Hit Its Ceiling?

Has Fox News Hit Its Ceiling?

Some unsolicited advice for the Murdoch brothers.

By Jack Shafer

Now that the monster Roger Ailes has been slain and the palace that he built, Fox News Channel, has been revealed to be a catacomb of sexual harassment chambers built to satisfy the old goat, a power shift is taking place ahead of schedule at the company. The shift was inevitable as the 76-year-old executive was going to retire or expire in the coming years, and the 85-year-old primary owner of the channel, Rupert Murdoch, is likewise reaching the end of his actuarial limit. Soon, control of the insanely profitable ($1.5 billion a year) channel will fall to Murdoch's empowered heirs, sons James and Lachlan, and with it will come the opportunity to rethink how to position the conservative TV audience’s guiding spirit. Will they seize the opportunity?

There is no arguing with success, and nobody can fault Ailes for what he and Murdoch built at Fox News Channel. With great difficulty, the duo squeezed into the cable news market in 1996, where two CNN domestic news channels existed, and a third channel, the Microsoft-NBC joint venture MSNBC, had just launched. Cable systems were lukewarm on adding Fox, many citing a paucity of available slots on the dial. Murdoch overcame their objections with green persuasion, stunning the industry by paying cable operators an estimated $300 million to make room for his channel. It was a business play by Murdoch, but also his conservative rebuke to CNN, which he thought to be an organ of liberalism. Where cable operators wouldn't be persuaded with cash—as in New York City—Murdoch sued his way on the dial. Murdoch’s daring move was typical of his career: He rarely sits pat. He’s always looking for the bigger, more radical play, an instinct the brothers could draw on.

Fox News doubters, of which there were many, gave Ailes, a longtime Republican strategist and broadcast executive, little chance of success. But by 1996, cable channel capacity had expanded sufficiently for a conservative broadcaster to finally break through the mainstream news cartel of CBS, NBC, ABC, CNN and PBS. Like all winning capitalists, Murdoch and Ailes had sensed an underserved market, in this case news for conservatives, and sought to fill it with a mix of right-wing news and opinion. Boy, were they right. Today, cable systems have no choice but to pay Fox News for the channel, fretting that their customers will drop their cable if the channel isn’t available in their bundle.

But for all the success Fox News Channel has reaped, it may have hit its ceiling. As Murdoch biographer Michael Wolff pointed out two years ago, Ailes didn’t build his broadcast giant by dividing the country and feeding the conservative audience the meat it craved. He “chipped off his own profitable piece” of the TV news market by turning politics into “a special interest category.” Fox News’ biggest innovation perhaps was to abandon the traditional lip service that U.S. news organizations pay to being impartial and embracing an overtly partisan stance in many if not most of its broadcasts the way British publications have for decades. As it turns out, though, the number of conservative meat eaters is quite small—an average of 1.35 million viewers tune in to Fox News Channel, and its best-rated show, The O’Reilly Factor, attracts only 3.4 million, and most come from the oldest demographic. (These are election-year inflated numbers, by the way.) In the old days, writes Wolff, the traditional network news programs reached 40 million viewers. In a multi-channel world, those numbers are no longer reachable, but they do illustrate how niche and confining the audience that Fox News Channel has nurtured for two decades is.

As a business proposition—and a journalistic one, too—logic would instruct the Murdoch brothers to issue an order broadening the palette from which Fox paints the news in hopes of drawing an even larger audience. This isn’t to suggest that Fox News Channel give liberals like Phil Donohue or Keith Olbermann a slot, but to tilt the network harder in the direction of conscientious journalists like Megyn Kelly and Chris Wallace, and away from its honey badgers—notably Bill O’Reilly, Sean Hannity and the Fox & Friends crew. Both Kelly and Wallace are deserving of larger audiences than they get, and maybe one of the reasons their numbers aren’t larger is because new viewers are put off by the channel’s reputation for honey-badger journalism.

As all tabloid editors know, it’s easier to manufacture outrage (the “war” on Christmas, anchor babies, Benghazi overload and other choice hunks of silly umbrage) than it is to report on more consequential outrages. But there is no substitute for hiring journalistic mavericks and turning them loose on issues, individuals and institutions to find more real stories. What a delight it would be to see authentic, deep-dish investigations by a conservative outfit.

The Murdoch heirs could develop a couple more anchors like Kelly, a conservative who practices the broadcaster’s art with rigor and honesty. Alternatively, they could cast a wider net. Just because Fox News Channel is a conservative network doesn’t mean all of its anchors need to be conservatives. The network could also ape Roone Arledge and raid the other networks for their nonpartisan stars—CBS’ John Dickerson, CNN’s Jake Tapper and ABC’s Martha Raddatz, for example—which couldn’t help but improve Fox’s standing.

The money needed to convert Fox News Channel from a heavily partisan opinion network to one that produces more reported news is obviously there. But is the will? The Murdoch brothers could find historical precedent for such an editorial reordering. William Randolph Hearst’s media empire gave up partisanship for the journalistic mainstream after he died. “The Hearst Corp. is a diversified media conglomerate almost 130 years old that makes few waves these days. No one thinks of it as a latter-day repository of ‘yellow journalism,’” says media scholar W. Joseph Campbell. Otis Chandler likewise steered the Los Angeles Times away from the founding right-wing principles of his father and grandfather to create a journalistic and financial powerhouse of a newspaper.

Other media heirs have accomplished less dramatic retrofits. Katherine Graham and Donald Graham eschewed the direct involvement in politics of former Post publisher Philip Graham (he helped put Lyndon Johnson on the ballot at the 1960 Democratic National Convention). Joe Allbritton, owner of the Washington Star in the 1970s, wrote speeches for Democratic candidates in Texas and had his Star endorse Gerald Ford for president, which was his natural right as a publisher, of course. His son, POLITICO owner Robert Allbritton, makes no political donations and his website runs no editorials or endorsements. Rupert Murdoch has assumed a place in the vanguard with all the politicking he has done with his media properties, brazenly using them to screw his business and political enemies. It’s hard to believe the brothers will continue to wage his sort of journalistic warfare.

Heirs tend to make something new and grander of the legacy operations they take control of, and they pay little energy to flattering the memories of their precursors. (The joys of pleasing your father are really overrated.) But transforming the Fox News Channel from the conservative shill operation it is would not be completely alien to the journalistic culture Rupert Murdoch has created at News Corp. and 21st Century Fox. Although we rightly associate Murdoch with tabloid news values—the New York Post, the Sun, the shuttered News of the World—producers of straight news can be found in his properties. There’s the United Kingdom’s Sky News, which he co-owns and has tried to buy outright, the Times of London and the Sunday Times. In 2007, I predicted that Murdoch would make a political plaything of the Wall Street Journal and defile it with his tabloid sensibility once in control. But I was wrong. The Journal is a different paper for his ownership, but not a diminished one.

“[The Journal] is the only top 50 paper in the country to see an increase in circulation in the past decade, so it’s obviously doing something right,” says Chris Roush, who teaches business journalism at the University of North Carolina-Chapel Hill. Roush points to the Journal’s coverage of Theranos, Medicare fraud, cyber-privacy and the Malaysia scandal as recent high points. “It covers much more political and general news than it did a decade ago,” he says.

As the Murdoch brothers ease into control in the post-Rupert era, unencumbered by the prejudices and perceived slights that have made their father a mad man, they could honestly say they’re honoring his memory by making Fox News Channel more like Sky, the Journal, and the Timeses and less like the Post. Murdoch knows how to do journalism right. Arranging for a graft from those outlets for what top Fox critic Gabriel Sherman calls an “anti-journalism organization” is not a ridiculous proposition.

The remaking of a TV news network is not without precedent, either. In 1967, ABC News was such a wreck that comedian Milton Berle used his variety program (on ABC, natch) to joke about the Johnson administration’s foreign policy: “They’re going to put the Vietnam War on ABC, and it’ll be canceled in 13 weeks.” But that all changed in 1977, when the network gave the keys to Roone Arledge, the leader of its sports coverage, and in several short years, he goosed the network with TV pizazz and genuine news content. “By the late 1980’s [ABC News] was the dominant news department in television,” says Arledge’s New York Times obit. The star system of correspondents and anchors, flashy graphics, snazzy set, and other audience-pleasing wrinkles would be extended by Ailes at Fox News Channel two decades later.

CBS similarly used news—Edward R. Murrow and WWII, specifically—to catch the dominant NBC, notes University of Maine professor of journalism Michael Socolow.

“This is an opportunity for Fox—one its never really had before. Just as CBS News gambled on 60 Minutes in the late 1960s—which turned out to be one of the most lucrative television shows in broadcast history—Fox might try innovative programming to distinguish itself more clearly in the cable news universe,” Socolow adds.

What would be the brothers’ motivation to rejig Fox News? My sense is that a bigger, gettable audience exists and additional ad revenue could be collected. The network has a huge financial cushion in the $1.4 billion in subscription fees they collect, which protect them from dips in ratings and advertising, should they decide to rebrand: In other words, Fox News need not fret too much if its audience shrinks a little bit, it won’t necessarily hurt revenue. There could be a real upside to broadening the appeal to the channel beyond the aging, white viewers it now attracts. Like media heirs before them, the Murdoch brothers probably are more interested in business success than they are in extending their father’s personal politics and influence peddling, so they might be receptive to remaking the channel.

“I don’t think there’s much doubt that Rupert is a spent force and that James and Lachlan have the keys to the executive suite,” says Australian newspaperman Neil Chenoweth, author of Rupert Murdoch: The Untold Story of the World’s Media Wizard. “I think his physical frailty and marrying Jerry Hall have basically taken him out of the equation at Fox. James and Lachlan are calling the shots and the issue for Fox execs is not just how they transfer their allegiances to the sons, but which son they support, because James and Lachlan are highly competitive,” he says. “James and Lachlan faced enormous pressure to prove themselves, to stamp their authority with a big new deal. They have done it instead by the power move to oust Ailes. It’s a defining moment for them, but it’s just as risky as a new acquisition. This stuff can go wrong.”

The brothers will want to be out in front of all this before Rupert dies because his passing will set off a grand power struggle for his News Corp. and 21st Century Fox that will make the current legal tussle over Sumner Redstone’s Viacom look easy-peasy. If the Murdoch family members stick together, the companies are almost takeover proof, as Chenoweth has written. The boys will be under pressure to remain united, to perform financially and to keep the other Murdoch heirs, daughters Elizabeth and Prudence, placated.

Is asking for editorial excellence from the Murdochs asking too much? Is it foolish to expect Fox News Channel to use its billions to create the greatest TV news organization in the world? Sustained great journalism never happens by accident. It depends on owners like the Chandlers, the Grahams, the Ochs-Sulzbergers, CBS’ Bill Palley, Time-Life’s Henry Luce and the Barcroft family that owned the Journal for decades, who are willing to hire the best editors and staff and spend money on quality editorial. Rupert has never been afraid to invest huge sums in his enterprises; the brothers shouldn’t be shy about infusing Fox News with big money and hiring the best.

Or will they miss their chance?

“I do think the Fox formula, as incredibly successful as it’s been, will change in the next few years,” says Ailes biographer Kerwin Swint, a professor of political science at Kennesaw State University. “And that’s because it has to. The media landscape changes, and media habits and culture moves on. It seems to me as if Fox has already become less overtly partisan in its coverage, if not its commentary. Megyn Kelly deserves a lot of the credit for that.”

Swint points to the network’s aging audience, which at 68 is the highest among the cable news networks, and is also 98 percent white. “With Ailes gone, they have lost their spiritual father. They will need a new identity. I think James Murdoch has quite a different vision for Fox than Ailes had. But he will move slowly, his father will insist on maintaining the ‘brand.’ And if Trump loses in November, which is quite likely, Fox management will have some decisions to make about their direction, similar in some ways to the Republican Party: ‘What does the future look like?’”

James and Lachlan: If you can make money by doing it right, what excuse do you have for doing it wrong?