Megyn Kelly was standing on the street in St. Petersburg, Russia, last week, waiting for Matt Lauer and the gang from Studio 1A to make the toss to her first on-location live shot in months, and her first at her new corporate home, NBC. Kelly had absconded to Russia to promote her highly prized one-on-one interview with President Vladimir Putin, the main feature in the debut episode of her new weekly newsmagazine show, Sunday Night with Megyn Kelly.
In some ways, though, the interview seemed secondary to a larger looming question—whether Kelly, who spent years wooing right-wing audiences at Fox News with her sharp questioning and prosecutorial instincts (and, yes, her sartorial flair), could appeal to the warm-and-fuzzy audiences that she would be encountering in her new gigs. Kelly, after all, was not only trying to pour new life into the staid newsweekly format; in a matter of months, she would also be on the receiving end of regular handoffs from the Today show gang as the host of a 9 a.m. broadcast that was rebranded for her talents.
Kelly’s ability to translate outside the Fox News bubble, and particularly to the softer environs of morning television, has been a question circulating in the television news business ever since she announced her surprising departure earlier this year. And judging from her toss, Kelly may still have her work cut out for her. Standing in St. Petersburg, she greeted Lauer and co-host Savannah Guthrie but did not appear to acknowledge another anchor on the set at 30 Rock, Hoda Kotb, who threw up her hands in good-natured surprise. To be fair, Kelly didn’t have a return video, so she couldn’t see who was on set, but the optics were nonetheless challenging for a woman whose arrival at NBC resulted in the departure of Tamron Hall, one of the only high-profile African-American women at the network. In the chilling world of cable news, where people grin through their tears—or, as Ann Curry did years ago, just cry—it was all people in the business could talk about for days. (An NBC insider pointed out that Kelly did greet Kotb in her throw back to the studio.)
Kelly’s foibles were certainly not unnoticed at her old digs—Fox News—where a little schadenfreude could be considered a welcome respite from what has been a startling couple of months’ worth of news. Weeks after the unexpected death of ousted co-founder Roger Ailes, and the shocking departures of anchor Bill O’Reilly and Ailes’s former deputy Bill Shine, whom one former Fox News executive called Ailes’s spiritual “brother,” the existential angst within the company’s subterranean newsroom has reached a deeper level. A standoff exists between the old guard, represented by Rupert Murdoch, and a newer reformist wing, embodied by his sons, James and Lachlan Murdoch, who oversee parent company 21st Century Fox. At the center of the debate is a question that has essentially plagued the network since Ailes’s ouster a year ago: Is Fox News hoping to patch over its recent spate of unpleasant headlines, or is it ready to truly transform its culture once and for all? And, probably more important: what would be left if it did?
“If Rupert is still in position, he’s not going to let you change a whole heck of a lot,” a former Fox executive told me. “But I’m not sure James and Lachlan have an idea [of what they want to do] as much as they realize that some significant change has to occur,” this person continued. “It’s been an embarrassment, and that precedes the scandal.”
Fox News, which has reliably produced a stunning billion-plus dollars in annual profit for 21st Century Fox, is a major part of its parent company’s revenue picture. But it is also increasingly clouding the mothership’s public perception. When James and Lachlan reportedly met with British regulators to help smooth their proposed purchase of Sky, they did so amid a cloud of sexual harassment lawsuits that persist even after Ailes’s death. (Ailes steadfastly denied allegations against him. O’Reilly has called claims against him unfounded.) Still, recent elevations of executives who worked hand-in-glove with Ailes, such as Suzanne Scott and Dianne Brandi, seem to indicate that the senior Murdoch still has some juice at the operation where he holds the chief executive title. Indeed, some observers expect a return to business as usual. Another Fox News insider countered that Rupert and Lachlan are simpatico, and that a recent meeting hosted by Rupert, president of news Jay Wallace, co-president of Fox News __Jack Abernethy, and Scott led many to believe that the worst was over. “Over the last few months people were wondering, ‘When is this going to stop?’ That feeling is gone,” the insider told me.
Lachlan, meanwhile, is said to be recruiting possible leaders for the Fox News newsroom. One name that surfaces with regularity is David Rhodes, the president of CBS News, and a former V.P. at the network. Rhodes would appear, on some level, a perfect choice—a pedigreed newsperson with a history at Fox as well as deep connections in liberal political circles. (His brother, Ben Rhodes, was Barack Obama’s foreign policy guru.) (A spokesperson for Rhodes declined to comment.)
But Rhodes is still under contract, and close observers say that while he would be a “romantic choice” for Fox News, he’s happy where he is. Industry insiders also speculate that while the Murdochs have been talking about a new leader for months, they’ve made little progress on finding a suitable successor to Ailes. “It’s the hardest job in media to fill,” said one former Fox executive. “You are possibly putting a very successful business at risk, but you have to do it, there has to be a course correction or they will lose that very successful business.”
The elder Murdoch, however, does not appear to be running out of patience. “From my knowledge, Rupert isn't going anywhere,” the Fox News insider told me. “He is having the time of his life running Fox News. And the team and newsroom working for him love having him around.”
Perhaps owing to its tried-and-true formula of babes and geezers, change has not always been welcome at Fox News. Even after Ailes’s ouster, the Murdochs at first paid lip service to the notion that the organization’s culture had to change. As I’ve previously reported, the law firm Paul, Weiss’s internal investigation into Fox News was narrowly focused on Ailes, and did not scour e-mails and phone records across the company. Meanwhile, Trump’s surprise victory ushered in an era of resurgent white men. After Kelly’s departure, even her replacement, Tucker Carlson, enjoyed a ratings spike with the assist of an O’Reilly lead-in.
For the last year, the Murdochs have had to focus on ways of tinkering the culture while preserving the ratings juggernaut. They hired a new head of human resources, Kevin Lord, who added four women to the H.R. department. Abernethy hired Amy Listerman as the first female C.F.O. in Fox News’s history. But Fox News experienced another first recently. For the first time in his history, the network saw itself beaten during prime time in the coveted 25-to-54-year-old demographic by, of all people, Rachel Maddow. Those ratings stumbles suggest a larger problem. (A Fox News spokesperson pointed me to the latest May ratings figures in which the network won across the board in viewers and demo, and demonstrated gains when compared with the same period from last year.)
Fox News might have been able to survive Ailes’s ouster and Kelly’s departure, but O’Reilly’s dismissal really is hard to work around. His departure took away Fox’s biggest star and shuffled the entire schedule. It’s hard to imagine that Maddow would be notching victories in the demo with O’Reilly at 8 p.m. and Kelly at 9. But, instead, she’s competing against The Five with an ensemble cast of Kimberly Guilfoyle, Dana Perino, Greg Gutfeld, Jesse Watters, and Juan Williams, who, back in the early 1990s, apologized for “wrong” and “inappropriate” verbal conduct toward women at The Washington Post when he was a reporter at the paper’s now-defunct magazine. He replaced Bob Beckel on The Five, who was fired after making a “racially insensitive” remark to a Fox News colleague. (Fox News terminated other executives within the last year amid sexual harassment and racial discrimination allegations. The company notes, however, that it is nearly complete with extensive corporate sensitivity training measures.)
Some executives may cast aside concern over the ratings, but the softness in the numbers have made the staffers and executives at Fox News all the more twitchy about the future. “They are feeling the pinch,” said one industry insider who used to work for Ailes. “They are trying different things with no real leadership, and trying to see what can stick.” In the meantime, this person said, there does not seem to be widespread faith in the network’s de facto new face, Sean Hannity, who appears to be agitating for a ticket in the way-back machine. “They’re rolling their eyes at Sean Hannity,” this person continued. (Even so, the Fox insider told me that it would be a “disaster” for Fox News to lose Hannity, given that he is the network’s biggest and longest-standing star. “He has a place at Fox that has been his home for many years,” this person said. “He’s looking to stay, and I think they want him to stay.”)
Indeed, the division within Fox News is a microcosm of a larger trend. On some level, many staffers recognize that the world in which O’Reilly and Ailes dominated is disappearing, too. During his heyday, of course, Ailes exhaled old-line G.O.P. mantra. Karl Rove was a regular visitor, and the exchange of ideas between the Roves of the world and Ailes created the modern Republican Party, or at least the one that existed through the Bush era. Now, things have gotten a lot more complicated. After years of general audience cohesion over a distaste for Barack Obama, we now have a Republican president whom a good portion of the Republican Party, and the Fox News audience, distrusts. At the same time, there are Trump devotees who believe Fox News hasn’t gone far enough, and who cringe every time Shep Smith or Bret Baier utter a critical word about him.
Under Ailes, the Fox News insider told me, the network was run like a political campaign, with ratings scrutinized on a daily basis like polling numbers. This created a lot of internal sparring, often between Hannity and Kelly, and Kelly and O’Reilly. These days, though, the competitors are coming from the outside, and not just the more liberal elements of the cable-news world. Fox News must contend with the continued balkanization of the right-wing media ecosystem, where Fox has to contend with ankle biters like Breitbart (whose former chairman and current White House chief strategist Steve Bannon reportedly shunned a dying wish request from Ailes to start a new outlet) and Alex Jones’s Infowars.
And there are larger threats on the horizon. “The door has been opened for someone like Sinclair to step up,” said Joel Cheatwood, the former president and chief content officer of The Blaze, and a former senior vice president at Fox News. Sinclair, of course, is in the process of purchasing Tribune Media, which, if successful, would give the combined companies coverage, through television stations, in a huge portion of the country. “Suddenly, you’d have a company that will come close to matching Fox, if not exceeding it in terms of coverage and distribution,” Cheatwood told me.
All of this figured into how Fox News insiders watched their former colleague’s debut over the weekend at NBC. There were the typical petty comments. Her hair was too beachy, one told me; her makeup too flat. She didn’t follow up enough, and Putin stuck to his talking points. But it turns out that even in this regard, Fox News can occupy its own reality. Despite beating CBS’s 60 Minutes in the demo, and receiving some strong reviews, there was only faint praise among Fox insiders. “No one wishes her ill will,” one told me. “But I didn’t read any good reviews of her performance, let’s just say that.”
Correction: This article has been updated to accurately reflect the nature of Juan Williams' departure from The Washington Post.
