Roger Ailes: Off Camera (17 page)

Ailes’s primary tool for this is Fox News Latino, a website headed by Frankie Cortes, a young graduate of the apprentice program. Cortes is clearly being groomed for an important role in what will certainly be a bigger target area in the future. Ailes recently sent him on an Anti-Defamation League junket to Israel. A report on that journey was the first item of business at a lunch meeting Ailes chaired with the senior staff of the website. Cortes said that he had been impressed by the country, found the schedule hectic, and very much enjoyed the food (which, I can personally attest, is a step up from the fare at Ailes’s working lunches; this day the menu was a choice of ham and processed cheese or tuna fish sandwich and potato chips). Ailes asked if ADL chief Abe Foxman had been on the trip. Cortes said he hadn’t been.

“Israel’s in a tight spot right now, and this network stands behind it all the way,” Ailes said. This didn’t come as a surprise to anyone at the meeting. There are two framed photographs in Ailes’s office: One is of General George Patton; the other shows him warmly shaking hands with Israeli prime minister Benjamin Netanyahu. Hispanics, as a community, are still making up their minds about the Middle East, and it is important to Ailes to help them reach the “right” conclusions.

Ailes asked for a report on the site, which was founded in 2010.

“It’s really taking off,” said Cortes. “We’re getting three million unique hits.”

“Do you deal with the illegal immigration story or are you ignoring it?” asked Ailes. It was a management technique I saw him use repeatedly. There was no chance at all that Roger Ailes didn’t know exactly how the website was reporting on the hottest issue of the day.

“We are, certainly,” said Cortes.

“Where are people on this?” Ailes asked.

“We’ve got a poll that shows 70 percent of Latino voters are for Obama.”

“What else does the poll show?” asked Ailes.

Cortes said that it revealed a high degree of optimism, especially when respondents were asked about their children’s futures.

“That’s because they haven’t read the Obama health care plan yet,” Ailes said. “You know, if I had to go to the army, I’d want to be with Latinos. They have a lot of medals.” I was expecting him to order up a story on Hispanic military heroism, but his mind was on politics. “The main reason the Republican Party doesn’t get the Latino vote is because it doesn’t know how to talk to them,” Ailes said. “Literally, we have to speak their language.” This year, a new Spanish-language channel, MundoFox, began broadcasting two daily newscasts in Spanish (one for the East Coast, one for the West), anchored by Rolando Nichols of KWHY-TV, a Fox affiliate in Los Angeles.

Ailes has a heterodox position on illegal immigration, at least for a Republican in an election year. “Every country has to be able to enforce its borders. Otherwise there is no sovereignty. If I was president I’d do what’s necessary, including putting Navy SEALs on the border with orders to shoot to kill drug dealers who are trying to infiltrate the country,” he told me several months after this meeting. “Immigrants who have committed crimes should be rounded up and punished. But, at the same time, a lot of conservative views on immigration are reactionary. Immigrants from Mexico are cultural conservatives and we should be encouraging them to come legally. Texas and the other border states could be modern Ellis Islands. Let ’em sign the register, make them hum a few bars of ‘The Star-Spangled Banner,’ and then welcome them to America.”

Ailes is also happy to contemplate a deal that would allow those here illegally to remain. “Any parent would do it for his kids,” he says. “Expulsion isn’t a solution. I’m not big on searching out people who are here without visas or papers. Maybe make them do community service, or pay a fine of some kind they can work off when they get on their feet. But punishment? That’s like punishing a seventeen-year-old girl for having an abortion. It makes no sense.”

For now, Ailes settled for marching orders. “Don’t go soft on the Republicans. They have to learn how to talk to Latinos. Is [Senator Marco] Rubio popular?” There was a brief discussion of the question among the Hispanic journalists. The consensus was, yes and no.

“I like Rubio,” Ailes said. “But I don’t know about as a vice presidential candidate. He’s a nice guy, and that role requires kicking the crap out of your opponents. The first question they [the candidate’s vetting team] will ask him is, ‘Can you go after Obama?’ And I’m not sure he can.” He paused, thinking about vice presidents he had known.

“I have a soft spot for Joe Biden,” he said. “I like him. But he’s dumb as an ashtray.” He consulted his watch, popped a last potato chip into his mouth, chewed thoughtfully, and said, “This country will fail if we don’t solve the immigrant problem. America is a
culture.
We have to make sure everyone feels at home here. You are all trusted lieutenants. Just remember, we are running a business here.”

TAKING CARE OF BUSINESS

When I set out to write about Roger Ailes, one of the first calls I made was to Rupert Murdoch. I explained to his secretary that I was doing a book on Ailes and, while I of course understood that Mr. Murdoch is a busy man, I hoped he would find some time to talk to me about his partnership with Ailes. She assured me that she would pass the message along.

Fifteen minutes later, the phone rang. The secretary was on the line. “Mr. Murdoch will speak to you now,” she said.

“Right now?”

“If that’s convenient.”

I had no questions for Murdoch. I hadn’t even thought about any questions. I told that to the secretary and asked if we could schedule a time when I was better prepared.

“Just a moment, please,” she said. The next voice I heard belonged to her boss. “I understand you want to talk to me about Roger,” he said in the Australian accent that hasn’t faded in the many years he has spent living in London and New York. “What would you like to know?”

“About you and Roger,” I said. “Start anywhere.”

“Roger Ailes has created an asset of enormous value,” said Murdoch. He wasn’t talking about value to the conservative movement, the Republican Party, the ideological balancing of American journalism, or any such nonsense. He was talking about money. In 2011, the division that Roger Ailes created from scratch accounted for more than one-third of the net income of News Corp, a company whose nearly countless holdings include such iconic companies as Twentieth Century Fox, the
Wall Street Journal
, the London
Times
, and HarperCollins. “Roger surprised me with his executive ability,” Murdoch said. “It’s very unusual for such a creative guy to be a great businessman. Everyone thought we were nuts when we started out. And look where we are now.”

Ailes’s contribution to Murdoch’s success galls his critics. “Ailes is clever, agile, swift, and a survivalist who can still—despite his advanced age and regal professional background—stomach taking orders and guff from another person,” wrote Alexandra Kitty in her 2005 book,
Outfoxed: Rupert Murdoch’s War on Journalism
(which is based on the documentary of the same name). “He is a media mogul’s dream second-in-command: Someone who relishes his power as he relinquishes it. . . .”

This is a rather grim way of putting it, but there is no doubt that Murdoch is lucky to have Ailes, and he knows it. His gratitude is expressed the old-fashioned, capitalist way. In 2011, Ailes earned nearly $16 million, about half of it in performance bonuses. The following year he got a raise to roughly $21 million. “I’m not a manager at Wal-Mart who did a good job and got promoted to a bigger store,” Ailes says. “I built the store.”

“Rupert is not threatened by strong men around him,” says Brit Hume. “He knows Roger is advancing his interests, and he’s grateful because with Roger there he doesn’t have to worry about one of his enterprises.” Murdoch confirmed this. “Roger is paranoid about the opposition,” he told me. “He or his wife is always watching the screen, keeping an eye on the competition. And he handles prima donnas very well. He runs as happy a division as we have at News Corp.”

This is not a small matter. All is not well in the other divisions of News Corp, or in the Murdoch family. In 2005, his eldest son, Lachlan, lost a power struggle with Ailes over who would control News Corp television properties, and Lachlan departed for Australia. The
Wall Street Journal
, not yet owned by Murdoch, published a front-page story claiming that Ailes’s performance as chairman of Fox Television had been disappointing and that he had “ruffled feathers” among fellow executives at News Corp. In response, Ailes and Murdoch gave a rare joint interview to the
Financial Times
in which Murdoch called the story “a hit job” and “absolute crap.” He said that Lachlan’s departure was sad, but the job he had sought, which would have put him over Ailes, was too big for the boy. “I admire him greatly but there is a difference between being number one in Australia and being number three [in the United States],” Murdoch said. Number three is Roger Ailes.

Murdoch’s daughter Elisabeth is married to Matthew Freud, a powerful British public relations executive who disapproves of Fox News. “I am by no means alone within the family or the company in being ashamed and sickened by Roger Ailes’s horrendous and sustained disregard of the journalistic standards that News Corporation, its founder, and every other global media business aspires to,” he told the
New York Times
in 2010. A spokesman for Murdoch replied that his son-in-law had been speaking for himself, and that Murdoch was “proud of Roger Ailes and Fox News.” Ailes mocked Freud in an interview in the
Los Angeles Times
, saying he couldn’t pick the British adman out of a lineup and suggesting that he (a descendant of Sigmund Freud) “needed to see a psychiatrist.”

Most recently, in London, Murdoch and his son James had been the subject of parliamentary questioning over allegations of bribery and phone hacking at a tabloid newspaper under the supervision of the division run by James. Subsequently, he was forced to step down as chairman and CEO of News Corp Europe and Asia, and as executive vice president of British Sky Broadcasting, a company in which News Corp was trying to gain a majority share. It was a painful episode for Rupert Murdoch. Meanwhile, Roger Ailes’s money machine was smoothly turning out record profits.

Ailes and Murdoch are very respectful to each other. Ailes credits Murdoch with realizing that there was a niche audience (“half the country,” as Charles Krauthammer, a Fox contributor, wryly put it) for a cable news network with a conservative perspective. Murdoch, for his part, assured me that he doesn’t dictate editorial decisions. “I defer to Roger,” he said. “I have ideas that Roger can accept or not. As long as things are going well . . .”

Murdoch often drops by Ailes’s office to joke and gossip about politics. “Roger and I have a close personal friendship,” he told me. Ailes agrees—up to a point.

“Does Rupert like me? I think so, but it doesn’t matter. When I go up to the magic room in the sky every three months, if my numbers are right, I get to live. If not, I’m killed. Our relationship isn’t about love, it’s about arithmetic. Survival means hitting your numbers. I’ve met or exceeded mine in fifty-six straight quarters. The reason is, I treat Rupert’s money like it is mine.”

•   •   •

As a businessman, Ailes is self-taught. “I don’t have a financial background,” he told me. “I was terrible at math in school. But I do have the ability to read financial sheets. I can look at numbers and see aberrations and figure out what’s going on.”

In a meeting with senior ad salesmen Paul Rittenberg and Jeremy Steinberg, the subject of political advertising arose. The Romney primary campaign had just made a million-dollar buy. “Call the Brain Room and find out what other campaigns have money,” Ailes instructed them. “Have you spoken to Obama?”

“Nothing from them,” Steinberg reported with a grin.

“We should send his people the Pew report that says we have more independents than the other cable networks,” Ailes said. “It would kill them to put ads on our air, but hell, if they advertise on MSNBC all they’ll get is Dennis Kucinich’s family. By the way, when’s the next Christmas party?” Christmas was months away, and the segue seemed to come out of nowhere, but I caught the two admen exchanging glances.

“I noticed I didn’t get invited last year,” Ailes said. It sounded like rueful office sitcom humor, but Steinberg and Rittenberg assured him that it had been a mistake and that he would be on the list this Christmas.

Ailes nodded and went on to other matters, but as the meeting was breaking up, he returned to the party. “Jeremy, it’s your ass if I don’t get an invitation. And I want a head count.”

After they left, I asked Ailes why he gave a damn about being invited to an office party. “They didn’t invite me last year because they didn’t want me to know how many people they’ve got working there,” he said. “Here’s the secret with ad sales. Somebody is in first place. Somebody’s number two. Then there’s somebody number eighteen and she’s really good-looking and doesn’t do shit. I want to see who’s there.” Later he called his secretary and asked her to make sure he got an invitation and a copy of the guest list. They had promised him a head count, and they were his loyal lieutenants, but as an old client of his once said, “Trust, but verify.”

In addition to Fox News, Ailes runs the Fox Broadcasting Company, thirty-five stations in twenty-six cities around the United States, including two in New York. His deputies are longtime colleagues. Jack Abernethy, the CEO of Fox Television Stations, came with Ailes from CNBC, where he had been chief financial officer. Dennis Swanson, president of station operations, has known Ailes since they worked together at TVN in the seventies. Since then, Swanson helped create
Monday Night Football
at ABC, gave Oprah Winfrey her first daytime talk show, and managed the NBC affiliate in New York City. They meet with Ailes periodically. One afternoon I joined them.

Ailes had the London phone-hacking scandal on his mind. “Do any of our local stations have investigative units?” he asked.

“Some,” said Swanson. “Our Atlanta station broke the story about Herman Cain and his girlfriend.”

Ailes’s antennae went up. He wondered if the scoop might have come from someone close to the White House, to get Cain out of the race.

“The last thing the president wants is a black candidate going around saying he’s against entitlements,” he said.

“The woman was actually sad to out him,” said Swanson. “But she was under pressure.”

“She allegedly got $200,000 from somebody close to Obama,” said Ailes. He turned to me and said, “Write ‘allegedly.’” (The story didn’t pan out and Fox didn’t report it.)

“Cain’s shopping a new show,” said Swanson.

“Nobody will touch him,” Ailes predicted. “They won’t want a black man who is against entitlements.” That settled, he turned to the business at hand. “Where are the candidates advertising?” he asked. “How much and in which markets?” It was commercial information, but it would also give him a read on how much money the candidates were actually raising. He asked about Target and Wal-Mart, and was told that they had decided to advertise on the Big Three networks. Ailes told them to work on the box-store chains, and they assured him that it was already being pursued.

“Car advertisements are up,” said Abernethy. “Movies, not so hot.”

Ailes had recently seen and liked
Act of Valor
, a movie about the Navy SEALs that was doing big business at the box office.

“Most of the reviews were bad,” Abernethy observed.

“Of course they were bad,” Ailes said. “The reviewers are all liberals.”

Nobody disagreed.

Ailes wanted to talk about Saturday night. “What about Regis Philbin?” he asked. Philbin had recently retired from ABC’s
Live! With Regis and Kelly
after a twenty-eight-season run with multiple cohosts. “I’ve known Regis since 1963, and he’s still a hell of a talent. Maybe we could use him on Fox News for an hour on Saturday nights, drive the ratings? Or maybe do a syndicated show with him.”

The meeting ended with a discussion of Sunday morning soccer. Fox had recently acquired the rights to English Premier League football, which, because of the time difference, ran on Sunday mornings. Stations around the country had preempted Chris Wallace’s interview program and moved it to a different time slot, making it hard to find. Not only that: Fox Sports wanted Brian Kilmeade, the cohost of
Fox & Friends
, who knows the game well, to take part in the broadcasts. Ailes didn’t care for this one bit; he was afraid it was a case of incipient talent-nabbing by the sports division. “
Fox & Friends
is all about balance among the hosts, and I don’t want to upset that,” he said. “Tell them to find somebody else.” Nobody was going to mess with Roger Ailes’s winning combination for the sake of goddamn soccer.

Critics who chafe at Ailes’s seemingly endless string of successes have taken heart from the struggles of Fox Business News. “It hasn’t worked,” Av Westin told me with unmistakable schadenfreude. “Roone Arledge knew how to fix his failures. You don’t see that with Roger.”

That is a premature judgment. When Fox Business first went on the air, in 2007, it averaged 6,300 viewers a day. It still runs far behind CNBC by as much as five to one, but it is doing better financially than is generally assumed. Ailes had a clause in his contract that called for a $3 million bonus if Fox Business broke even by 2012, and he collected a year early. “We’re even,” he told me. “Fox Business isn’t costing Rupert a penny, and that’s a pretty big asset to be sitting out there.”

Still, breaking even isn’t what Ailes does, especially when he is still trailing a network he once ran, and whose biggest star, Jim Cramer, he once fired. “We could spend $100 million on Fox Business News and change the game,” he says. “I just have to convince Rupert. I think I can.”

Part of the equation is talent. Ailes has been tinkering with the network for several years. In 2009, he jacked up morning ratings by hiring Don Imus, who had left his MSNBC television slot in disgrace after calling the black players on the Rutgers women’s basketball team “nappy-headed hos.” “He apologized and I felt he had paid his dues,” says Ailes. The following year Ailes poached Gerri Willis from CNN to bolster the evening schedule. And in 2011, he signed Lou Dobbs, the erstwhile star of CNN’s business news, whose vocal opposition to illegal immigration and clashes with the network’s president, Rick Kaplan, cost him his job. Dobbs has since become FBN’s most popular host. Ailes scored again when he picked up nineteen-time Emmy winner John Stossel, the libertarian former cohost of ABC’s
20/20
who does double duty on Fox News. With the right talent on board, Ailes changed the entire prime-time roster in early 2012, dispensing with poorly performing shows by David Asman, and the controversial Andrew Napolitano, a high-profile, low-ratings supporter of Ron Paul.

But raising FBN’s profile requires more than talent. It needs promotion. Ailes had his sights set on the recently vacated Charles Schwab space on the ground floor of the News Corp building, on the corner of Sixth Avenue and Forty-Seventh Street. Other divisions of News Corp were interested in laying hands on the spot, but Ailes intended to get it and use it as a showcase for FBN. On a sunny afternoon in early April, dressed in his customary black suit and accompanied by the network’s chief engineer and a small retinue of aides, he set off on an exploratory foray.