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Ailes' departure poses unexpected challenges for Fox

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Roger Ailes, CEO of Fox News Channel, has resigned amidst sexual harassment allegations, including claims from broadcasters Gretchen Carlson and Megyn Kelly. USA TODAY



Fox News chairman Roger Ailes walks with his wife Elizabeth Tilson as they leave the News Corp building in New York City on July 19, 2016.(Photo: Drew Angerer, Getty Images)


So what does the future hold for Fox News?
Roger Ailes’ reign as its<span style="color: Red;">*</span>chief executive came to an ignominious<span style="color: Red;">*</span>halt Thursday in the wake of allegations of sexual harassment from former Fox host Gretchen<span style="color: Red;">*</span>Carlson and from other women.
On the business side, though, Ailes, 76, is arguably leaving at the top of his game. Ratings at Fox News, a subsidiary of 21st Century Fox,<span style="color: Red;">*</span>are higher than ever, fueled by its confident mix of coverage of the ascendance of Donald Trump<span style="color: Red;">*</span>and ceaseless bashing of President Obama. Profits are rolling in, to the tune of more than $1 billion a year.<span style="color: Red;">*</span>And Ailes’ singular<span style="color: Red;">*</span>business model of monetizing news – with a thin staff of reporters -- is as admired by competitors as it is reviled by critics.
But his departure accelerates the day of reckoning that Fox News and its corporate parent<span style="color: Red;">*</span>have been pondering for years. To a great extent, Fox News is Roger Ailes – the CEO, the Chairman, Dear Leader, the Editor, the chief talking-point issuer, and if you are to believe Carlson, the lead towel snapper in<span style="color: Red;">*</span>a metaphorically malodorous locker room. His departure will leave a profoundly glaring vacancy to fill for 21st Century Fox board chairman Rupert Murdoch, and his two sons who are also top executives at the company.
Still, changes at a news organization that generates more than $1 billion in annual profit don’t take place overnight. Unless some of the top TV talent<span style="color: Red;">*</span>walks out in a huff – as speculated by the Ailes-friendly<span style="color: Red;">*</span>Drudge Report earlier this week -- Fox News will likely remain largely unchanged from its current format in the short run, analysts say.<span style="color: Red;">*</span>In a statement,<span style="color: Red;">*</span>Murdoch said Thursday<span style="color: Red;">*</span>he will assume, effective immediately, the<span style="color: Red;">*</span>role of chairman and acting CEO of Fox News Channel and Fox Business Network.
“I’d be surprised if we saw a dramatic change in what they’re doing,” says Scott Collins, TV editor at media news site The Wrap and author of Crazy Like a Fox: The Inside Story of How Fox News Beat CNN. “Even if (Fox broadcaster) Bill O’Reilly walked out, the impulse will be reshuffle to patch holes as best as they could.”
But questions about its long-term viability will linger long after Ailes fades from the headlines. Ailes’ discerning eye for talent won’t be available as replacements are recruited for aging stars. And his messaging guidance will be sorely missed as its editorial stance is recalibrated for the coverage of a new president, be it Trump or Hillary Clinton. Fox News’ new leader will also have to contend with a broader set of fundamental challenges that have also stumped competitors – declining TV viewership and competition from online news sources for ad dollars.
“It was facing challenges regardless of Ailes,” says Bruce Bartlett, a former White House aide who’s written extensively about Fox News. “Its style has gotten old. The audience has gotten old. They’re still generating a lot of profit, but not a lot of growth.”
Some internal candidates’ names have quickly surfaced as a possible replacements -- Bill Shine, senior executive vice president of programming; Jay Wallace, executive vice president of news and editorial; and John Moody, executive vice president and executive editor. Shine, Wallace and Fox News CFO Mark Kranz were mentioned in a statement released by Murdoch Thursday.
Shine, who joined the network soon after it was founded by Ailes in 1996, would be “an obvious choice,” Collins says. “He’s been there for a while, He<span style="color: Red;">*</span>knows the troops.”
But the new leader may just be a short-term answer. “It’s such a chaotic situation, and the goal maybe just to keep it going,” Collins says.
The next chapter could largely be dictated by the younger generation of Murdochs. The relationship between Ailes and <span style="color: Red;">*</span>Murdoch’s sons -- Lachlan Murdoch, co-executive chairman of 21st Century Fox, and James Murdoch, the company’s CEO --<span style="color: Red;">*</span>is said to be strained. And they could see the vacancy as a way to address the network's internal culture, Bartlett says. “There’s a bit of the locker room attitude around Fox. That all has to change,” he says, referring to the internal interactions that have trickled<span style="color: Red;">*</span>out in the wake of<span style="color: Red;">*</span>Carlson’s lawsuit and on-air visual cues, such as the “leg cam” that prominently shows its female anchors’ legs. <span style="color: Red;">*</span>“I think they’d be remiss to not look at this opportunity to bring in new blood.”
But don’t expect wholesale changes in its editorial presentation, company watchers say. “That formula by Ailes has worked really well,” Collins says. “That kind of right wing talk radio works.”
There’s simply no sustainable revenue model in a straight-news cable news format, says Dan Cassino, a political science professor at Fairleigh Dickinson University in New Jersey, who’s studied and published papers on Fox News.
Suddenly shifting to general news “makes ratings more volatile,” he says. “They get consistent ratings. It’s something CNN desperately wishes it had.”
Cassino expects Ailes’ departure in the short-term to create “less cohesion” of messages between various anchors. “They’re all trying to work out on their own strategy. You’re going to have a variety of messages and to some degree that’s going to hurt the influence they have.”
Soon after Ailes’ exit negotiations were reported earlier this week, the<span style="color: Red;">*</span>Drudge Report published a story claiming that several top Fox talents, including O’Reilly and Sean Hannity, were rallying to walk out in support of Ailes. If true, “they’ve got a problem,” Collins says. “If you took away just O’Reilly, they will have a serious hole.”
That the personalities mentioned in the speculation, O’Reilly and Hannity, are primetime figures presents a challenge.<span style="color: Red;">*</span>“There’s not anything news or objective about (the primetime lineup),” Collins says. “If they change that, they’d alter the character of the offerings. And they’d be selling differently to advertisers.”
The handling of Megyn Kelly, a rising star, will also be a tricky variable. Kelly kept silent while other female anchors came out in support of Ailes following charges from<span style="color: Red;">*</span>Carlson and then from other women who said<span style="color: Red;">*</span>he had<span style="color: Red;">*</span>sexually harassed them prior to Fox’s launching. Their claims were reported by Gabriel Sherman, a New York magazine writer who has published a critical biography of Ailes.
Sherman this week reported that Kelly has told investigators hired by Fox that she was also harassed by Ailes. Her claim “was the straw that broke the camel’s back” for Ailes, Bartlett says.
Kelly’s contract expires next year, and her departure would be a big blow as Fox<span style="color: Red;">*</span>recovers from Ailes’ exit. Kelly has ambitions for more prominent platforms, including possibly broadcast networks, Collins says. “She wants to be in Barbara Walters, Diane Sawyers mode,” he says. “I think she wants to be seen as more of a celebrity-getter and the interviewer of heads of state.”
The arrival of a new president could pose an intriguing opportunity or cause for deeper anxiety at the network, company watchers say. If Clinton is elected, it could energize the network in trumpeting<span style="color: Red;">*</span>opposition to<span style="color: Red;">*</span>her administration, similar to the way the network overhauled its messaging in 2009 after Obama took office. But what do you do about the fracture within the Republican Party that has been laid bare by Trump’s run for president? “Without Ailes there, it’ll be more difficult for them to thread the needle properly,” Cassino says.
“If Trump wins, it’s almost more difficult. They have to fundamentally change the network. You’re now the messenger of the president. What do you do there?"




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