market, why mess with it? If the cash register keeps ringing, I can’t imagine the Murdoch family will allow that to stop.”

Fox has easily been No. 1 in cable news for the past 15 years.

The network even recently finished at the top of all cable channels, including ESPN.

The competition with CNN and MSNBC hasn't even been close, with Fox often beating the two audiences combined in both total viewers and the 25-to-54 demographic.

At the same time, many of Fox’s stars are aging, and it is not clear younger stars such as Megyn Kelly will stay with the network.

CNN has been making gains lately under industry veteran Jeff Zucker, who ran NBC before eventually going to CNN in 2012, and is in a better positions of the two networks below Fox to make a serious challenge.

But is Fox vulnerable to a challenge?

The momentum of election years — particularly this one, with the ratings gold that is Republican presidential nominee Donald TrumpDonald John TrumpHouse Democrat slams Donald Trump Jr. for ‘serious case of amnesia’ after testimony Skier Lindsey Vonn: I don’t want to represent Trump at Olympics Poll: 4 in 10 Republicans think senior Trump advisers had improper dealings with Russia MORE — doesn't always carry over into election off-years.

MSNBC, for example, finished second to Fox News after the 2012 reelection year of President Obama. The network finished so strong that MSNBC President Phil Griffin made the bold prediction that MSNBC would catch Fox in ratings by the end of 2013. The exact opposite happened, with MSNBC falling backward and behind a then-struggling CNN instead.

The key for both CNN and MSNBC, to be truly competitive with Fox, is to have the kind of talent and compelling content foundation to keep audiences tuning in after the votes are counted on Election Day.

“Ailes has built a very strong machine. No one can deny that he’s built an empire at Fox News,” said Spero. “Yes, it’s bigger than one man, but it’s basically his baby. At this point, it’s so solid I don’t think it’ll budge even 2 ratings points, even after he’s gone.”

Ailes was undeniably Fox’s most valuable employee.

But who will guide Fox News into next year and beyond?

Outside observers differ over whether the company will look outside for leadership.

Some media analysts see the top candidate as Shine. Under Shine, the business network has been enjoying its best 18 months in its history since he was promoted to handle the day-to-day operations in late 2014, even beating rival CNBC on some occasions, once an unthinkable feat.

Shine has been with the network since its inception in 1996, working his way up the ranks from producer to senior programming executive.

Wallace is also seen as a strong contender for the job, having recently been promoted to executive vice president of news and editorial in April. Wallace replaced the now-departed Michael Clemente, who left the network last week for reasons, according to the network, unrelated to Ailes's departure.

Wallace has also been with Fox News since its beginning, having started out as a tape coordinator. He now oversees daytime and weekday news programming.

The third and final serious contender internally is John Moody, executive vice president and editor. Moody has been with the network for four years and is Rome bureau chief for Time Magazine.

Another name making the rounds is David Rhodes. The current president of CBS News extended his contract last year through 2019.

But if the goal of the Murdochs is to use the Ailes departure as an impetus to reinvent Fox News as a more traditional news outlet, Rhodes, 43, may be a viable option since he is also a former Fox News executive.

But David Parsons, a public relations executive for more than 40 years, with a focus on corporate and crisis communications, said another name with an impressive resume should be considered.

“I would see the candidate being embraced as having direct news experience, still young enough to navigate the digital world and all — someone like David Westin, former head of ABC News from 1997 to 2010," said Parsons. “He was well respected and well liked, knows the political ropes and the talent handholding that are a big part of the picture.”

Chad Wilkinson, a longtime cable news producer and president of Liberty Media Strategies, sees Fox strongly considering a change but ultimately keeping with what's worked for the past two decades in turning to Shine.

“In the short term, I think Rupert taps Bill Shine to run the operation,” said Wilkinson.

“Shine is respected by the staff and has done a strong job leading Fox Business since Kevin Magee has exited.

“Long term, I think Murdoch thinks long and hard about David Rhodes but ends up staying the course with Bill Shine,” Wilkinson said. “Fox News is a moneymaker, and staying the course with someone that knows the operation and what made it a success will win the job.”