Fox News Rocked by Resignation of Roger Ailes

What the powerhouse cable channel needs to do now that Roger Ailes is out

Like so many companies navigating the ever-shifting and changing digital landscape, Fox News is about to enter a whole new era as Roger Ailes, the man who built the cable network into a powerhouse of profit, is stepping down.

The founder and chief executive announced his resignation Thursday in the wake of sexual harassment allegations brought by Fox anchor Gretchen Carlson earlier this month.

Ailes, once described as a cross between Don Rickles and Don Corleone, has been a dominant force for the network.

Ailes, 76, will remain at parent company 21st Century Fox as an adviser, according to Ailes’ resignation letter posted by The Drudge Report. The move signals there will be some sense of continuity, especially during this crucial election period. Rupert Murdoch, 85, executive chairman of 21st Century Fox, said he would be taking over as acting CEO of Fox News Channel and Fox Business Network.

Murdoch praised Ailes’ accomplishments in defying the odds to create and lead a “flourishing news channel,” adding that Ailes’ “ability to make profoundly important issues accessible to a broader audience stand in stark contrast to the self-serving elitism that characterizes far too much of the media.”

It’s a critical period for Fox News as it needs to try to appeal to the younger Snapchat-using, social media-obsessed audience. In some ways, the Carlson accusations have made it easier for James Murdoch, 43, who was given the role of CEO at Fox by dad Rupert Murdoch last year, to show Ailes the door in search of fresh air, fresh vision, and fresh views. Ailes has long had a contentious relationship with James Murdoch and his brother Lachlan. Father Rupert has sided with Ailes — who was making boatloads of money for him.

Once described as a cross between Don Rickles and Don Corleone, Ailes has been a dominating force for the network, turning it into an agenda-driven machine that has pushed policy and elected Republicans to office.

He began his career in media by working for “The Mike Douglas Show” before moving into politics and television, working to remake Richard Nixon’s TV image in 1968, with Ronald Reagan in 1984, and George H.W. Bush in 1988.

“He was the premier guy in the business,” former Reagan campaign manager Ed Rollins told Rolling Stone. “He was our Michelangelo.”

Ailes became the head of CNBC, where, in his three years as boss, he more than quintupled profits and groomed stars including Chris Matthews and Maria Bartiromo. In 1996, Ailes launched Fox News, the 24-hour cable channel that would come to be the direct counterpart to CNN — and a major player in the media world.

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“Fox set a bar, and Fox had a voice, and Fox had an audience that proved to be disaffected with the media as it existed before,” Frank Sesno, director of the School of Media and Public Affairs at George Washington University, told ABC News. “He was focused, and politics is about winning, and he brought that ethos to Fox News.”

Ailes has certainly made the channel a winner in ratings.

For the week of July 11, Fox News Channel was the most-watched basic cable network, according to TV Newswer website. The channel was “up 56.5 percent in total prime-time viewers and up 56 percent in total day viewers compared to the same week in 2015.”

One of the networks biggest stars of the moment is Megyn Kelly, 45, whose “Kelly File” show — along with Bill O’Reilly, 66, and his “O’Reilly Factor” — have consistently driven ratings. (Donald Trump has helped, too.) There are those who see Kelly as a possible crucial figure in the future of Fox, as she has been pulling in younger audiences and has boosted her image to a broader national level.

Related: Trump Calls Truce With Kelly 

The irony may be that the very culture Ailes cultivated — women in high heels and short skirts at clear anchor desks (Kelly was under fire on Twitter for wearing a negligee-type dress for her Republican National Convention coverage Wednesday) — has now brought about his downfall.

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Carlson’s July 6 lawsuit filing claims that Ailes sabotaged her career because she refused his suggestions for sex and had complained about a pervasive atmosphere of sexual harassment at Fox. New York Magazine reported that more than a dozen women have contacted Carlson’s lawyer to talk about similar allegations of sexual harassment. Ailes has denied the charges.

Whether it’s the “bimbo” anchors or the conservative agenda, the formula has worked.

According to some estimates, Fox News produces more than $1.5 billion in profit for 21st Century Fox, four times what CNN makes and about 20 percent of the company’s overall profit.

Ailes’ departure is a blow to the channel, even though he is 76 and it would have happened sooner rather than later. The Financial Times reports that several of the network’s biggest stars — O’Reilly, Sean Hannity, and Greta Van Susteren — have clauses in their contracts that would allow them to leave if Ailes exits.

“He is Fox News,” Jane Hall, a former Fox commentator, told Rolling Stone several years ago. “It’s his vision. It’s a reflection of him.”

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He has groomed no obvious successor, according to the reports. So the question looms: What happens next? Who will usher in this new era?  There are some contenders being floated. Among them:

David Rhodes, who was a vicepresident at Fox News before being named president of CBS News in 2011 — making him the youngest U.S. network news president ever. He’s under contract there until 2019.

Jesse Angelo, chief executive of the New York Post, roomed with James Murdoch at Harvard. He is well-connected, but may not be ready to run a cable giant of Fox News’ magnitude.

Bill Shine, a 19-year Fox News veteran, has been in charge of Fox News programming for two years and knows the company well. He’s also described as a “nice guy” — so the job might not be right for him.

Jay Wallace, executive vice president of news for Fox News, is also an in-house candidate. He has been in charge of all political coverage, a key position.

Some financial analysts aren’t too worried about Ailes’ departure affecting Fox News’ coffers because affiliate fees that Fox News earns are locked in for years, according to The New York Times.

The bigger area of concern? Luring in young viewers. According to Nielsen, the median age of a Fox News viewer is 67, the oldest of the cable news channels. (MSNBC’s is 63, and CNN’s is 61.)

But as CNBC’s Jim Cramer said Wednesday, “This is a man who decided what America watched.” There are “no other Ailes.”

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