Business Leaders Meet In Sun Valley, Idaho For Allen And Co. Annual Conference
Media mogul Rupert Murdoch, left and his sons James, right and Lachlan, center, arrive for the Allen & Co. annual conference at the Sun Valley Resort on July 10, 2013 in Sun Valley, Idaho.  Photograph by Kevork Djansezian — Getty Images

Here’s What to Expect With the Changing of the Guard at Fox News

Apr 24, 2017

The ignominious departure of former Fox News star Bill O'Reilly—like the earlier exit of his former boss, Fox chairman Roger Ailes—has focused a lot of attention on the Murdoch media empire. Fox News is one of the family's key properties, and as a result, there has been a frenzy of tea-leaf reading about what it all means.

One of the biggest questions for Murdoch-watchers is who came out on top in the latest battle of wills and what it says about the future. Rupert, the 86-year-old patriarch of the clan, was initially said to be unwilling to get rid of O'Reilly, despite a growing advertiser boycott fueled by news of multiple sexual harassment claims against the Fox host.

Sources told New York magazine that the elder Murdoch was resisting in part because "it would make it appear he was forced into a decision by the New York Times," which uncovered payments to the claimants.

Rupert's son James, however, who is CEO of family holding company 21st Century Fox, argued that it was long past time for O'Reilly to leave, in order to try and mitigate some of the longer-term damage done by the allegations and the advertising exodus.

Lachlan Murdoch appears to have initially sided with his father—who, like Lachlan, is co-chairman of the company—as he did when it was Roger Ailes whose head was on the chopping block. But eventually, they both agreed that it was probably time to get rid of O'Reilly.

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According to Murdoch-watcher Michael Wolff, this victory in a battle of wills, combined with a similar victory in the Ailes case, is evidence that James has taken firm control of the company. While Rupert continues to give advice and has strong feelings about future direction, James is the one with his hands on the wheel, Wolff argues.

"If the expulsion of Ailes, and, even more dramatically, O’Reilly, mean anything, it means most of all that James is in charge."

One question that flows from this is what kinds of changes the young Murdochs might want to make at Fox News. Wolff and others have reported that James is not a fan of the network or its politics—Wolff says he sees most of those who work at Fox as "Neanderthals." Will he meddle in its affairs now that two of the company's biggest names are gone?

The early signs are that James and Lachlan aren't interested in making major changes, or at least that they are biding their time before making them. Tucker Carlson, who has replaced O'Reilly in the coveted 8 pm network slot, is seen by most to be a vote for the status quo rather than an attempt to do much to shake up the existing lineup.

Many Fox-watchers are skeptical that there will be any large changes at the network at all for the simple reason that it makes a staggering amount of money for the Murdoch family. According to recent estimates, Fox generates more than $1.5 billion in revenue every year, or about 25% of the total at 21st Century Fox, and that buys a lot of freedom.

In fact, some critics of the network have argued that this financial windfall is one of the primary reasons why the kind of conduct that eventually sidelined Ailes and O'Reilly went on for so long. The understanding, according to New York writer Gabriel Sherman, was that Fox News executives had more or less carte blanche to run the company however they wanted to.

At the same time, however, the fallout from the toxic culture at Fox is unlikely to be limited to just the existing cases against Ailes and O'Reilly. Sherman says there are at least two more lawsuits coming that contain new allegations, and a group of black former employees are also said to be planning to join a lawsuit based on what they allege was discriminatory behavior.

James and Lachlan may be interested in changing the workplace culture at Fox so that it doesn't get rocked by similar scandals. But will they want to make any changes to the political viewpoints or targeting of the network that makes them so much money? That seems less likely.

From a straightforward market standpoint, there's no question that Fox News is catering to a rapidly-aging viewership. The average age of an O'Reilly viewer was over 70, which means that even within an already aging demographic—cable-TV viewers—the network skews old.

At the same time, however, older viewers are a highly desirable advertising group, and the network has the added appeal of being a must-watch for one particular conservative-leaning older man, namely the president of the United States, Donald Trump. A recent Washington Post story on his TV-watching habits said that both his staff and those who want to impress him routinely arrange to be interviewed on Fox because they know he will see it.

Wolff, for one, argues that James Murdoch has bigger fish to fry than meddling with a property like Fox News that is generating huge amounts of revenue. For one thing, he and his father both want to merge the British broadcaster Sky—which they trying to acquire the rest of for $14 billion—with 21st Century Fox, to create a truly global media brand.

Some Murdoch-watchers believe that the proposed acquisition of control of Sky, which requires approval from the British broadcast regulator, was one of the motivating factors behind the removal of both Ailes and O'Reilly.

According to this theory, the family didn't want even the slightest hint of impropriety to affect the Sky bid—especially when there is enough attention already on the Murdochs' history with News of the World and the hacking of private telephone accounts, an affair that caused them to drop an earlier bid for the company in 2011.

There's little question that the younger Murdoxhs will ultimately want to put their own stamp on 21st Century Fox, and this could eventually extend to re-engineering Fox News and other assets. But for the moment at least, their attention appears to be mostly fixed elsewhere.

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