NEW YORK (CBSNewYork/AP) -- Roger Ailes is out at Fox News.
After building a cable news behemoth for the past 20 years, 21st Century Fox announced Thursday the 76-year-old Fox News chairman and CEO has resigned following a sexual harassment lawsuit from former Fox News anchor Gretchen Carlson.
Rupert Murdoch will assume the role as acting chairman and CEO of Fox News Channel and Fox Business Network.
"Roger Ailes has made a remarkable contribution to our company and our country. Roger shared my vision of a great and independent television organization and executed it brilliantly over 20 great years," Murdoch said in a statement. "Fox News has given voice to those who were ignored by the traditional networks and has been one of the great commercial success stories of modern media."
Murdoch continued, "It is always difficult to create a channel or a publication from the ground up and against seemingly entrenched monopolies. To lead a flourishing news channel, and to build Fox Business, Roger has defied the odds. His grasp of policy and his ability to make profoundly important issues accessible to a broader audience stand in stark contrast to the self-serving elitism that characterizes far too much of the media. I am personally committed to ensuring that Fox News remains a distinctive, powerful voice. Our nation needs a robust Fox News to resonate from every corner of the country."
In a letter to Murdoch, Ailes that he was "proud" of what they built at Fox News, and said he will not allow himself to become a "distraction" to the network.
"Having spent 20 years building this historic business, 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. I am confident that everyone at Fox News and Fox Business will continue as the standard setters that they are, and that the businesses are well positioned for even greater success in the future," Ailes wrote.
Cutting short a vacation, the 85-year-old Murdoch addressed Fox News employees in New York on Thursday. Details were not given on the settlement agreement for a contract that was supposed to run through 2018, but Ailes is expected to get a payment of at least $40 million.
Ailes will have no formal role in the company, but is expected to serve as an informal adviser to Murdoch, said a person familiar with the agreement who spoke on condition of anonymity because it is a personnel matter.
The apparent final nail in the coffin for Ailes' tenure came following a New York Magazine report that Fox News anchor Megyn Kelly told investigators working for Fox News Channel parent 21st Century Fox that Ailes had sexually harassed her when she was a reporter at Fox 10 years ago.
Earlier this month, Carlson has filed a lawsuit against Ailes, claiming he forced her out following a meeting where he told her that "you and I should have had a sexual relationship a long time ago." The contract of Carlson, who said there was an atmosphere of harassment at Fox, was not renewed when it ended last month.
Within two weeks of the court filing, Carlson's lawyers also said more than 20 women had contacted the firm with stories of alleged harassment by Ailes either against themselves or someone they knew. Two came forward publicly.
In a statement, Carlson's attorneys credited Carlson's "extraordinary courage" with causing "a seismic shift in the media world."
Ailes has denied the allegations.
Before the charges, Fox's sheer success had insulated Ailes despite some previous scrapes with the Murdoch sons over who he would report to. Fox News Channel is the parent company's single most important property, said Pivotal Research Group analyst Brian Wieser, with some estimates that it accounted for nearly a quarter of the company's profits.
Ailes was a prominent Republican media consultant who later ran CNBC before Murdoch asked him to create a cable news network to compete with CNN at the same time MSNBC was starting. Ailes' slogans, "fair and balanced" and "we report, you decide," appealed to an audience that believed mainstream outlets didn't live up to those promises.
"He was ahead of his time in recognizing that dividing, not uniting, an audience would be the key to commercial success in the 21st Century cable news business," said Matt Sienkiewicz, communications professor at Boston College. Ailes blew apart the notion that public affairs programming should target a broad audience with civil debates, he said.
Ailes hired a combative broadcast journeyman in Bill O'Reilly and turned him into the star of an opinionated prime-time lineup. He directed news coverage and emphasized issues like the so-called "war on Christmas" or the Benghazi investigation that otherwise got little attention. Republican politicians considered Fox the first stop for reaching their intended audience, and they learned to talk tough. "We're not going to be defensive about anything," Ailes said at the network's launch.
"It is always difficult to create a channel or a publication from the ground up and against seemingly entrenched monopolies," Murdoch said on Thursday. "(Ailes') grasp of policy and his ability to make profoundly important issues accessible to a broader audience stand in stark contrast to the self-serving elitism that characterizes far too much of the media."
He was also a showman. Fox had flashier graphics, brighter colors and a vitality its staid rivals lacked. The daytime show "Outnumbered" is a classic Ailes concept: four women in dresses, their legs prominently displayed, debating issues with a single male panelist.
In 2011, Ailes told The Associated Press that he hired Sarah Palin as an analyst -- a decision that later gave him headaches -- "because she was hot and got ratings."
Ailes demanded and usually received loyalty from a team that knew there could be hell to pay otherwise. When Paula Zahn left Fox for a job at CNN, Ailes retaliated by saying that a dead raccoon could have done her show and gotten the same ratings.
Critics scoffed at Ailes' promise that he'd lift Fox to first place. By 2002, he did, and Fox hasn't looked back.
Ailes groomed no obvious successors, and has been so identified with the brand that many have a hard time envisioning the network without him. Will his successor lack Ailes' political instincts, or tone down aggressive opinion? That could make Fox more broadly palatable, but also risks alienating the audience that has grown to love Fox and made it such a success.
Murdoch said Fox managers Bill Shine, Jay Wallace and Mark Kranz will assist him in day-to-day management of the network. Long-term, CBS News President David Rhodes is well-regarded and worked at Fox in the past. The Murdoch sons may also seek to make a statement by reaching outside the current Fox News culture.
"Whoever invented the Coca-Cola formula has long since passed this Earth, but the brand keeps selling because people like the taste," said Mark Feldstein, a journalism professor at the University of Maryland. "I think that's how it's going to be with Roger Ailes. He invented this winning formula and all you have to do is not mess with it too much and it will continue to mint money for you."
Documentary filmmaker Robert Greenwald, who made 2004's "Outfoxed: Rupert Murdoch's War on Journalism," said he hopes the younger Murdochs will take this moment to change the network's philosophy.
"I certainly think that some of the hatred and anger and racism and fear that we're seeing in this election has clearly and absolutely been stoked and stroked by Fox News," he said. "Once he's gone, I hope the younger Murdochs will attempt to take an approach in which it does become a news outlet rather than a propaganda outlet."
While ratings are soaring in an election year, a newly aggressive CNN is making inroads among younger viewers that advertisers seek. Fox faces the challenge of trying to inject youth into an audience that is among the oldest in television, and viewership is expected to inevitably fall without the excitement of a campaign.
The network has also been remarkably stable, with personalities bonded from loyalty to Ailes. O'Reilly has recently mused about retirement, and he and Sean Hannity reportedly have contract provisions that would allow them to leave if Ailes does. Kelly's contract ends later this year and it would be a huge blow to the network if she left.
(TM and © Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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