FOXA Fox Corporation

By Joe Flint 

Roger Ailes stepped down as Fox News Channel's chairman and chief executive in the wake of a sexual harassment scandal, ending his successful but controversial tenure at the helm of the cable news network he has built up over 20 years.

Fox News parent 21st Century Fox Inc. announced Mr. Ailes's resignation in a statement on Thursday and said 21st Century Fox Executive Chairman Rupert Murdoch will take on the role of Fox News chairman and acting CEO.

"Roger Ailes has made a remarkable contribution to our company and our country," Mr. Murdoch said in a news release. "Roger shared my vision of a great and independent television organization and executed it brilliantly over 20 great years."

Mr. Ailes will get an exit package worth more than $40 million, according to a person familiar with the matter, and will be a consultant for Mr. Murdoch. Mr. Ailes's agreement includes a noncompete clause that prohibits him from starting a competing video product, the person said.

The departure of Mr. Ailes comes less than three weeks after former Fox anchor Gretchen Carlson filed a lawsuit alleging that Mr. Ailes retaliated against her and sabotaged her career because she complained about a hostile work environment at the network and rebuffed his advances.

Mr. Ailes has denied the charges. Fox hired a law firm to investigate, and the probe has revealed a pattern of inappropriate behavior toward female staffers, people familiar with the matter said.

21st Century Fox and Wall Street Journal-owner News Corp were part of the same company until mid-2013. Mr. Murdoch also is executive chairman of News Corp.

In his letter of resignation, Mr. Ailes didn't address the sexual-harassment claims but told Mr. Murdoch, "I am proud that we have built Fox News and Fox Business channels into powerful and lucrative news organizations that inform our audience and reward our shareholders. I take particular pride in the role that I have played advancing the careers of the many women I have promoted to executive and on-air positions."

He added, "I will not allow my presence to become a distraction from the work that must be done every day to ensure that Fox News and Fox Business continue to lead our industry."

The removal of Mr. Ailes from Fox News is a stunning fall for one of the most powerful men in media and politics.

A former top adviser to Republican presidents Richard Nixon, Ronald Reagan and George H.W. Bush, Mr. Ailes launched Fox News in 1996 with Mr. Murdoch. It took only six years to topple CNN as the most-watched cable news outlet.

The channel has been criticized by many media watchdogs who say it has lowered the political discourse in the country and been tied too closely to the Republican party. But even Mr. Ailes's detractors and rivals acknowledge he created a cash cow for parent company 21st Century Fox, which has said Fox News generated around 20% of its operating profit.

21st Century Fox now faces the prospect of finding a permanent CEO.

"For Fox News, it is like losing a parent," said Jon Klein, former president of Fox News rival CNN who spent years going head-to-head against Mr. Ailes. "Roger is Fox News come to life."

Whoever takes over as Mr. Ailes's permanent successor will face some long-term challenges. Fox News has a relatively old audience -- most of its prime-time viewers are over 65 years old. Winning over the younger demographics that are most appealing to advertisers could require some significant changes in its programming and talent.

Fox News also must adapt to changing consumption habits, as viewers begin to demand more ways to access content on digital platforms. 21st Century Fox CEO James Murdoch, the elder son of Mr. Murdoch, is pushing the whole company to step up its game in digital distribution and advertising technology.

Fox isn't likely to tamper too much with Mr. Ailes's formula. "If Fox tries to recast itself it is likely to fail," said Chris Harper, a former ABC News correspondent who is now a journalism professor at Temple University.

Names mentioned as potential successors for Mr. Ailes include Bill Shine, who oversees the network's non-news and opinion content; Jay Wallace, who runs news programming; Michael Clemente, head of specials; David Rhodes, a former high-ranking Fox News executive who is now president of CBS News; New York Post Publisher Jesse Angelo; and Christopher Ruddy, the chief executive of the online conservative news website Newsmax and a former New York Post reporter.

Mr. Ailes's imprint is all over Fox News, from its on-air talent to its in-your-face production values to an us-against-them mentality that has made it the favorite channel of conservatives.

The product on air reflected him personally, media executives say. When watching audition tapes of anchors and reporters, Mr. Ailes would sometimes keep the sound off, people who worked with him say. He would then decide whether a viewer would be interested enough to turn up the volume.

Some in the media world are looking forward to changes at Fox News. William Kristol, editor of The Weekly Standard, a conservative magazine that used to be owned by Wall Street Journal parent News Corp, said while Mr. Ailes is a "TV genius" and "very shrewd about who to have on and where to sit the pretty young women and all that nonsense," his influence has been overblown after a "cult of personality" grew around him.

In Mr. Ailes's wake, Mr. Kristol hopes to see "more arguing, less bullying."

--Kristina Peterson contributed to this article.

Write to Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

July 21, 2016 18:31 ET (22:31 GMT)

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