Fox News CEO Roger Ailes Signs New Multiyear Contract
The 75-year-old head of the cable news channel has expressed no desire to ever leave Fox News.
Fox News CEO Roger Ailes has signed a new three-year contract to stay with the cable network, it was announced Thursday. Ailes will continue to serve as chairman and CEO of Fox News and Fox Business Network and chairman of Fox Television Stations. He will "jointly report" to James and Lachlan Murdoch as well as 84-year-old Rupert Murdoch.
The contract renewal comes after a whirlwind few weeks that began June 11, when CNBC broke the news that Rupert Murdoch would hand control of his media empire to his sons, with James becoming CEO of 21st Century Fox and older brother Lachlan becoming executive co-chairman, while Rupert would remain as executive co-chairman.
While the succession, which is effective July 1, 2015, had been anticipated, the timing of the news caught many at the company off guard, including Ailes. And minutes after the news broke, Ailes' Fox Business Network reported that Ailes would continue to report to Rupert, not James and Lachlan.
The news flash, reported by anchor Stuart Varney, seemed to be refuted by the company in a June 16 announcement when the succession became official. "Roger will report to Lachlan and James but will continue his unique and long-standing relationship with Rupert," 21st Century Fox spokesperson Nathaniel Brown said in a statement to The Hollywood Reporter.
Ailes built Fox News into a media and cultural juggernaut valued at $15 billion that is estimated to have funneled $2.3 billion into 21st Century Fox coffers this year, according to SNL Kagan. He has always maintained an iron-fisted control of his domain, making all programming decisions and even negotiating. He has expressed no desire to ever retire and has resisted anointing a No. 2.
"Roger Ailes is an element within the Fox News brand itself given his iconic profile," observed Wunderlich Securities analyst Matthew Harrigan. "He seems to have some of the mass appeal programming instincts of the elder Murdoch. Reporting to all three Murdochs affords him the right props given how instrumental he was in the creation of Fox News."
Ailes has maintained a close 19-year relationship with Rupert Murdoch, who hired him in 1996 to create a cable news alternative to what Murdoch viewed as the media's leftward tilt.
"He's really been good to his word," Ailes told THR in an April cover story. "He lets me run it, he doesn't bother me much, if he has an idea he calls me, or if he's troubled about something. Generally we've been very successful. He likes my leadership style, I think."
But his relationship with James and Lachlan has been nonexistent and at times strained.
"I don't know them very well," he said. "I don't interact with them on a daily or even weekly basis."
Of course, that is likely to change. Sources say Ailes met last week with James Murdoch. And his new deal was likely in the works before news broke of the succession.
"Given the recent organizational and reporting changes, it probably made sense for the company to hedge its bets by prioritizing" Ailes' new contract, said S&P Capital IQ analyst Tuna Amobi, adding that keeping Ailes in the fold "should help assuage, if not completely dissipate, a lingering concern, for some investors, on the potential fallout [from] organizational changes."
In a statement accompanying Thursday's news, Ailes said, "I am grateful to Rupert Murdoch for taking the risk on Fox News to see it become the number one 24-hour news network in America. I look forward to working with Rupert, Lachlan and James to do my part to help bring 21st Century Fox well into the future."
Rupert added: "Nearly two decades ago, Roger took a bold idea rooted in the belief that there was room for more choice in cable news, and — much to all the naysayers' surprise — through his development of vibrant programming and talent, created a behemoth of a business with one of the most passionate and engaged audiences in the history of television news. Roger and I have always had, and will continue to have, a special relationship. Lachlan, James and I are delighted that Roger will be leading key businesses for us and our shareholders for years to come, and he has our unwavering support."
The younger Murdochs, Lachlan and James, said in the following joint statement: "Roger is an incredibly talented executive and we're pleased he has accepted our offer to continue his extraordinary record of success at 21st Century Fox. We look forward to witnessing his energy and entrepreneurial drive in leading the next wave of growth for Fox News, Fox Business Network and Fox Television Stations, as well as many years of continued success together."