The post-election tweaks at Fox were just that—minor programming adjustments. Ailes was staying the course, taking little responsibility for the loss. He blamed his party for Romney’s defeat. “The GOP couldn’t organize a one-car funeral,” he told executives. At a speech to journalism students the previous spring, Ailes said, “Sarah Palin had no chance, right?” He went on, “Did anybody think she had a chance to be president? Anybody in here? Okay. Oops. Newt Gingrich couldn’t get anybody he worked with in Congress to support him, remember? A little bit of a problem. Rick Santorum, anybody ever hear of him until about six weeks ago? He lost his own state by 17 points.”
When Ailes re-signed a contract through 2016, Fox seemed as if it were frozen in time. He brought back John Moody as executive editor and executive vice president. Hannity, O’Reilly, Van Susteren, and Megyn Kelly all signed new multiyear deals. Even Sarah Palin was rehired in June 2013. In October 2013, Ailes shuffled his prime-time schedule for the first time in years. It was a modest update: Megyn Kelly took over the 9:00 p.m. hour, Hannity shifted to 10:00 p.m., and Van Susteren took over Shepard Smith’s 7:00 p.m. newscast. O’Reilly, the bedrock of the lineup, remained at 8:00 p.m.
At the senior reaches of News Corp, Ailes’s static vision for Fox was concerning. Obama’s reelection coincided with the time News Corp was reorganizing its business. In June 2013, the company split into 21st Century Fox (its film and TV assets) and News Corp (its scandalized newspaper division). Fox News had been a rocketship but now some board members wondered if Ailes’s fuel was spent. Although the company’s cable assets remained phenomenally profitable—for the quarter ending June 2013, cable revenue was up 16 percent over a year earlier, to $3 billion—the Fox News channel was not viewed as a growth asset. The ratings in the wake of Obama’s reelection were down markedly. All of cable news took a hit, but Fox’s drop-off among twenty-five- to fifty-four-year-olds—the key advertising demographic—was steeper than its rivals’. In February 2013, Hannity’s audience was down by 35 percent from the same period in 2012, while O’Reilly’s audience had decreased by 26 percent. Ad revenue was also down in the first quarter, because it was no longer an election year.
After a News Corp board meeting in Manhattan in April 2013, some directors privately questioned whether Ailes had a programming strategy to reverse the slide. They also voiced concern over the issue of succession. Ailes’s grip on power was so firm that some Fox executives described fearing Lord of the Flies–type chaos. Ailes at times seemed unaware of the worrying trend lines at his network. When one sales executive pointed out in a meeting that Fox’s audience demographics skewed older than those of its cable news rivals, Ailes did not believe him. “Our demos suck,” the executive said. “No they don’t!” Ailes barked. When Ailes was shown the numbers, he seemed genuinely surprised. “Why didn’t I know about this?” he asked. The truth was, over the years, executives, fearing Ailes’s wrath, had shielded him from bad news. One executive recalled how Bill Shine would conveniently engage Ailes in partisan banter whenever his prime-time ratings dipped. “Did you see what Olbermann said last night?” Shine would venture. The question would cause Ailes to launch into a five-minute monologue about the former MSNBC host, and Fox’s ratings were left unmentioned.
The Fox Business Network was also a ratings disappointment to some News Corp executives. Ailes had never wanted the channel in the first place. When Murdoch tapped Ailes to launch it in 2007, Ailes told the five executives hired to run the channel, “the world doesn’t need another business network.” Because the boss had signaled his lack of enthusiasm, executives took concerted steps to undermine the spinoff’s success. “Welcome aboard. You’re set up for failure,” Ailes’s loyalist Ken LaCorte told Ray Hennessey, the new director of business news, not long after he was hired. Neil Cavuto, who was named managing editor of the channel, followed Ailes’s lead. “Cavuto wasn’t involved,” an executive said.
Kevin Magee, a trusted Fox News executive in charge of the day-to-day operations of the business channel, struggled to craft an identity for it. Ailes told Magee and his team that he did not want politics on-air—“we do that on the news channel,” he said—but in the next breath he’d say that politics was what affected business. In the summer of 2010, Magee and his team sought to carve out a niche by giving airtime to libertarians like Judge Andrew Napolitano, the host of the prime-time show Freedom Watch. But this clashed with Ailes’s efforts to steer Fox away from the Tea Party. One night, the judge ranted against U.S. drone strikes against American citizens who were labeled terrorists. “Roger the next day was really furious,” an executive recalled. “He said, ‘If the Russians shot missiles at us, the Judge would want us to consult Congress to get their permission to respond.’ And then Ailes said he wanted the show off the air. A few weeks later, it was gone. The whole show. He kept the Judge, who is popular, but not the show.” Libertarians flooded Facebook and other websites with complaints. Ailes ignored them. “If all the people who emailed Fox on the Judge’s behalf had a Nielsen box, I would have kept him on the air,” Ailes said.
More than politics, the business channel had a fundamental programming flaw: the entertainment values of Fox News produced comical results when applied to business journalism. Shortly before the business channel launched, a young female Fox Business anchor went to meet with the staff of the New York Post’s business desk to brainstorm story ideas.
“What do you know about business?” asked Roddy Boyd, a brash financial reporter who was then on staff at the Post. She told them her experience was in weather, but “I’m reading a lot. I know the Dow is up. I’m reading the blogs.”
“Why’d they hire you?” Boyd asked. She smiled and shook her breasts.
Ailes sought to infuse Fox Business with well-known talent. In September 2009, he hired disgraced radio host Don Imus—whose show had been dropped by MSNBC two years earlier, after he said on air that the Rutgers women’s basketball team were “nappy-headed hos”—to anchor a morning show. Around this time, he also considered poaching CNBC star Maria Bartiromo. “Roger passed on her,” one executive involved in the talks said. “He wished she hadn’t gained so much weight. He said she went from looking like Sophia Loren to Mamma Leone. He felt he was being used to get more money from CNBC. He told us her agent should give him part of the commission, because the talks were worth another million dollars.” (In November 2013, Bartiromo jumped from CNBC to Fox Business.)
The business network’s failure to catch on was all the more glaring given that Murdoch had acquired The Wall Street Journal in 2007. But Ailes spoke of the Journal as a threat. The paper had no synergy with Fox. Executives noticed that Ailes resented Murdoch’s lavish support of the Journal’s parent company, Dow Jones, and his friendship with Robert Thomson, the former editor of The Times of London whom Murdoch tapped to be publisher of the Journal. As Les Hinton, then president of Dow Jones, accompanied Ailes on a tour of the Journal’s gleaming new newsroom a few floors above Fox News, Ailes said, “So, you’re showing me what I paid for.”