murdoch scandal

In the Murdoch Hacking Scandal, Roger Ailes Stands to Gain

As the metastasizing phone-hacking scandal engulfs the senior-most reaches of News Corp., the Murdoch family, and the British government, a winner may yet emerge from the corporate wreckage: Roger Ailes.

Ailes’s Fox News fiefdom has avoided any connection to the hacking uproar. Depending on how the ultimate chapter unfolds for Rupert Murdoch, Ailes, more than anyone inside News Corp., stands to gain significantly.

James Murdoch’s entanglement in the hacking crisis means he could very well lose his grip on succession, taking a significant threat to Ailes’s dominion over Fox News off the table. Ailes’s relationship with the Murdoch children and their designs on succession — not to mention their distaste for his brand of hardnosed conservative politics — has long been a subject of intense speculation. Ailes famously clashed with James’s older brother Lachlan over management issues and was responsible in part for Lachlan’s decision to walk away from the company. By all accounts, James and Ailes have a distant, if cordial, relationship. At a recent budget meeting with senior News Corp. executives, James praised Ailes for Fox’s monster profits, according to a person briefed on the meeting. But James’s recent elevation to deputy COO makes avoiding conflict with Ailes much more difficult. The inevitability of a Roger-James clash was something that both men had to be aware of.

Now Ailes may not have to worry about James after all. If James winds up mortally compromised by the hacking scandal — he is in charge of News International, the News Corp. division at the heart of the hacking spree, and personally approved out-of-court settlements to hacking victims that now could be seen as hush money — Ailes will have one less potential future boss to worry about.

Beyond the palace intrigue over succession, the scandal also makes Ailes all the more central to News Corp.’s business. Today’s news that News Corp. will abandon efforts to acquire all of BSkyB makes Fox’s nearly $1 billion in annual profits indispensable to the company’s bottom line. Without a future BSkyB deal to juice profits, Rupert needs Ailes now more than ever.

And Ailes has achieved an even larger victory: revenge. In 2010, Matthew Freud, the PR executive who is married to Rupert’s daughter Elisabeth, gave this quote to the Times:

Whatever Jon Stewart and fellow liberals may think of Fox News, the network’s journalistic transgressions are entirely legal, which is something that no one can say about the News of the World. Up till now, Freud and James and Rebekah Brooks represented the innermost sanctum of the Murdoch orbit, a group that mingled with David Cameron and prided itself on positioning the company as a reputable member of the Establishment. It was Fox that Freud attempted to cast as the journalistic pariah.

Now, Ailes is surely taking delight in the fact that if you swap out Roger Ailes for News of the World in the Freud quote, it would be the most accurate statement about the hacking saga to come out of News Corp. yet.


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In the Murdoch Hacking Scandal, Roger Ailes Stands to Gain