Now that Rupert Murdoch is out, here's the biggest question for Fox

Roger AilesAPRoger Ailes and Rupert Murdoch

With Rupert Murdoch out as CEO of 21st Century Fox, the next major question for the company is what happens to Roger Ailes, the leader of Fox News, the fantastically profitable cable network.

Rupert is handing the company to his son, James. Rupert will be executive chairman. Rupert’s other son Lachlan will be promoted to executive co-chairman. At the same time, Chase Carey, the COO of the company will be leaving as well.

From what we’ve been told, Carey and Ailes are close allies, and they don’t get along with the Murdoch boys. With Carey and Rupert out, Ailes is losing two powerful allies at the top of the company.

Fox says Ailes will still report directly into Rupert, which is an unusual arrangement, and supports what we’ve been told about Ailes’ relationship with the Murdoch boys. Perhaps this arrangement can work in the long run, but it seems destined to run into problems. The CEO of the company should have direct control over one of the company’s most valuable assets.

While Fox News is a controversial news outlet, there’s no denying its astounding success.

In a recent profile of Ailes, Hollywood Reporter detail the impressive stats on the channel:

  • Wall Street analysts value Fox News at $US15 billion.
  • It contributed 18% of 21st Century profits in 2014.
  • It has 70 consecutive quarters of profit growth.
  • SNL Kagan says it will do $US2.18 billion this year from advertising dollars and affiliate revenue.
  • It gets $US1 per subscriber per month which blows away CNN at $US0.61 and MSNBC at $US0.30.

The 75-year-old Ailes’ contract at Fox is up in 2016. He told the Hollywood Reporter nobody from Fox has been in touch to talk about renewing his deal, yet. Considering the fact that Ailes is a cash machine for Fox, this is a tad strange.

Rupert and James MurdochREUTERS/ Eddie KeoghRupert and his son James

With new leadership at Fox, it will be interesting to see what happens with Ailes.

He built Fox News from scratch, and the network’s talent say the network would fall apart without him.

Bill O’Reilly for instance, told the Hollywood Reporter: “I have no idea how the network would shake out if he wasn’t here.”

Shep Smith said: “But like no other place I’ve ever worked, it’s all about him. Everything you see and feel about, it is from him. The truth is, he loves this place.”

And even rival CBS News president David Rhodes said, “It’s his creation. He built it … I’m not sure anyone else can run it.”

Bill O'ReillyFox NewsBill O’Reilly

There are few successful organisations that are truly dependent on one person. However, it’s quite clear that Ailes is the driving force behind the success of Fox.

New CEO James Murdoch will either have to figure out how to get along with Ailes — and offer him a big pay day to stick around — or he’ll have to let Ailes walk and risk sinking one of his most profitable, influential, and important products.

This is going to be a fun media drama to watch play out over the next twelve months.

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