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The Man Who Changed TV News Is About to Change It Again

The most reviled CEO in America—at least by the establishment media—was Roger Ailes, who disrupted the TV news industry when he created Fox News, now a profitable and powerful voice that has elbowed its way into American media past established rivals. But is technology threatening to destabilize access as young people increasingly opt to watch online video rather than pay for traditional TV content?

In 1996, when Fox News was launched, it received a less than friendly reception from the journalistic establishment. CNN founder Ted Turner said he looked forward to “crushing Rupert Murdoch like a bug.” When that didn’t happen, the vituperation against Fox News and its founder Roger Ailes went nuclear. Turner famously compared Ailes to Hitler. Reprimanded by the Anti-Defamation League, who thought this was trivializing the Holocaust, Turner relented but continued comparing Murdoch and Ailes with “the late Führer” and Goebbels. Bill Keller, former executive editor of The New York Times called Fox New Channel’s (FNC’s) slogan, “Fair and Balanced,” a “slogan for suckers,” and blamed the network and Ailes specifically for creating a climate of polarization. Esquire magazine wrote that Ailes was a “highly paid operative of a foreign-born tycoon, a man who reengineered political and media culture and fomented a revolt that threatens the very stability of our country.” The 73-year-old former political strategist, who launched his career in television as a producer for “The Mike Douglas Show,” chuckles at the paranoia he tends to arouse among the elite.

Ailes’ derangement syndrome continues in media circles to this day, but it is just as often tempered with grudging respect. Today, Fox Television Stations Group is one of the nation’s largest owned-and-operated network broadcast groups, comprising 28 stations in 18 markets and covering nearly 37.28 percent of U.S. television homes. (In June 2013, News Corp split itself into two separately traded companies—with 21st Century Fox retaining the media and entertainment businesses.) At a recent investor conference, Rupert Murdoch stated that Fox News now has annual profits of $1 billion. (The company reported 2012 revenues (for 12 months ending June 2013) at $27.68 billion.) In addition, Fox Business News (FBN) was profitable in 2013, a year earlier in its existence than when FNC achieved the same goal. According to Nielsen data, FNC has been No. 1 in cable news prime time with adults 25-54 for 65 consecutive months from March 2008 to July 2013. FNC has been No. 1 in cable news total day and prime time for 139 consecutive months—from January 2002 to July 2013. Launched in 1997, FBN is still playing catch-up with CNBC, but it’s no longer a drain on Murdoch’s wallet.

When Murdoch called Ailes and asked if a new cable TV news network could be created with essentially nothing—there was no studio, no equipment, no staff and no infrastructure—the exchange, according to journalist Zev Chafets, who authored Roger Ailes, Off Camera, an insider’s look at the FNC founder (Chafets was given access but nothing more), went as follows:

“How much will it cost me?” Murdoch asked.

“Nine hundred million to $1 billion,” Ailes said. “And you could lose it all.”

“Can you do it?” Murdoch asked.

“Yes,” said Ailes.

“Then go ahead and do it.” Murdoch said.

Many observers, including some close to Murdoch, thought the venture was daft. One who didn’t was CEO Jack Welch of NBC’s parent company General Electric. “I told them they would rue the day they let Roger team up with Rupert,” Welch told Chafets. “You put a creative genius together with a guy with the guts and wallet of Rupert Murdoch and you have an unbeatable combination.”

About JP Donlon

JP Donlon
JP Donlon is the Editor-in-Chief of Chief Executive magazine.