Fox Should Think Twice Before Axing Bill O’Reilly

April 17, 2017, 5:23 PM UTC

For the past two weeks, media sources have reported about the cascading accusations of sexual harassment directed at Fox News star Bill O’Reilly. The near-daily revelations of misdeeds and malfeasance were reminiscent of those ravens pecking Rod Taylor’s skull in Hitchcock’s The Birds. So O’Reilly decided to take temporary leave of his throne overlooking the Fox network, and went on vacation. Of course, we were assured, it was long ago planned that way. But the desertion by more than half of his sponsors appeared clearly not to be “just one of those things.” The question lingering in the wake of his departure: Is it temporary or permanent?

O’Reilly is somewhat analogous to the “bad-boy” brands that sometimes flourish, and then, dissipate. Bad-boy brands, by design, infuriate, insult, and delight. Almost always, the intent behind their ever-extruding presence is to stimulate sensation—and increased sales.

Some bad-boy campaigns of recent and not-so-recent vintage: There’s American Apparel with its salacious ads and even more scandalous ex-CEO. There’s Abercrombie & Fitch (ANF), about 10 years ago, with its portfolio of ads, products, and pronouncements, and its cousin Hollister a little later, both standing out for their race-bating appeals. And there’s the Calvin Klein ad campaign from the mid ‘90s, noted for its (apparently) underage models posed in more-than-suggestive positions, which attracted a full range of outrage. Then-New York City mayor Rudy Giuliani demanded the ads be removed from city buses, and the tempest ensured enhanced revenue.

At first, these bad-boy brands attract a following and feed off of the energy of controversy. But when the tectonic plate shifts, and they are no longer the “new thing,” sales slow and consumer hostility (or sheer boredom) take their toll. Then, they fade away.

Fox? It’s clearly the bad-boy network, and O’Reilly is the leader of the band. Former Fox News CEO Roger Ailes was the equivalent of the man behind the curtain—the network’s Wizard of Oz. In the aftermath of the devastating details about his inappropriate behavior, firing him required a strategic analysis of whether and how the network’s model could be sustained in the absence of its creator. The downside of demanding his resignation almost certainly did not hinge on a threat to the brand—there were likely to be rather few viewers who knew or cared about Ailes since he was not a visual commodity. So, sponsor/advertiser concerns clearly came first, and employee morale, maybe somewhat second.

With O’Reilly, the Murdoch clan faces competing interests matched by competing risks: O’Reilly has a defined and definite viewing demographic, and it’s likely they’re as loyal to him as Donald Trump’s well-wishers were when his bad-boy behavior became public knowledge. O’Reilly’s audience doesn’t score by voting for him, but they do watch, and they do buy product (all those killing books wind up on bookshelves somewhere). The risk of decapitating the king is clear: Viewers may abandon the Fox echo chamber and follow the headless monarch to his new realm, presumably in another cable kingdom.

But there’s the other side of the economic equation: advertisers, the heart-like pump pushing the monetary blood that runs through the network as a kind of life support. At this point, they have voted by walking away from O’Reilly’s program en masse. Can Fox risk collapse if and when even more advertisers avoid contamination of their products by a network that sanctions the degrading treatment of women?


So viewers sort of constitute a network’s water: Without water, we perish in five days. Without viewers, the network faces an existential threat of survival. But without adequate sponsor support, the heart slows its pumping, the flow of monetary fluid declines, and there’s once again, a life-support problem.

For Fox, then, it’s a question of how much pain it’s willing to take on this issue. Did Rush Limbaugh disappear when many of his sponsors walked away? No. Did Trump lose the female vote as a result of the raunchy tape recording that was released? No. Will O’Reilly return to the studio, tanned, ready and rested? Your move, News Corp. (NWSA).

Irv Schenkler is a professor at New York University’s Stern School of Business.

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