Michael Wolff: It's James Murdoch's Fox News Now

With the ouster of Roger Ailes and now Bill O’Reilly, Rupert Murdoch's son has overthrown his own network as he moves to reinvent the family company's profit machine at great risk.

After The New York Times wrote about the sexual harassment claims leveled at Fox News anchor Bill O’Reilly and the settlements made by the company and O’Reilly himself, James Murdoch, according to 21st Century Fox sources, kept repeating with horror to his friends and executives: "This is on the front page of The New York Times!"

These sources say James Murdoch’s longtime annoyance if not disgust with Fox News became cold fury after the Times' April 1 story — even though several of the O’Reilly settlements had happened when James was CEO of the parent company. This was a similar reaction to what had followed the harassment suit by former anchor Gretchen Carlson against Fox News chief Roger Ailes in July. Every time Fox controversies spilled over into the wider world, James took it personally. “It was somehow against him," says one person close to the Murdochs.

Fox News is a business he should not be in, he had told people before, despite its major contribution to 21st Century Fox's bottom line — 20 percent of its profits came from Fox News last year, the biggest-earning division in the company. Presumably, he meant the in-your-face world of conservative cable news with its mega personalities. Indeed, James regarded many of the people at Fox News as thuggish Neanderthals and said he was embarrassed to be in the same company with them.

But, likewise, it would be hard to imagine how James could have been regarded with more contempt by many of the people at Fox News. James was rather exhibit No. 1 of the liberal elite entitlement that Fox had so profitably programmed against. “Fox [News] is an important brand, but it needs to develop, and, to some extent, be reformed,” James said when I interviewed him 10 years ago in his office as the chief executive of the Murdoch-controlled Sky TV in Britain, whose significantly less-partisan news operation he extolled as a ratings and journalistic model.

He seized his first opportunity for reform in July when, over his father Rupert's protests and his brother and co-executive Lachlan’s ambivalence, he pushed for the ouster of Ailes, the network’s founder and almost all-powerful executive. When the O’Reilly story hit the Times, he overrode his father and brother again — and, by the same method he had used with Ailes, hiring a Democratic-associated law firm, Paul Weiss, to perform a rubber-stamp investigation. (In neither the Ailes nor O’Reilly investigations were the targets of the investigation interviewed.)

It was, he proudly told friends, a right decision rather than a business decision. The billionaire scion was aligning himself, profits be damned, with a new generation of corporate responsibility. That put him quite directly at odds with his father. It would be quite inconceivable to imagine Rupert sacrificing sure profits for greater good or a better image; indeed, his company had always been a pirate company.

But that really is the larger point — in which O’Reilly and Ailes were in the end just collateral damage — it isn't his father’s company anymore.

If the expulsion of Ailes, and, even more dramatically, O’Reilly, mean anything, it means most of all that James is in charge. And, most immediately, this means that Fox News, that constant irritant in James’ view of himself as a progressive and visionary television executive, will begin to change. Virtually overnight.

In some sense, with the ouster of Ailes and now O’Reilly, James has overthrown his own network. With them there, both men possessing vast industry, institutional, political and corporate powers, it would have been impossible for the owner’s jejune son to have forced change. Now with them gone, it’s nearly a clean slate. Fox News must become something else. The almost certain instant erosion of Fox’s primetime audience, built on the spillover of O’Reilly’s long-unbeaten 8:00 hour, means the existential moment begins, practically speaking, immediately.

Rupert, 86, is said to be watching this in some disbelief, but with some pride, too. He has long believed that what many others see as his son’s arrogance and superciliousness is actually brilliance. And while Rupert may disagree with much of James' instincts and actions — quite proved inadequate in the London phone-hacking scandal for which James received much of the blame — he yet seems pleased that he would be up to taking them.

James’ dream, wherein he hopes to match his father’s accomplishments, and which he has been spinning for all who might listen for many years now, is of combining Sky News and Fox News with the vast Murdoch reach and producing some ultimate global news brand. Where Fox News is parochial and America First, the new global brand is worldly and unlimited. It will give his family’s company, once the pirate company, new meaning and new stature — a force for stability instead of upheaval. Murdoch media, in an age of populist disruption, will stand for the established world order.

Risk, in Murdochland, is good. Risk is one of Rupert's top business virtues. But where his father took risks in defiance of the respectable world, James, with some kind of head-smacking irony, is now risking the profits and influence his father created (with no small help from Ailes and O’Reilly) in pursuit of some ultimate respectability.