On Wednesday, 21st Century Fox FOXA officially announced that Bill O’Reilly, host of American cable news juggernaut The O’Reilly Factor, will not be returning to Fox News.
“After a thorough and careful review of the allegations, the Company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel,” 21st Century Fox said in a statement.
The O’Reilly Factor and its host have been staples in American cable news since 1996, redefining what it means to tell the news. For years, the show has been a huge revenue source for its network, Fox News, and especially its parent company, 21st Century Fox.
That was certainly the case up until the New York Times’ explosive report earlier this month that revealed O’Reilly has been involved in at least five cases in which he or Fox News settled with women claiming sexual harassment or other inappropriate behavior. The publication said that in total, O’Reilly and Fox News shelled out $13 million to settle these claims.
As a result, nearly 50 advertisers had either pulled their ads from The O’Reilly Factor, though this could be a conservative figure. Mercedes-Benz was the first company to pull its ads from the show, calling the allegations “disturbing given the importance of women in every aspect of our business.” Other carmakers like Subaru, BMW BAMXF, Hyundai, Mitsubishi, and Lexus quickly followed suit. Wayfair W, Orkin, T. Rowe Price, Allstate ALL, and a flurry of healthcare brands such as Advil, Sanofi, and Bayer also pulled their respective ads.
Huge Ad Revenue
According to Forbes, The O’Reilly Factor brought in roughly $110.8 million in advertising revenue last year, and from 2014 to 2016, the show generated $446 million in ad revenue. Compare that to ad revenue brought in by MSNBC’s Rachel Maddow and her show, The Rachel Maddow Show. In 2016, Fox News’ rival network’s biggest star only managed to bring in $20.7 million.
Fox News makes up about 10% of 21st Century Fox’s total revenue—including roughly 25% of its operating income—and this scandal will likely prove increasingly problematic for the Murdoch brothers’ media empire, even though O’Reilly is officially out.
The O’Reilly Factor averaged 3.98 million viewers per episode during the first quarter of 2017, the most of any prime-time cable news show, and “the consensus in the TV news industry is that losing O’Reilly’s program…could drive down ratings for the entire Fox News prime-time line-up,” notes The Los Angeles Times. Luckily for 21st Century Fox, the top two and three cable news shows in prime time are also on Fox News: Tucker Carlson Tonight with Tucker Carlson and Hannity with Sean Hannity.
O’Reilly’s Not the First
The harassment complaints are on top of separate allegations against Roger Ailes, Fox News’ co-founder. Last July, former Fox host Gretchen Carlson filed a lawsuit alleging that Ailes pressured her for sex and demoted her when she refused; the suit led to Ailes’ ouster as chairman of the network and a $40 million severance package, and Carlson receiving $20 million to settle the charges.
Despite its supposed “zero tolerance” policy regarding sexual harassment, more allegations have piled up against both Ailes as well as O’Reilly, and one has to wonder how long it will be before other aspects of 21st Century Fox’s business will be affected by the internal crisis at Fox News. The company’s impending $14.5 billion acquisition of British pay-TV provider Sky is still in the works, and the Murdochs lost out on the deal five years ago because the company was entangled in a phone-hacking scandal. It’s likely James and Lachlan didn’t want anything standing in their way this time around.
What’s Next for Fox News?
Fox said that Tucker Carlson will take over O’Reilly’s 8 p.m. timeslot. Tucker Carlson Tonight will then be replaced at 9 p.m. by Fox’s 5 p.m. show, The Five, starting on Monday. The O’Reilly Factor will continue for the remainder of the week.
But along with O’Reilly, popular hosts Megyn Kelly and Greta Van Susteren are also gone since the turmoil began last summer. O’Reilly helped Fox News topple CNN, owned by Time Warner TWX, back in 2002 to become the cable news leader, staying at the top ratings-wise ever since. Now, with three influential hosts gone, in addition to its formidable chairman, it’ll be interesting to see what Fox News does in the near future, and how 21st Century Fox handles the likely loss in revenue and power within the media industry.
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