New York — The founder of Fox News Channel was forced out in a sexual harassment scandal last summer. The network’s No. 1 star, Bill O’Reilly, has been accused of crude and vindictive behavior toward women. Lawsuits depict a frat-house environment at the company’s New York headquarters.
And yet, by the most important yardstick for television executives, Fox has been thriving as never before.
But O’Reilly’s top-rated show may now be starting to feel a financial sting.
There’s been a drumbeat of embarrassing Fox News stories in just the past few days and a growing advertiser boycott is threatening O’Reilly as never before. The New York Times revealed over the weekend that O’Reilly and Fox News’ parent company, 21st Century Fox, paid settlements totaling $13 million to five women to keep quiet about supposed mistreatment by O’Reilly. A Fox contributor, Julie Roginsky, said in a lawsuit that her career stalled after she rebuffed former chief executive Roger Ailes’ advances. A third black woman came forward to claim racial abuse by a since-fired executive.
A dozen major advertisers, ranging from automakers Hyundai and BMW, to financial firm T. Rowe Price, insurer Allstate and drugmaker GlaxoSmithKline, have pulled their ads from “The O’Reilly Factor.”
The advertiser boycotts, however, are likely manageable for Fox, said Pivotal Research Group analyst Brian Wieser in a note Tuesday.
Wieser noted some advertisers had already decided to stay way following the sexual harassment scandals of the network’s departed head, Roger Ailes, and newly concerned companies will wind up on other Fox News programs. Even if O’Reilly were forced to leave the network if the scandal broadened, the channel’s brand is bigger than its hosts, he said.
The other companies pulling ads Tuesday were automaker Mitsubishi, personal finance site Credit Karma, drugmaker Sanofi, pet food company Ainsworth, men’s shirt seller Untuckit, and online marketing firm Constant Contact. They joined Mercedes Benz, which said Monday it was backing away from O’Reilly’s show.
Hyundai said it currently has no ads on “The O’Reilly Factor,” but it pulled spots on future episodes. The automaker says it wants to partner with companies and programming that share its values of inclusion and diversity. BMW said it suspended advertising on the show due to the recent allegations, as did T. Rowe Price, Sanofi, Ainsworth and Constant Contact. Allstate said support for women is a company value and it had also suspended advertising on the show.
GlaxoSmithKline said it had “temporarily put a hold” on ads on O’Reilly’s show while it reviews the situation.
A Mercedes-Benz spokesman said Monday night that the company had pulled ads from O’Reilly’s show and reassigned them to other Fox News shows. Sanofi and Untuckit have the same plan. BMW said it wasn’t sure where it would place its ads instead.
In a statement, Fox News said that advertisers who pulled their ads would be directed to the network’s other programs.
The network just finished the first three months of the year with the biggest quarterly audience a cable news network has ever had. It’s watched more than any other cable network, including the entertainment ones, O’Reilly leads the way. Fox is the home for fans of President Donald Trump and Trump himself, who frequently tweets about its shows and reporting.
O’Reilly is Fox News’ top revenue producer, according to research firm Kantar Media, bringing in over $178 million in ad dollars in 2015 and $118.6 million in the first nine months of 2016. Fox News itself makes up one-fifth of parent company 21st Century Fox’s profit, according to estimates from Anthony DiClemete, a media analyst with the Nomura investment bank.
Many of the Fox News stories are background noise to Fox viewers suspicious of bias by the “mainstream media,” said Brent Bozell, president of the conservative media watchdog Media Research Center. Many question the truth of the stories or see them as payback for Fox’s success, he said.
Offscreen personnel issues won’t matter to Fox fans who think there are no television alternatives for people who believe as they do, said William Jacobson, a conservative blogger and law professor at Cornell University.
“They’re not going to stop watching Hannity because of Roger Ailes,” Bozell said. “I don’t think they connect the two of them at all.”
CNN and MSNBC are also benefiting from the interest in politics, and so Fox hasn’t been alone in its success.
But last summer’s forced departure of Ailes, who has vigorously denied the charges against him, was a step into the unknown for Fox. Since he was the autocratic leader who invented its shows and set the tone, many wondered if Fox would change direction or lose focus without him and with Rupert Murdoch handing the reins over to his less conservative sons.
Instead, Murdoch put Ailes’ old deputies in charge “and they haven’t missed a beat,” said Jonathan Klein, former CNN president.
“Fox News is exquisitely adept at targeting and over-delivering to the portion of the audience that believes in Donald Trump, that loves Donald Trump, that doubts the doubters of Donald Trump,” Klein said.
During his time at Fox, O’Reilly has swatted away controversies that would take out many others in the business.
Fox moved swiftly against others faced with accusations of wrongdoing, including Ailes. The network hasn’t addressed whether O’Reilly has faced discipline.
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