Roger Ailes Fights Back: CNN 'Out of News Business'; Megyn Kelly Critics 'Jealous'; Dismisses New Book (Q&A)

"She was joking. She’s talking about Santa Claus, for Christ’s sake," Ailes says of the media furor around his 9 p.m. anchor insisting St. Nicholas is white. "But the people who are jealous of her, who want to bring down or hurt Fox News, see an opportunity. If they have to beat up somebody as talented as Megyn Kelly on Santa Claus, they’re pathetic."

Fox's news czar tells THR about his goal to launch a new network with Bill O'Reilly, the real reason Alec Baldwin was fired and why Jeff Zucker's strategy is no cause for concern: "I guess he's going to do whales a lot. If I were Discovery, I'd be worried."

A version of this story first appeared in the Jan. 17 issue of The Hollywood Reporter magazine.

Roger Ailes, like his Fox News Channel, is as divisive as he is successful. The chairman and CEO of the de facto victor in cable news' ratings war, whose colorful professional past includes a tenure as a talk-show producer (The Mike Douglas Show) and decades as a political consultant (presidential campaigns for Richard Nixon, Ronald Reagan and George H.W. Bush), built his 21st Century Fox network into Rupert Murdoch's most profitable property. Fox News' subscription revenue continues to climb, rising to 94 cents a month per customer in 2013 for an estimated $1.1 billion -- making FNC No. 6 among cable networks, according to SNL Kagan. Competitors CNN and MSNBC have been forced to duke it out for a distant second place for the past 13 years, something Ailes credits to his openness to change. But change isn't what FNC is known for -- at least not until October, when Ailes raised eyebrows by overhauling his primetime lineup for the first time in a decade. The pairing of conservative-leaning Bill O'Reilly and Sean Hannity was split up by the addition of Megyn Kelly in an effort to stem the challenges of an aging TV audience.

At 73, the Ohio native shows no interest in retiring. Outside his day-to-day running of FNC, sister channel Fox Business Network and the Fox Television Stations Group, he has a weekend residence in Garrison, N.Y., with wife Elizabeth and 14-year-old son Zachary. A fervent newshound, he bought local paper Putnam County News and Recorder in 2009. Ailes remained characteristically silent throughout months of rumors leading up to the FNC revamp but agreed to a sit-down with THR in December, speaking in his modestly attired office on the second floor of the News Corp. building.

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Though he declined to comment on the split from longtime PR exec Brian Lewis, he did briefly explain why he opted to not participate in an unauthorized biography by Gabriel Sherman. Warm and droll for a man often vilified by Hollywood liberals, he also opened up about his competition, recent talent acquisitions (Maria Bartiromo, Elisabeth Hasselbeck), the staying power of the Tea Party and his desire to launch a new history channel with O'Reilly.

How long had you been planning the changes to the primetime block?

I'd been thinking about it for a year. CNN and MSNBC, our primary competitors, are trying to figure out how to beat us. There are some good, smart people at those networks, and even occasionally a blind pig finds an acorn. I never want to get caught with not expecting something. And I believed, in some cases, we needed to freshen up a little bit. Audiences are shifting. Platforms are shifting. Ages are shifting. It's better to be in charge of change than to have to react to change.

Megyn Kelly, a ratings boon to primetime, has been a lightning rod since moving to 9 p.m. What do you think of the attention she got for saying, "For all you kids watching at home, Santa just is white"?

I don't like [the uproar]. She was joking. She's talking about Santa Claus, for Christ's sake. But the people who are jealous of her, who want to bring down or hurt Fox News, see an opportunity. If they have to beat up somebody as talented as Megyn Kelly on Santa Claus, they're pathetic.

Other people in cable news have said things in the past few months that cost them their jobs. What did you think of MSNBC's Alec Baldwin experiment?

They dodged a bullet. They put him in there, and they would've had to fire him for no ratings. He gave them a reason to get fired. He appears to be angry and explosive, so that was essentially bound to happen. If somebody wants to book Alec Baldwin on one of our shows, and he wants to come on and talk to our people and say what he wants, I don't care. We would question him on his choice of words. He's sort of a ready-fire-aim kind of guy as opposed to ready-aim-fire.

Among your competitors, is there any talent you particularly admire?

I think Rachel Maddow has been a surprise to a lot of people. She wouldn't really work at this network because she wouldn't even come in the door, but on a personal level, I like her. I don't want to hurt her career, so I won't say we get along, but I've had dialogue with her, and she's very smart. She has adapted well to the television medium.

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What do you think of Jeff Zucker saying CNN is now focused on making shows and moving away from newscasts?

I'm actually thrilled. MSNBC has [already] announced they're out of the news business. They have several different hosts, but it's always the same show: Republicans are no good. The NBC News people won't get caught dead on MSNBC. They could have a traffic accident in front of the window, and they wouldn't cover it. For CNN to also throw in the towel and announce they're out of the news business is quite interesting. That means Fox has won the cable news wars. [Zucker] had a big hit with a whale one night [the documentary Blackfish]. I guess he's going to do whales a lot. If I were Discovery, I'd be worried.

Fox News always has made a distinction between the news and more opinionated programming. Does Megyn's move change the way those are defined?

I think our [viewers] are adults. They know the difference between news and programming. I grew up in the era when Dan Rather hated Richard Nixon. He was a newsman, but you knew what his opinion was. Walter Cronkite came back from Vietnam and offered his opinion on the war. I know what the news shows are, and I know what the programming shows are, and there's a difference.

When you wake up first thing in the morning, what do you read?

I look at four New York newspapers: The Wall Street Journal, The New York Times, the [New York] Post and the Daily News. On my cellphone, I look at Drudge [Report] because he's the best aggregator going on.

Why do you have TVs running every network in your office?

Look at those six screens. I always bring my producers in and say: "Turn away from there. Now look back and tell me where your eye goes." They tell me. If it doesn't go to my screen, that's how you're going to get fired.

How long were you looking at bringing Maria Bartiromo to Fox Business Network?

We've had that conversation for the last five years, off and on, but we don't see each other very often. I finally decided that she'd be terrific in our lineup, and it happened to fit her timing and her contract. And she'll be seen on Fox News. She's a star, and she'll do some fill-in anchoring.

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What are the growth expectations for Fox Business?

I'm not sure business television has adapted to all the changes that have been presented to it nor the economic conditions of the country. Our lineup of top business talent is like the New York Yankees in their heyday. That's going to work for us as the economy turns and people get a little more disinterested in socialism and a little more interested in capitalism. Business news has traditionally looked at yesterday … a bunch of old people looking at numbers. And the real business news is going to be what happens tomorrow.

Is it hard for you to deal with change sometimes?

All change is hard for humans to deal with. The advertisers say 25 to 54 is the demo. … Well, I invented Fox News when I was 56, so I was already outside the demo the day I started here.

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What's your relationship like with Rupert Murdoch?

It's very good. He's not in town today, but the door could open. He wanders in and ruins my schedule and just wants to talk. He calls once every day or two usually just to gossip and catch up on the news. We've hit our numbers for 16 straight years. I don't have a lot of issues related to the business side because I tend to deliver what I promise to deliver. I think that's the way it is with Rupert. If you deliver money, you do fine.

Has your job changed at all since the split with News Corp?

No, not really. The print stuff sort of went over into a new company, [but] I had a meeting with Gerry Baker of The Wall Street Journal. We are working on some ideas for the business channel. We come to work in the same offices every day, and I guess they do, too. It hasn't changed anything that I have to do.

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How long will Bill O'Reilly continue his show?

You can never tell. If you go back pretty far to Steve Allen and Jack Paar, they had a very short life span. Mike Wallace did it for 40 years. It's a very individual thing. I think Bill can last as long as he wants because he's driven by organic energy. He likes money, but he's not doing it for the money. He probably likes power, but he's not doing it for the power. He's driven by things that he sees that are not right from his point of view. If his ratings were to go way down, or if he thought he'd burned out or didn't have anything else to say, those are reasons to retire, but he is still killing everybody in the ratings.

Do you have any interest to work with Bill on other projects, like the assassination histories he's done with National Geographic?

I do. I would like News Corp to form a history channel and let Bill work with me. I'd run it for him because I'd like history done correctly for a change. They're not teaching the kids the real stuff. I think there is room for another channel, and I would love to do it.

Why bring back Sarah Palin just a few months after not renewing her contract?

The only two people I knew who got worse press than her were Richard Nixon and George W. Bush -- some of it unfairly, much of it unfair to her family. She's recognizable, she's attractive, and she still has the message of stop raising taxes. The Tea Party started as a group that [the government] could make go home to bake meatloaf at any point in the last three years by simply doing two things: Stop raising taxes and stop stealing their money. Congress can't stop spending money. I'm not a defender of everything she says. I don't hear everything she says. But I know she represents a certain group of people who rose up against their own party, which you rarely see. I probably hired her back, if you really want to get to the bottom of it, to give her a chance to say her piece and piss off the people that wanted her dead.

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Did you approach Elisabeth Hasselbeck with any opportunities besides joining Fox & Friends?

It was always Fox & Friends only because it seemed so natural. Getting the right comfort level for the on-air talent is critical in the morning. She was in a tough spot on The View. She always came to play and always had a smile on her face, and that's critical in morning television. I knew she would work well here. It was a matter of just convincing her to come over.

Is there room for cable news to be a bigger player in the morning-show wars with Today and Good Morning America?

I think that Fox & Friends' audience is going to increase. That franchise in the morning is very important to any television operation because they make money. It's basically three people in three chairs. The rest of it is, how good is your producer?

Is building Fox's web presence a priority?

I was a little slow to it, I think, because it wasn't my natural medium. I probably should have spent money six months or a year earlier to bring in more people. It's a very intense business. You don't get as much money, so you don't make as much money, so you can't spend as much money.

What has having a teenager at home taught you about how younger people are consuming media?

The television set means nothing to him, other than he can get Netflix and a movie he wants. … A major sporting event, maybe, but there's no, "It's 8 o'clock -- time to watch something!" And that generation has taught themselves to watch movies on a telephone. I find that annoying and too small.

Does the move away from TV concern you?

The real concern I have is the fragmentation. Twitter is a wonderful device. And I call it a device, but there are people that are addicted to it now. That's not good. You're really not very interesting using only so many letters. If you're in the four-letter category for Scrabble, it's a long damn game. I don't have the problem with it that a lot of older people do, but I worry that digital media has become too much of their life.

You’re the subject of an unauthorized book, for which you declined to participate. Are you doing anything to counteract any negative elements?

Bette Davis said -- I think it was Bette Davis -- "What other people think of me is none of my business." Attacking me and Fox News is nothing new -- it's a cottage industry. What's new is that Random House refused to fact check the content with me or Fox News; that tells you everything you need to know about this book and its agenda.

Being 20 years out from the political career, do you ever miss it?

No. Nobody asked me, but I hated it then. I got into it by a fluke. I was good at it. I made a lot of money at it. But you know what happens when you have staff? You feel guilty. I ended up staying in the business years beyond what I wanted because I didn't want to fire anybody. One night, I was snowed in at O'Hare airport [in Chicago] with a soldier and an old guy pushing a broom. My whole staff was home in bed, and I was stuck at the airport for two days. I just decided to hell with it.

Do you think about retiring?

Yeah, every 15 minutes. I've never wanted my kid faced with the idea of, "Who's the fat guy sitting in the living room? What the hell is he doing?" I figure I might as well go to work so he can say his dad works. I will someday. But I won't quit stirring things up. I saw [CBS Corp. chairman and CEO Leslie] Moonves one night in a restaurant with my old friend [former Sirius XM Radio CEO] Mel Karmazin. They came over to my table and said: "We got a pool on you, Ailes. It's up to a million dollars. Everybody wants to know when you're going to die or retire because you're killing us." I said, "As long as I'm doing that, I'm going to keep working, boys." I have a good relationship with all those guys, but they would like to see me retire.