Wall Street valued Chernin’s polished mien, especially after Murdoch’s brush with prostate cancer in 2000, but the management ranks at News Corp did not readily bow to his commands. Chernin promoted loyalists into key positions. The most visible casualty of Chernin’s drive to consolidate power was the heir apparent. Lachlan Murdoch was thirty-two when Chernin took over, and held the title of deputy chief operating officer. Rupert had hoped that Lachlan would train under the experienced entertainment executive. Lachlan even bought a house in Los Angeles and took an office on the Fox studio lot. But Lachlan felt frozen out in California. Chernin did not see himself as a regent to chaperone the king’s successor and left him out of management decisions. The mounting tension between Chernin and Lachlan created a polarizing dynamic. Ailes started out a bit player in this boardroom drama but ended up delivering a performance that many would remember long afterward.
Lachlan decided to give up on California to focus on his portfolio of businesses in New York. As deputy COO, he was responsible for the New York Post, HarperCollins, and the Fox Television Stations Group. But he could not fully escape Chernin’s reach. Their relationship finally ruptured over internal arguments over retransmission rights to cable operators. Lachlan wanted cable systems to pay News Corp cash; Chernin wanted to negotiate channel slots to launch the Fox Reality channel. The debate came to a head during a tense conference call with senior executives. Rupert sided with Chernin. Feeling betrayed and lost, Lachlan began spending more time at the Post, a Murdoch pet that Chernin had no interest in caring for.
But in seeking to avoid Chernin, Lachlan confronted another formidable power: Ailes. Ailes wanted Lachlan to take his programming ideas for the Fox broadcast stations. He pitched Lachlan on giving Geraldo Rivera a syndicated broadcast show. He also pressed Lachlan to develop a procedural drama called Crime Line. Lachlan resisted. He told Ailes he would look at some pilots but did not make any promises. The truth was, he did not need Geraldo. In early 2005, he recruited Australian tabloid television pioneer Peter Brennan to relaunch A Current Affair. And Crime Line, Lachlan told his staff, would likely cost millions. Rejecting the show was the “100 percent right decision,” he told News Corp executives.
So Ailes undercut Lachlan. He opened a back channel to Lachlan’s deputy, Jack Abernethy, the CEO of the Stations Group and an Ailes loyalist going back to their CNBC days. Before being promoted by Lachlan in 2004, he worked alongside Ailes as Fox News’s CFO. Ailes also went over Lachlan’s head. Having been blocked by Lachlan on Crime Line, Ailes pitched the show directly to Rupert over the summer of 2005. “Do the show,” Rupert told him. “Don’t listen to Lachlan.”
In late July, while in Sydney on a business trip, Lachlan received the news that Ailes had outmaneuvered him. The flap over Crime Line was, on the surface, a minor issue. But as Lachlan flew home to New York, Ailes’s meddling came to symbolize much more. Lachlan’s resentments festered. The pressure of satisfying his father’s dynastic ambitions had taken its toll. He had sided with his mother, Anna, during her divorce from Rupert. And Lachlan resented that Rupert pushed to relocate the company from Australia to New York, a city he never felt at home in. He loved the laid-back Australian culture and rugged countryside. His Australian wife, Sarah, a swimsuit model, also yearned to return home, where they were celebrities, almost royalty. Rupert could not understand these feelings. “Rupert used to say to me, ‘What kind of stupid person would give this up to go live there?’ ” former News Corp executive Mitch Stern recalled.
On Tuesday, July 26, 2005, Lachlan flew to Los Angeles to see his father for lunch. “I have to do my own thing,” Lachlan told his dad. “I have to be my own man.” Three days later, News Corp announced Lachlan’s resignation.
Lachlan’s departure created a power vacuum within News Corp—and Ailes wasted no time in filling it. It was an illustration of Ailes’s gifts for bureaucratic infighting that he was able to transform his adversarial relationship with Lachlan into a strategic alliance. Lachlan, too, saw that he could position Ailes to damage Chernin, who was his true adversary. When it came time for Rupert to divvy up Lachlan’s businesses, Lachlan lobbied Rupert to give Ailes control of the broadcast stations. In December, Rupert gave Ailes a new contract that added the unit to his Fox News portfolio. Rupert also named Ailes to the Office of the Chairman, an elite group of a half dozen executives who ran the company, and gave him Lachlan’s vacant office on the eighth floor.
In the company, and in the wider culture, Ailes was at a peak. Fox News had conquered its cable rivals, revolutionized news, and helped secure Bush’s reelection. It was profitable years ahead of schedule. Rupert was after Ailes to launch a cable business channel to take on CNBC, and Fox News Talk, its radio arm, struck lucrative deals to air on Sirius satellite radio. Moreover, Ailes had positioned himself as a hedge against Chernin’s dominance. Chernin eyed Ailes warily. “There was a thinking from Peter, what is Roger going to do now?” an executive recalled. There was reason for concern: Ailes was throwing his weight around in Chernin’s West Coast cable realm. In the winter of 2003, the News Corp cable channel FX released a docudrama about the Pentagon Papers. Ailes was not pleased. He called Peter Liguori, the president of FX.
“You making a movie about the Pentagon Papers?” Ailes said.
“Yeah,” Liguori said.
“Why would you do that? It’s bad for America,” Ailes said, echoing the complaint Joe Coors had leveled when TVN covered Daniel Ellsberg. The FX film was already scheduled to air, so there was nothing Liguori could do. As a half measure, he told his team to cut the marketing budget in half.
Around this time, a Fox executive went to visit Ailes in his new office on the eighth floor, “the biggest I’ve ever seen,” the executive thought, “like something out of 2001: A Space Odyssey.” The executive was startled to walk in and find Ailes with his back turned, scrolling through his email. It made the executive uncomfortable. “Roger talks about being in places people don’t expect to keep them off guard,” a Fox producer later said.
Ailes swiveled around. “Do you know whose chair I’m sitting in? I’m sitting in Lachlan Murdoch’s chair.” There was a cold pause. “Do you know who’s sitting on the other side of that wall? Rupert Murdoch.”
“What are you going to do with all this power now?” the executive ventured.
Ailes looked him in the eye. “We’ll see where it goes,” he said.
NINETEEN
SEARCHING FOR A NEW CAST
ON THE EVENING OF APRIL 26, 2006, the luminaries of George Bush’s Washington—all but the president himself—gathered at Cafe Milano, the trendy Italian restaurant in Georgetown, to celebrate the tenth anniversary of Fox News Sunday. The party served a more important purpose—it was an opportunity to genuflect before the man who had altered the power equation in American politics. Roger Ailes’s name was at the top of the invitations. No one, it seemed, turned him down. Shortly after 7:00, waiters circulated through the crowd passing out cocktails and cigars as attendees craned their necks to catch glimpses of Cheney, Rove, and the newest addition to the Bush administration’s team, Fox host Tony Snow. Just that morning, Bush had introduced Snow as his new press secretary. “Congratulations on your promotion—or maybe it’s a demotion,” Rupert Murdoch said in front of the guests. Ailes explained that the appointment merely affirmed Fox’s influence. “Ten years ago we could have never gotten the White House press secretary to come to this party,” he said. For attuned observers, the party was a barometer of presidential ambition. John McCain and Hillary Clinton, with eyes on 2008, made sure to pay proper homage to Ailes.
The party represented a new high point. But the network’s success was built on ground that appeared to be dangerously unstable. As the Bush administration’s fortunes turned, so, too, would those of Fox. More than 2,300 troops had been killed in Iraq with no end in sight. Osama bin Laden remained at large, despite Bush’s vow to “smoke ’im out.” Hurricane Katrina, the previous August, provided a visceral
shorthand for the administration’s shortcomings, and its failure to represent all Americans. The facts overwhelmed Ailes’s abilities to find a story line that engaged his audience. In the 8:00 a.m. editorial meeting, the talk was getting desperate. “Look at these people,” Fox executive Ken LaCorte said as pictures of bedraggled survivors standing on rooftops, many of them African American, flashed on screens on the wall. “What, do they think the government is supposed to come bail them out?” Executives shifted in their seats uncomfortably. “Everyone tries to out-Roger Roger,” a senior producer recalled.
Fox lost about 15 percent of its total viewership in the year after Katrina. For the first time since 9/11, the polarities that powered Fox’s ascendance had begun to shift. Sensing that the left’s rage was to become almost as potent a media force as the right’s had been, MSNBC tried a new tactic. In September 2005, Keith Olbermann, a former star of ESPN’s SportsCenter who had transformed himself into a voluble MSNBC personality, emerged as an unlikely liberal icon. In one emotionally charged segment, he lashed the Bush administration’s mismanaged response to Katrina. The commentary went viral. On August 30, 2006, Olbermann debuted a segment of his Countdown show called “Special Comment.” The first target was Donald Rumsfeld. “The man who sees absolutes where all other men see nuances and shades of meaning is either a prophet or a quack,” Olbermann began. “Donald H. Rumsfeld is not a prophet.” That year, Countdown’s ratings jumped 67 percent. Even Ailes’s boss, detecting the shifting landscape, contemplated a move to the middle. That summer, Murdoch hosted a fundraiser for Hillary Clinton at News Corp headquarters.
Ailes told executives this moment might come. Even as Fox had rolled over its rivals, Ailes tried to maintain an underdog mentality. He kept costs low. Fox’s green rooms were notoriously grimy. Shows were programmed with a bare-bones staff. One senior executive even changed out the toner cartridges in the copy machine himself. Ailes told a reporter that acting like an underdog was “inspiration to people to try to get out there and do well.” He said he wanted to guard against “complacency on the part of people who get to be successful, get to be stars, get too much money and get comfortable and start to think they are winning.” It was easier in those early years to “fight from behind,” he said.
The battles Ailes had waged to increase his power within News Corp had lingering repercussions. As Ailes approached the channel’s ten-year mark in October 2006, Brian Lewis learned that Julia Angwin, an enterprising investigative reporter for The Wall Street Journal, was preparing a lengthy front-page article about Ailes. From what Lewis gleaned, the story could be damaging. Angwin had discovered that Ailes’s takeover of the television stations that Lachlan Murdoch had run was plagued by mismanagement and mediocre ratings.
Fox’s PR department had history with Angwin. The previous May, when Angwin was working on another story about Fox’s advertising sales department, Lewis’s deputy, Irena Briganti, screamed at Angwin, who was pregnant with her first child, that she was “acting hormonal.” Angwin angrily told Lewis she would no longer deal with Briganti.
In mid-September, a few days before Angwin’s front-page story went to press, Ailes agreed to an interview. He denied undercutting Lachlan. “If that’s what happened, I don’t know it,” he told Angwin. “I don’t think that’s what happened because Lachlan and I get along great.” He also brushed off questions about his sharp elbows. “There are lots of things that can be said about me—but not playing for the full team is not one of them,” he declared. “If the only way to win is to damage someone else … you’re no damn good.” Angwin’s article, headlined “After Riding High with Fox News, Murdoch Aide Has Harder Slog,” appeared on Tuesday, October 3.
Later that day, Ailes and Murdoch gave a joint interview to the Financial Times. Murdoch called Angwin’s article “a hit job,” “cheap,” and “completely wrong.” Ailes was defiant. “I have no knowledge what they are talking about. The Wall Street Journal just flat out got it wrong,” he told the interviewer. “They obviously went in with an agenda and Rupert and I were trying to figure out if he was the target or I was the target.”
Ailes’s campaign against Angwin was not over. At one point, Steve Doocy mocked Angwin during a segment on Fox & Friends while showing a distorted, grainy photo of her snapped from News Corp’s front-desk security camera. Ailes approached Angwin at an event at the Waldorf Astoria. “You’ve had your chance,” he blustered as he walked by her in the crowd. “Now I have the rest of my life to get back at you.”
Even as Murdoch publicly defended Ailes, his attentions had moved beyond Fox to a trophy he had long coveted: The Wall Street Journal. Though Ailes was useful in this regard—Fox’s profits would help finance Murdoch’s $5 billion offer for the Journal—Murdoch realized that Ailes’s role at News Corp, in the interest of corporate harmony, should not extend far beyond his news channel. Peter Chernin expressed concern to colleagues that Ailes might be given control of News Corp’s cable assets, including the entertainment channel FX, which were run out of Chernin’s domain in Los Angeles. Murdoch told a senior executive that Chernin had nothing to worry about. “ ‘We don’t want to give cable to Roger,’ ” he said. “Rupert knew the schtick,” a person close to Murdoch said. “He knew Roger was great fun, but it was great fun in small dosages.” Executives began to see Ailes as akin to on-air talent—as a performer, whose stage was the Fox News offices. Like many of his anchors, Ailes could be temperamental and needy. Colleagues often remarked that the most entertaining show at Fox News was Ailes’s daily editorial meeting, where he would monologue about his political enemies and cable news competitors. “He needs to know he’s being appreciated,” a former News Corp executive explained.
It did not help Ailes’s corporate position that the Republicans’ travails worsened through the 2006 midterms. On the morning of Election Day, the Democrats were poised to reclaim the House of Representatives and the Senate, an outcome Bush would call a “thumpin’.” That afternoon, Ailes assembled his news team for a pre-coverage briefing in a second-floor conference room. No matter what the final score was, he told them to put on a winning face. “I was watching CNN in 2004 and saw some really unhappy people on camera,” he said. “We don’t want that to be on Fox tonight.”
The next day, Nielsen reported that Fox News had beaten CNN by just 100,000 viewers.
For almost a decade, Ailes had played a role in driving the news; now he was captive to it, with few apparent options to reverse the ratings trend, and at Fox there were incipient signs of panic. “We had the concern that the slide could turn into a freefall,” a producer said. Ailes’s plans to turn the ship around were running aground. He made an aggressive bid to convince his old friend Rush Limbaugh to come to Fox. Limbaugh turned him down flat. “Rush was kind of laughing at the whole thing,” a Limbaugh friend who spoke with him during the talks recalled. “He said, ‘Roger is really trying to get me to come back.’ And Rush was like, ‘Why would I do this?’ ” Ailes acknowledged the problems. “We’re in a challenging news cycle because of Hurricane Katrina,” he explained to a reporter around this time. “You are sort of forced in the cable business to play even if you don’t want to.” Ailes sought to play a game he could win. The War on Christmas was a classic Fox ratings ploy. “Roger said, ‘Let me think, 90 percent of the people like Christmas, so CBS, CNN, and MSNBC, you can take the other 10 percent, we’ll say, “Merry Christmas,” and we’ll make all the money,’ ” Ailes’s brother, Robert, recalled. “Roger learned from an early age what you can quote unquote sell on television. He’s looking for an audience. The bigger the audience, the more money the company makes, the more successful he will be.”
Meanwhile, Ailes’s relationship with his news chief, John Moody, was fraying. It was a tension that had existed from Fox’s early days. Moody told executives that his role was “to be the antagonist” and “the conscience of news.” “Roger is not a news guy,” a producer said. “He will respect you for a period of time. After a while,
you’ll get on his nerves and he will kill you.” A Fox contributor recalled that Moody “would try and impose some standards and Roger would override him.” Ailes increasingly relied more on programming executives such as Bill Shine and Kevin Magee.
Although Moody shared Ailes’s conservatism, friends and colleagues sensed Moody’s growing discomfort with Ailes’s rage and lack of journalistic rigor. “He was aghast from day one at shit that was going on there,” a person close to Moody recalled. Adam Sank, who left Fox in 2002, said, “I look at John as a tortured soul.”
For a while, Moody tried to downplay Ailes’s crude view of journalism. “He insults me to my face but I don’t want you to think it’s a sign of disrespect,” he told a colleague. But, in early 2006, Moody vented about his boss to a friend over lunch. As it happened, his friend knew Bob Wright and decided to give him a call.
“You should hire John Moody to run MSNBC. In one stroke you steal Roger’s number two and he can run the network.”
“That’s a great idea,” Wright said.
GE sent a helicopter to fly Moody to the corporation’s headquarters in Fairfield, Connecticut. The courtship, however, was brief. Ailes offered Moody a raise to stay. The MSNBC job went to Phil Griffin instead. Moody’s frustrations were left to simmer, and he would continue to keep an eye on the exit.
Moody was not the only veteran journalist looking to decamp. Kim Hume, the Washington bureau chief, had had enough. At the beginning of the year, she came under fire for Fox’s coverage of the mining accident in Sago, West Virginia, that left a dozen men dead. Kim had been skiing in the Rockies at the time, and after CNN was first with the news, Fox and several other outlets reported a false rumor that the miners had been saved, prompting a barrage of criticism. After returning to work, Kim took her frustrations out on staff members. “You will never embarrass me again,” she told them. In September, Kim resigned.
The Loudest Voice in the Room: How the Brilliant, Bombastic Roger Ailes Built Fox News--and Divided a Country Page 40
