The Loudest Voice in the Room: How Roger Ailes and Fox News Remade American Politics | Chapter 20 of 43

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ELEVEN

THE AUSSIE AND THE MIDWESTERNER

LESS THAN TWO WEEKS after leaving NBC, Roger Ailes stood at a press conference alongside Rupert Murdoch in front of a crush of reporters and cameras at Murdoch’s Midtown Manhattan headquarters and officially announced that News Corp would be the third entrant in the cable news sweepstakes. Ted Turner’s cable news pioneer was struggling, having failed to find long-term solutions to its strategic programming challenges in the years after the 1991 Gulf War. The ongoing O. J. Simpson murder trial remained a boon to ratings. But the tabloid saga was a source of concern for CNN purists, who were frustrated that major international headlines—the downing of American Black Hawk helicopters in Somalia, genocide in Rwanda, and ethnic strife in the Balkans—failed to entice viewers. In a break from Turner’s starless anchor philosophy, CNN president Tom Johnson tried several times in the mid-1990s to infuse the network with broadcast news glamour, extending feelers to Tom Brokaw, Dan Rather, and Peter Jennings. Each of them turned him down.

Murdoch certainly spotted a weakened prey. But the hunt was risky, involving huge capital outlays and intense competition to win slots with cable providers. News Corp had been exploring the possibility for the better part of a decade, with little success. But Murdoch, as always, was an optimist. “The appetite for news—particularly news that explains to people how it affects them—is expanding enormously,” he told reporters at the press conference introducing Ailes. “We are moving very fast for our news channel to become a worldwide platform.” The channel, Murdoch announced, would launch by the end of 1996 and be made available on cable and satellite, and its chairman and CEO would be Roger Ailes—a man of “entrepreneurial spirit.” “We would expect that our running costs of Fox News, from doing magazine shows for the network to a full, 24-hour news service, will come in at less than one hundred million a year,” Murdoch boasted.

When it was his turn to speak, Ailes expressed admiration for his new boss: “When everybody says you can’t do it, you get up the next day and find that Rupert Murdoch has done it.” Echoing Murdoch, he sketched a lofty vision for his news network even as he was self-consciously evasive about how he would pull it off. His first priority, he said, would be to “look at the resources, look at the dollars, look at the people, and try to figure out how to put it together in one dynamic news organization.” It would appeal to the “younger demographic” of Fox stations. “We’re not starting up a reactive news service in any way,” he stressed.

Murdoch acknowledged his immediate challenge was finding room for the channel on the country’s crowded cable dial. Nevertheless, he expressed confidence, hinting that if the cable systems didn’t make room for it, he would retaliate by depriving them of his sports programming. “I don’t think people will want to lose [NFL broadcasts],” he said in a not-so-veiled threat.

The channel was not only a business venture; though politics weren’t mentioned in the press conference, the seeds of what Fox would become were present. Ailes said that it “would like to restore objectivity where we find it lacking.” He hinted at the doublespeak that would so antagonize liberals in the years ahead. “I left politics a number of years ago,” he said. In words that would hark back to TVN’s hidden agenda, Ailes said: “We expect to do fine, balanced journalism.”

Murdoch’s grandiosity was of a kind he’d backed up many times before. By the time Roger Ailes arrived at News Corporation, Rupert Murdoch had become, on the eve of his sixty-fifth birthday, the most powerful media mogul of the century. From a single Australian afternoon tabloid of modest circulation, which he had inherited at age twenty-one, Murdoch built a publishing and entertainment company with revenues of $9 billion, controlling the distribution of newspapers, books, movies, and television programming consumed on six continents. He had owned at one time or another more than two dozen magazines and more than one hundred newspapers, from the Daily Mirror in Sydney to the News of the World, Sun, and the London Times in Britain, to the New York Post, Boston Herald, and Chicago Sun-Times in the United States. He owned and operated a dozen American television stations and held the exclusive rights to televise some of the most lucrative sports franchises in the world. HarperCollins, the publishing house, and Zondervan, a large publisher of religious books, belonged to him. Among his holdings in Hollywood, he counted the 20th Century Fox Film Corporation and the Fox Broadcasting Company. Investing early in satellite television, Murdoch had amassed a 40 percent stake in the British Sky Broadcasting Group, a 50 percent share of VOX in Germany, and full ownership of Star TV in Hong Kong, his outpost at the doorstep of China’s vast media frontier. What Murdoch had created at News Corp was not merely a company but a kingdom—a virtual state unto itself.

Where he reigned, Murdoch could seem more influential than the politicians who populated the pages of his papers, using his media as a weapon to promote allies and to punish enemies. In Britain, he had provided crucial backing to Margaret Thatcher; in Australia, he’d cashiered a prime minister, Gough Whitlam—whom he’d helped to elect only three years earlier. And in New York, he’d used the New York Post to help elect Mayor Ed Koch.

Outside New York, however, Murdoch was confronting the limits of his power in the United States. The three American newspapers of national influence—The New York Times, The Washington Post, and The Wall Street Journal—were, frustratingly, beyond his reach. The dynastic families who owned them had no interest in selling. Despite Murdoch’s ambitions, his American papers were never going to elect a president. “If you are an arch-conservative, fighting a world of left-wing journalists, particularly in this country,” said a News Corp executive at the time, “wouldn’t you want to have another influence, another say?”

In America, television made presidents. With its deeply ingrained car culture and suburban sprawl, America lacked the concentrated newspaper readership that existed in Britain. Television, as Joe Coors and other conservatives had discovered, was the medium that reached the masses. In the spring of 1985, Murdoch made a deal to purchase the largest existing collection of independent broadcast stations from Metromedia for about $1.4 billion. The investment gave Murdoch control of seven television stations in America’s biggest markets, which he planned to string together to form the country’s fourth broadcast network. But for the deal to be approved by regulators, he would have to give up his Australian citizenship and become an American. In fact, for Murdoch, the more painful consequence of the television transaction may have been the forced sale of his charmed New York Post, which he sold in 1988, due to regulations that prevented a single owner from controlling both a newspaper and television station in a given market. (When the regulations were lifted a few years later, he bought it back.)

Having muscled onto the American airwaves, Murdoch set about building the Fox Broadcasting Company into a juggernaut. Industry executives dismissed his early effort. NBC Entertainment president Brandon Tartikoff once sniffed that Murdoch ran “the coathanger network” because of the number of second-tier stations he owned. Within five years, however, the network was profitable, fueled by surprise entertainment hits like Married … with Children and The Simpsons. But they lacked news coverage, the crucial lever Murdoch pulled to gain political influence. A year before launching the Fox broadcast network, Murdoch lobbied Ted Turner to sell him CNN, but Turner rebuffed his overture. In 1992, Murdoch began hiring an army of men and women to build a television news division. They waged battles on many fronts. Some worked on a newsfeed service, not unlike TVN, for Fox’s local affiliates. Some developed programming proposals. One idea was a Sunday public affairs show in the style of Meet the Press. Another was a 60 Minutes–style prime-time newsmagazine. Others discussed the feasibility of a cable news channel to take on CNN. In 1994, Murdoch secured distribution by acquiring a 20 percent stake of New World Communications, the media company controlled by financier Ronald Perelman. The deal made News Corp the country’s biggest operator of local television stations. What Murdoch lacked by 1995 was a visionary collaborator, someone who could bring logic and order to his acquisitions. Ailes had spent the past three decades preparing for the role.

Though separated by class and culture, Ailes and Murdoch were men of the same mind. The self-appointed elites of journalism elicited their unbridled disgust. Watergate particularly stung, and Murdoch spoke of it in Ailesian terms, long before the two met. “The American press might get their pleasure in successfully crucifying Nixon,” Murdoch told a friend, “but the last laugh could be on them. See how they like it when the Commies take over the West.”

As Murdoch came of age, he, like Ailes, developed an antiauthoritarian streak. He cast off his father’s conservative politics, adopting the self-conscious pose of a leftist—a limousine liberal before the term was coined. When he shipped off to Oxford, “Red Rupert” proudly displayed a bust of Lenin on a mantel in his room. Though uninspired in the classroom, Murdoch was a student of power. When he was nineteen, he accompanied his father, Sir Keith, a lauded war correspondent and newspaper executive, to the White House to meet Harry Truman. On the same trip abroad, he met New York Times publisher Arthur Hays Sulzberger at Hillandale, his family’s estate in Connecticut. John F. Kennedy would later grant him a private audience. The printed word was Murdoch’s gateway to power. In a world that was increasingly controlled by television, Ailes was the ideal partner.

As adults, Ailes and Murdoch let their work consume them, a habit that would weigh on their families. Both would marry three times. They showed little interest in hobbies or sports. But when they did play, they competed fiercely. Ailes jumped out of airplanes, endured bruises during office games; Murdoch, though modest in skill, “played his heart out” against his executives on the tennis court at Cavan, his forty-thousand-acre estate in the Australian countryside. On the ski slopes, he was “clumsy” but “had an obsession with finding the most difficult route down a slope,” recalled Andrew Neil, the British journalist who edited Murdoch’s London Sunday Times from 1983 to 1994.

Their desire to win drove their aggressive and at times ruthless approach to business. Ailes ran campaigns that others could not stomach. Murdoch did not ask for permission to buy things and blithely broke sacred promises. Their risk taking, at times, brought on near-career-ending disasters. Murdoch’s brush with bankruptcy following a debt crisis in the early 1990s was as dire as the train wrecks in Ailes’s career. But both men always managed to walk away.

The strongest bond between them was politics—the Australian’s abiding passion. “Murdoch loved to be part of the political game. He couldn’t help himself,” John Menadue, a former general manager of Murdoch’s Sydney papers, wrote in his memoir, Things You Learn Along the Way. Murdoch’s ideology was reflexively more anti-establishment than Ailes’s politics when the two met. Murdoch, for one, loathed Ailes’s hero, George H. W. Bush. In 1988, Murdoch’s preferred Republican was the televangelist Pat Robertson. “You can say what you like,” Murdoch told Andrew Neil at the time, “he’s right on all the issues.” Four years later, Murdoch voted for billionaire third-party presidential candidate Ross Perot. On a deeper level, however, Murdoch and Ailes shared a more primitive ideology: winning. Which is why Murdoch could easily back a liberal like the Australian Gough Whitlam and a union buster like Margaret Thatcher; and Ailes could transform a country-club Republican like George Bush into a heartland populist.

As much as anything, the bond between Ailes and Murdoch was sealed by the benefits each brought the other. Murdoch provided Ailes with a chance to rise from the tumult of NBC. Ailes could help Murdoch recover from something of a mid-career malaise. After Murdoch bought the 20th Century Fox film studio in 1985, he purchased a Tuscan-style mansion in Beverly Hills, and his wife, Anna, quickly adapted to the Los Angeles lifestyle. But Murdoch was miserable living on the West Coast. Rupert despised everything about Hollywood, except the profits. When one of his newspaper editors called to tell him about a great story, Murdoch seemed despondent. “They wouldn’t recognize one in L.A. if it came round the corner and hit them,” he said. Ten years later, and four years removed from News Corp’s near bankruptcy, Murdoch was carrying himself like a man at the outset of his career. Teaming up with a fellow warrior like Ailes was thrilling, and provided an excuse to spend more time in New York, “the capital of the world,” he called it.

Together, Murdoch and Ailes were embarking on a holy mission to lay waste to smug journalistic standards. “We will be the insurgents in a business of very strong incumbents,” Murdoch said shortly after hiring Ailes. He spoke of “a growing disconnect between television news and its audience,” and “an increasing gap between the values of those that deliver the news and those that receive it.”

The grand plans of Ailes and Murdoch were not received in the spirit with which they were delivered. Never mind the politics—almost no one besides the two principals thought the channel made sense as a business. Critics savaged its programming (having not seen a minute of it). The most critical review, which noted “widespread doubts” about the channel’s “long-term survival,” appeared on the front page of The New York Times. Veteran television reporter Bill Carter cited anonymous “insiders” who scoffed at the unnamed twenty-four-hour news channel. A former Fox News executive told him, “there is no there there.” Carter’s own words were the harshest: “The idea, some suggested, was to give Mr. Ailes a toy to play with, though, given the current state of Fox News as described by some insiders, it may be less a toy than an imaginary friend.” It was a devastating assessment from an authoritative voice. In the television industry, Carter was more than a news reporter. He was an information broker, whose articles, like Nielsen ratings, could make or break careers.

After reading the Times article, Bob Wright, Ailes’s former boss, expressed relief. The next day he told NBC employees on an internal video-conference that he doubted Ailes’s new job would amount to much, pointing to Murdoch’s track record at Fox. “They have yet to air a program, as far as I know, in ten years,” Wright told his team. “They don’t have affiliates with news. They don’t have any structure at all, nationally or internationally, really.… So it’s a real reach.” And it was true. Murdoch’s talk was sometimes cheap. Where was his Sunday morning public affairs program? Where was the 11:00 p.m. newscast? Both had been announced, but had yet to come into being. A Current Affair, which debuted in 1986, was tabloid, and his attempts at creating a serious newsmagazine had failed.

In March 1995, Murdoch recruited CBS News executive Joe Peyronnin, who had overseen 48 Hours and 60 Minutes, to try building up Fox’s hard news capabilities. Murdoch told Peyronnin he wanted what he called “proper news.” Peyronnin hired a stable of broadcast news producers and correspondents and placed Emily Rooney, daughter of legendary CBS newsman Andy Rooney, in charge of covering national political campaigns for Fox affiliates. In the fall of 1995, Peyronnin hired Today show producer Marty Ryan to executive-produce a weekly public affairs show called Fox News Sunday. Murdoch was personally involved. His ideal host for a morning or prime-time news show was Brit Hume, the conservative ABC News White House correspondent. Murdoch and Hume talked, but Hume didn’t want to leave his comfortable perch at ABC until his contract came up for renewal. When Peyronnin suggested 60 Minutes correspondent Ed Bradley, Murdoch replied, “I hear he’s lazy.” NPR analyst Mara Liasson was rejected as well. (Liasson would join Fox News in 1997.) Eventually, Peyronnin hired a conservative, the affable former George H. W. Bush speechwriter Tony Snow, who was a regular fill-in for Rush Limbaugh’s radio show.

Peyronnin fared no better than earlier Fox television news executives. In particular, Peyronnin and his team battled Mitchell Stern, the Fox Television Stations president, who was in charge of the News Corp–owned broadcast stations, to get network evening news coverage on the air. “Mitch Stern was the enemy of our group,” Rooney recalled. “He was negative. He was a big bully.” Stern, whose performance was judged by the local stations’ profitability, was reluctant to make programming changes at a time when they were minting money. In the mid-1990s, Fox had developed a successful strategy of positioning itself as a broadcast network for younger viewers, which was especially appealing to advertisers. Executives worried that news programming would skew the audience older.

In the fall of 1995, Murdoch abandoned his piecemeal approach. Several executives were assigned to work in secret on a business plan for a twenty-four-hour network. In December, they presented Murdoch with a seventeen-page confidential memo. The highly detailed plan, which included line items for prime-time hosts ($500,000 a year) and studio decorations ($75 a week for flowers), contained three options. A basic newsfeed for Fox affiliates was projected to cost $60 million per year. A headline news service that was “wall-to-wall (similar to CNN/Headline News)” would require an annual investment of $147 million. And a full-service cable news network would cost an estimated $182 million total, a significantly higher figure than the one Murdoch would announce at the press conference in January. The Fox News Channel, according to their financial analysis, had to differentiate itself to win. They rightly stated that CNN’s founding maxim, “The news is the star,” and its workaday presentation of headlines had grown stale. CNN, on the one hand, was “breaking news driven, processed event coverage, big story dependent … reactive and slow and predictable.” On the other hand, “FNC” must be about “personality and programming, produced information, appointment TV, news plus human interaction,” that was both “convenient and interesting” with “attitude.” In other words, Fox News should be conceived as “news talk-radio with video.” According to their analysis, the cable news channel would require a long-term financial commitment. They anticipated losses that could reach $785 million within a decade. To reduce risk, they recommended exploring a possible joint venture with CBS News, which was seeking to compete against the cable news efforts of NBC and ABC. The memo acknowledged the obvious business challenges of such a partnership: “long-term day-to-day control of the venture, CBS ability and willingness to fund sustained early-year losses … availability of CBS talent to channel and at what price … and union issues.” After some discussions between News Corp and CBS executives, the partnership never happened, and Murdoch pressed ahead alone.

Having developed a plan, Murdoch looked for someone to put it into motion. “I’ve been trying to get a news channel started,” Murdoch told Ailes. “I’ve had a bunch of guys try.”

One of the thorniest challenges would be securing distribution. In those days, cable was analog and as such, had limited space. Digital signals were on the verge of making a world of five hundred niche channels and on-demand entertainment possible. But until then, the operators had tremendous leverage and tended to favor ABC, NBC and CBS. In the early 1990s, legislation mandated that cable operators had to compensate broadcast networks for “retransmitting” their programming. Some paid cash, others reserved space on their cable systems for the Big Three to create their own cable channels. In this way, NBC struck a deal with cable operators to make room for America’s Talking, and ABC negotiated space for ESPN2. With such competition, Ailes faced a nightmare scenario of musical chair negotiations in which his upstart network, with the weakest track record in news, could be left standing. In the 1970s, TVN was hobbled by broadcast stations’ unwillingness to sign up for the expensive newsfeed. At America’s Talking, limited distribution hamstrung Ailes’s ability to attract an audience (the talk channel was only available in about twenty million homes when it was shut down, while CNN was available in 67 million at the time). “Distribution is the name of the game,” Ailes said. Murdoch agreed. “If you look at successive larger battles he’s waged against the unions or the BBC,” a Murdoch family intimate said, “the battles tend to focus on controlling distribution.”

Rumors circulated inside News Corp that Peyronnin’s days were numbered. By hiring Ailes and installing him as Peyronnin’s boss, Murdoch had broken Peyronnin’s contract. But Peyronnin agreed to have lunch with Ailes to see if a working relationship could be forged. Ailes took Peyronnin out to the Manhattan Ocean Club a few blocks north of News Corp headquarters. Peyronnin told him about his struggles to get news on the air and warned him that rival News Corp executives like Mitch Stern were bent on blocking him. Peyronnin explained that Ailes would have to move quickly and be aggressive. Ailes tried to persuade him to stay on. “I need you,” Ailes told him. “I don’t know anything about news.”

But as the conversation progressed, Peyronnin became convinced that Ailes was not someone he could work for. “Why are you a liberal?” Ailes snapped at one point. At another moment, he attacked CBS, Peyronnin’s previous employer, as the “Communist Broadcasting System.” Ailes told Peyronnin that he was going to create “an alternative news channel.”

Peyronnin went home that night and told his wife he was going to resign. “This guy thinks I’m a liberal. He’s a godawful person and I get paid no matter what, so I’d like to leave,” he told her. Peyronnin asked his agent, Washington lawyer Bob Barnett, to negotiate an exit deal with News Corp. Ailes soon moved into Peyronnin’s corner office on the second floor, where he would remain.

The logistical and technical issues involved in building the channel were far more complex and difficult than those Ailes had had at America’s Talking. In his previous endeavor, he benefited from the talent pool and existing studio infrastructure of NBC. This time around, he was on his own. “We had no news gathering operation,” Ailes recalled in 2004. “We had no studios, no equipment, no employees, no stars, no talent and no confidence from anybody.” They also had no time. MSNBC was set to debut in July 1996, less than six months from the time he joined News Corp. ABC’s cable news channel was also moving forward. Ailes told Murdoch that they had to launch alongside their rivals or risk getting left behind. Though MSNBC would be first, News Corp would not be last—Ailes still had a chance to beat ABC.

But before launching an entire channel, Ailes needed to prove he could launch a single show. Given Murdoch’s checkered history in TV news, Ailes had to demonstrate he could succeed where his predecessors failed. He immediately put in motion Peyronnin’s plan to launch Fox News Sunday, the weekly public affairs show for Fox affiliate stations, which had stalled in development. It was not merely a matter of public relations—a move to prove the critics, especially Bill Carter, wrong—but one of business survival. The annual convention of the National Cable Television Association, NCTA ’96, was less than three months away. It was a place where channel executives pitched cable operators on new programming. NBC and ABC had gilded news brands and famous anchors to make their case. Ailes would need something to show for himself.

In starting with Fox News Sunday, Ailes chose the worlds he understood best: politics and daytime television. Sketching out the show, he experimented with formats and personalities that would fuse news and politics into an entertaining mix. He considered as potential hosts former Democratic New York governor Mario Cuomo, former Republican congressman Jack Kemp, and Weekly Standard founder William Kristol. In the end, Ailes settled on Peyronnin’s choice of Tony Snow, with whom Ailes had crossed paths in 1992, when Ailes and Peggy Noonan were brought into the White House to rewrite Snow’s first draft of the State of the Union address. On April 3, Ailes announced that Fox News Sunday would debut on Fox affiliate stations on the morning of April 28. Notably, it was the same day that the cable convention began. “We hope to attract the traditional Sunday morning news viewer,” Ailes said, “but at the same time, we want to appeal to a more diverse and younger audience who are not currently regular viewers.”

The announcement did not lead to a smooth corporate rollout. On April 4, Daily Variety reported that Fox affiliates were “caught off-guard” by the “sudden” announcement. “The last-minute nature of the show was not taken well by many affiliates,” one source told the trade magazine. Until the Telecommunications Act of 1996 went into effect in February of that year, media companies could not own more than a dozen stations. Daily Variety reported that the Fox-owned stations—twelve out of the network’s nearly two hundred affiliates—were going to carry the news show, and thus it would reach roughly a quarter of the country. In effect, getting Fox News Sunday on the air would be the first test of Ailes’s corporate power.

In the weeks leading up to the launch, Ailes was on a war footing, convinced his rivals were out to damage him and the show. He announced the debut, in part, to force the hand of Mitch Stern, the News Corp television executive who had blocked Peyronnin’s previous efforts at news programming. “Roger is acutely aware how the rest of the company views him. He calls News Corp a pirate ship, where everyone tries to stab everyone else,” a former senior Fox executive said.

As Stern remembered it, the conflict over Fox News Sunday had more to do with Ailes’s personal style than underlying business disagreements. “Roger isn’t the easiest guy to get along with. He sees enemies in a lot of places,” Stern reflected. “If he thought he had to win a big battle over Fox News Sunday, maybe that got him all nutty.”

Though Tony Snow leaned to the right—in addition to his time in the first Bush White House, he had been an editor at the conservative Washington Times—Fox News Sunday resembled on the morning of its debut a conventional network news broadcast. Live from the Decatur House, a neoclassical mansion steps from the White House, Snow tackled a mix of foreign affairs and domestic politics with senators and congressmen. Worried that other networks would pressure politicians not to appear on Fox News Sunday, Ailes did not advertise the guest list in advance. Only a quarter of Fox’s affiliates agreed to broadcast the program. Very few people watched, but John Carmody, The Washington Post’s influential television writer, tuned in. In a tough write-up, he graded the debut a “C-plus (well, maybe a B-minus).” He called the opening graphic “unexciting” and noted that correspondent Jed Duvall was caught on camera “scratching himself.”

Despite the uneven launch, Fox News Sunday fulfilled Murdoch’s stifled ambitions to break into the television news business and secured for Ailes a tangible victory at a crucial moment as he faced off against his chief adversary at NBC. Two weeks before the cable convention, NBC promoted David Zaslav to president of cable distribution, putting him in charge of the effort to sell MSNBC to cable operators. The feud between Ailes and Zaslav, which had started as an office rivalry, was metastasizing into a corporate clash between News Corp and NBC.

In Los Angeles, as 26,000 cable industry executives circulated through the sprawling convention hall, Ailes and Zaslav shadowed each other. The two men shuttled to meetings, making their pitches and talking to reporters. Zaslav was confident a majority of the cable operators that carried America’s Talking would take MSNBC. He bragged to The Seattle Times that he had had a productive meeting that morning with executives from Tele-Communications, Inc., the country’s largest cable operator with its fourteen million subscribers. “We’ve begun a dialogue,” Zaslav said. His comment was a shot across Ailes’s bow. Murdoch was already courting TCI’s conservative co-owner John Malone, the Denver, Colorado–based media investor. Malone held stakes not only in TCI, but in nearly a hundred companies—from Turner Broadcasting and Court TV to Black Entertainment Television and MacNeil/Lehrer Productions.

As the incumbent, NBC seemed to be taunting Ailes. “We are the only players doing this that are credible,” Tom Rogers told the press. Andy Lack announced that Today show anchors Bryant Gumbel and Katie Couric would be regular hosts on MSNBC. He also trotted out NBC News stars to woo cable operators. Tom Brokaw anchored the Nightly News from NBC’s Burbank studios so he could be on hand at the convention. “We’re here persuading the cable people that [MSNBC] is the place to be,” Brokaw told a reporter. At the MSNBC booth, computer monitors displayed prototypes of the MSNBC website. Microsoft brought technowizardry to the marketing push.

Unlike MSNBC, Ailes had very little to actually show the industry. He was secretive about Fox News’s plans and combative in his dealings with cable operators. “I went into their booth, they weren’t communicative about what kind of programming they were going to have,” recalled Richard Aurelio, the former president of Time Warner Cable’s New York City Group. With Fred Dressler, the executive vice president of programming at Time Warner Cable, Ailes was even more hostile. When Dressler asked Ailes about his plans for Fox News, he replied, “I’m not going to tell you. It’s a news channel, that’s all you need to know.”

The truth was Ailes was not in Los Angeles to sell programming. By all appearances, he was there to make it clear that Fox News would not play the role of supplicant in the negotiations. “There’s a ritual dance with cable operators,” Ailes recalled. “They don’t want you, they don’t want your service, they don’t want your phone call.” He would later recall that getting onto the cable dial required a kind of forced entry, like “breaking into Fort Knox.” To pry open the door, cash was a powerful crowbar. Inside the Los Angeles Convention Center, word circulated that News Corp would pay cable companies millions to carry Fox News. In the conventional arrangement, cable operators were the ones who paid channel owners. In 1996, for instance, cable operators paid CNN roughly 25 cents per subscriber. Murdoch flipped the equation: he was prepared to pay cable operators a stunning $10 per subscriber. For a large cable system, agreeing to carry Fox News would be worth upward of $100 million. Chase Carey, a Harvard MBA who was chairman of Fox Television, had devised the risky plan to reverse cable television economics. “We had to put something on the table to grab the attention of the cable operators,” Carey said. As one former Ailes colleague put it, “we had Rupert’s checkbook and balls.”

It worked. Murdoch’s preemptive strike spooked the industry. Less than a month after the convention, ABC’s parent company, the Walt Disney Company, pulled the plug on the ABC cable news channel. “It became more and more apparent as we looked at the numbers that there was no light at the end of the tunnel,” Roone Arledge, the president of ABC News, told Bill Carter. He did not hesitate to blame Murdoch in the pages of the Times. “We couldn’t believe that offer of $10 a subscriber,” he said. “It’s the same thing he did in escalating the costs of football rights and station values.”

Ailes gloated. “Now we’ll be getting résumés from ABC as well as NBC,” he boasted to USA Today. Dozens of CNBC and A-T executives, producers, and anchors had already joined Ailes at Fox News. Judy Laterza, his seasoned assistant, was there. So was his Mike Douglas mentor, Chet Collier. Ailes Communications staffers, including Kathy Ardleigh and Scott Ehrlich, who had followed him to CNBC, followed him to News Corp. CNBC pressman Brian Lewis became his spokesperson. In December, he’d completed a master’s thesis in communications at Fairleigh Dickinson University that had been inspired by Ailes. (“The News Media: The Modern Day Electoral College,” he titled it.) CNBC CFO Jack Abernethy left to do the same job for the new cable channel. CNBC ad man Paul Rittenberg became head of Fox’s advertising sales. And, after peppering Ailes with requests to join the new network, Steve Doocy got a job as a weatherman and “man on the street.” In all, eighty-two former A-T and CNBC staffers would decamp to News Corp. That spring, NBC CEO Bob Wright called Ailes to complain about the staff defections. The conversation was brief.

“You’ve been poaching my people,” Wright said.

“It isn’t poaching; it’s a jailbreak!” Ailes roared.

In the press, Zaslav continued to provoke Ailes. “Our view is we wish Rupert luck,” he told The Hollywood Reporter in a story published on May 7. “We don’t see his service as a competitor.… We’re launching with a real news and information service. We already have deals for distribution with the top 100 multiple system operators.” A few weeks later, Ailes struck back. On Friday, May 31, Justin Manus, an attorney representing Ailes, sent a letter to Ed Scanlon threatening legal action. In it, Ailes accused Zaslav of dirty tricks that were designed to damage Ailes’s ability to sell Fox News to the cable industry. “It has come to our attention that David Zaslav of NBC has been showing Cable Operators a carefully edited video of the start-up problems of the A-T Network, and telling them that these problems were created by Roger Ailes.” Several days later, NBC’s general counsel, Rick Cotton, fired back in a letter, denying any wrongdoing.

While Ailes and NBC traded legal letters, the war was shifting to a strategic piece of terrain, as News Corp and NBC sought to win over Time Warner Cable, the most important cable distributor in the country. The system reached 11.5 million domestic cable viewers, but, more important, it was the gateway to Manhattan, the media capital of the world, inhabited by the Madison Avenue advertisers who controlled the flow of billions of marketing dollars. Time Warner Cable had a monopoly on New York City’s one million cable subscribers. Adding complexity to the negotiations, because Time Warner had merged with CNN’s parent company, Turner Broadcasting, in 1995, it was against the company’s interest to introduce into their market a competitor to CNN.

In early June, Murdoch and Chase Carey lunched with Time Warner CEO Jerry Levin and Time Warner president Richard Parsons in Murdoch’s private dining room. Murdoch and Carey explained that because Manhattan was so important for Fox News’s launch, News Corp would pay handsomely for access. Murdoch was offering Time Warner $125 million—more than $10 per subscriber—to carry Fox News. Levin and Parsons were noncommittal. After the lunch, Murdoch followed up with a confidential two-page letter to Levin. Murdoch portrayed Ailes’s channel in lofty terms. It was a sales pitch that clearly oversold the middlebrow product Ailes was actually planning to roll out. Fox, Murdoch promised Levin, would be a “high quality” news channel “designed to provide more information to viewers than any current news on the air.” Remarkably, Murdoch even promised Levin that Fox News would carry “more news than talk programming,” a direct contradiction to the vision Ailes and Chet Collier had for the channel.

At the time Murdoch was pitching Levin on carrying Fox News, he was gaining an unlikely ally. Regulators at the Federal Trade Commission, reviewing the Time Warner–Turner deal, were coming to Murdoch’s aid. FTC chairman Robert Pitofsky, an antitrust scholar at Georgetown University and a vocal opponent of media concentration, was planning to ask Time Warner to carry a competing cable news network, in exchange for agency approval of the deal. The move essentially guaranteed that either Fox News or MSNBC would find long-term space alongside CNN in the crucial New York market. Given the clash of conflicting agendas between NBC, News Corp, and Time Warner, the three-way negotiations were always going to be fraught. But no one could have predicted that the competition would become as nasty as any of Ailes’s most contentious political campaigns.

Meanwhile, Murdoch notched a major victory that sparked fear in the executive suites at NBC. On the morning of June 24, News Corp sent out a press release announcing a distribution deal with John Malone. The two men were both allies and adversaries. Malone was the one media mogul Murdoch was said to fear. Politically, however, they were in sync. “There’s a huge diversity of values in this country between what people in central Manhattan think of the values of our society and what people in Peoria think the values of our society are,” Malone, a self-described libertarian, told The New Yorker. In agreeing to distribute Fox News, Malone extracted a steep price from Murdoch: News Corp agreed to pay a rumored $200 million in return for Malone’s commitment to put Ailes’s network in ten million homes by the time of its October launch. (Ailes denied that TCI was being paid $200 million, and a TCI spokesperson claimed that the so-called incentive payment was “nothing close” to that amount.) As part of the deal, Malone was given the option to buy a 20 percent stake in Fox News.

The concessions were simply the price of admission: no matter what happened with the Time Warner Cable talks, the Malone deal delivered enough subscribers to ensure that Ailes’s network would achieve a viable audience when it debuted in the fall. As important, Malone guaranteed that he would offer Fox News to all of TCI’s subscribers, but made no such commitment to MSNBC.

Murdoch’s distribution coup put wind at Ailes’s back and gave Murdoch confidence to double down on television. A few weeks after Murdoch inked the pact with Malone, he negotiated an even bigger transaction with Ronald Perelman to acquire the remaining 80 percent of his media company, New World Communications, for $2.5 billion. The deal increased News Corp’s stable of corporate-owned stations from twelve to twenty-two, and ensured that Ailes would have access to the biggest chain of broadcast stations, in terms of ownership. But as Murdoch was finalizing the deal with Perelman, NBC tacked ahead on July 15, when MSNBC debuted to mixed but extensive reviews. The News Corp channel was still a chaotic mess. But Ailes always viewed long-shot odds and operational challenges as opportunities. At America’s Talking, he used them as raw material to spin an inspiring David-and-Goliath narrative about his start-up. The contest retained, for Ailes, a deeply personal dimension. From his spacious second-floor corner office at News Corp, Ailes had a clear view of Sixth Avenue toward NBC’s offices at Rockefeller Center, where David Zaslav, Tom Rogers, and Andy Lack were working against him on a channel that should have been his. It was a visual reminder that his war with NBC was far from over.

Comments

Alice
Great book, nicely written and thank you BooksVooks for uploading

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