Roger Ailes’s Demotion Signals Power Shift Within Murdoch Empire

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Roger Ailes in 2012.Photo: Charles Eshelman/2012 Charles Eshelman

For much of the past 15 years, Roger Ailes has operated with virtual impunity inside Rupert Murdoch’s media empire. Nothing, it seemed, could induce Murdoch to rebuke Ailes publicly, even if Ailes forced Murdoch to choose between him and his sons. Such was Ailes’s power that he has been able to run a right-wing political operation under the auspices of a news channel.

This week, for the first time, there are signs that this remarkable era may be entering its twilight. Yesterday, 21st Century Fox announced that Ailes would be reporting to Lachlan and James Murdoch. For Ailes, it was a stinging smack-down and effectively a demotion.

Just five days earlier, Ailes released what now appears to be a rogue statement to his own Fox Business channel declaring that he would be unaffected by the announcement that Lachlan and James will take control of Fox as part of Rupert’s succession plan. “Roger Ailes will continue to run the news network, reporting directly to Rupert Murdoch,” Fox Business reported. According to a well-placed source, Ailes directed Fox Business executive Bill Shine to tell anchor Stuart Varney to read the statement on air. “Ailes told Shine to write the announcement of the move for Varney to say,” the source said. “In it, Ailes inserted language that he would report to Rupert.”

This was, apparently, news to Rupert. And now the Murdochs are correcting the record. “Roger will report to Lachlan and James,” a 21st Century Fox spokesperson told The Hollywood Reporter.

What makes the reversal most remarkable is that, until now, Rupert always backed Ailes during his messy feuds with Murdoch’s children. Ailes’s tangles with Lachlan were legion. Not long after 9/11, Rupert gave Ailes a new contract after Ailes threatened to resign following a heated argument with Lachlan in the Fox newsroom. Four years later, Lachlan quit his job as deputy COO in charge of the Fox broadcast group after Rupert supported Ailes in a dispute over a TV show that Ailes wanted and Lachlan didn’t. In 2014, Rupert did nothing publicly after I reported in my Ailes biography that Ailes once bragged to a Fox News executive about moving into Lachlan’s vacant office, thereby putting himself closer to Rupert than Lachlan. “Do you know whose chair I’m sitting in? I’m sitting in Lachlan Murdoch’s chair,” Ailes boasted to his colleague. “Do you know who’s sitting on the other side of that wall? Rupert Murdoch.”

Ailes and James have maintained a distant, if frosty, relationship. James is an environmentalist who led News Corp’s campaign to be a carbon-neutral company. His wife once worked for the Clinton Foundation. Ailes, a fierce climate-change denier, openly badmouthed James to friends and colleagues. He’s called him a “fucking dope” and “Fredo,” according to sources.

No one I spoke to in the hours after the news broke could remember a time when Ailes has been so publicly diminished. “History was made,” a longtime Ailes associate told me. “It is terrible for Roger,” said another. “It is a public contradiction. Roger takes these things personally. Worse, it shows that Rupert did not give him a heads-up of the management change in advance. That alone was a slight to his ego.”

Ailes’s contract is up in the winter of 2016. According to the many Murdoch-world sources I’ve spoken with in recent weeks, Ailes has been expecting to renew his deal. “Rupert is going to need me to elect the next president,” Ailes is said to have told an associate. But Ailes may have grossly overplayed his hand. According to sources, the fact that Fox’s ratings held steady during Ailes’s leave of absence last year over a health scare has given the Murdochs confidence that Fox could endure in the post-Ailes era. It’s an era that now seems to be closer.