The Elephant in the Green Room

Fox's competition with CNN for pundits.

Left: Building an opposition, Ailes hired Karl Rove even before Obama was elected. Right: When it became clear that Newt Gingrich would declare his presidential ambitions, Ailes pushed him out.   (Photo: Newscom (left); Ethan Miller/Getty Images (right))

It was, more than anything, a business decision. “It would be easy to look at Fox and think it’s conservative because Rupert and Roger are conservative and they program it the way they like. And to a degree, that’s true. But it’s also a business,” a person close to Ailes explained. “And the way the business works is, they control conservative commentary the way ESPN controls the market for sports rights. If you have a league, you have a meeting with ESPN, you find out how much they’re willing to pay, and then everyone else agrees to pay the same amount if they want it … It’s sort of the same at Fox. I was surprised at some of what was being paid until I processed it that way. If you’re ABC and you don’t have Newt Gingrich on a particular morning, you can put someone else on. But if you’re Fox, and Newt is moving and talking today, you got to have him. Otherwise, your people are like, ‘Where’s Newt? Why isn’t he on my channel?’ ”

Fox also had to compete with CNN for pundits. In early 2008, then–CNN-U.S. president Jon Klein invited Mike Huckabee to breakfast at the Time Warner Center. Klein sold Huckabee on the benefits of CNN. “If you believe what you’re saying, you should try and convince the middle,” Klein told him. It was the same pitch he made later to Karl Rove and to Weekly Standard writer Stephen Hayes. All three turned down Klein and signed with Fox.

Ailes was also intensely interested in Sarah Palin. In September 2008, he secretly met Palin during her swing through New York, when she toured the U.N. and had her photo op with Henry Kissinger. That afternoon, Shushannah Walshe, a young Fox producer who was covering Palin’s campaign for the network, had gone on-air and criticized McCain’s staff, who had prevented reporters from asking Palin questions during her U.N. visit. “There’s not one chance that Governor Palin would have to answer a question,” Walshe said on-camera. “They’re eliminating even the chance of any kind of interaction with the candidate—it’s just unprecedented.”

“Ailes doesn’t want Fox to be seen as a front of the Republican party.”

Ailes didn’t know Walshe, but he was furious when he heard her comments. Liberal media outlets like the Huffington Post were seizing on her statement and made it appear that Fox was turning on Palin. Ailes called Refet Kaplan, a senior Fox executive, and demanded Walshe be taken off the air. “It’s not fair-and-­balanced coverage,” Kaplan later told Walshe. Walshe was allowed to continue covering Palin but was barred from future on-air appearances. She later quit Fox to co-write a book about Palin.

After the campaign, Ailes stayed in touch with Palin. In September 2009, two months after Palin resigned the Alaska governorship, Ailes arranged for her to fly on News Corp.’s private Citation jet when Palin needed to travel from San Diego to New York to meet with her editors at HarperCollins. That fall, Palin’s agent, Bob Barnett, started shopping her to the news networks. CNN told Barnett they weren’t interested. Ailes put his programming chief Bill Shine in charge of recruiting Palin. Shine negotiated with Barnett and was able to close the deal. In January 2010, Fox announced Palin had signed a three-year contract worth $1 million a year to appear as a contributor on the network and to host prime-time specials. Palin made her Fox debut on Bill O’Reilly’s show. A week later, she appeared on Beck’s program.

Beck had been hired to solve a problem that had vexed Ailes for years: The five-o’clock hour continually failed to attract an audience, which delivered a weak lead-in to the shows that followed. Fox executives dubbed the slot the “black hole.” Ailes had unsuccessfully cycled through a slew of anchors, from John Gibson to Laura ­Ingraham. Ingraham’s turn was especially rocky. She would scream so loudly at her staff off-camera that producers in the newsroom would turn on the monitors for fun and watch the unfolding drama.

Beck’s debut was the day before Obama’s inauguration. Within a month, Beck became a phenomenon. He doubled the time slot’s viewership, providing a powerful boost that carried into the prime-time hours, when Fox earns most of its advertising revenue. But from the beginning, Beck had a different relationship to Fox than did Ailes’s other talent. Beck had a coterie of powerful advisers and PR reps behind him. He was a best-selling author and had a thriving radio franchise. He didn’t submit to Fox, which would later cause him problems.

Fox’s record ratings during the beginning of Obama’s presidency quickly put an end to Ailes’s fears that he would be bad for business. The network’s audience hit stratospheric levels as the tea-party rebellion provided a powerful story line that ran through Fox’s coverage. Sometimes Fox personalities took an active role in building the movement, something that Ailes was careful to check if it became too overt. In April 2010, Fox barred Hannity from broadcasting his show at a Cincinnati tea-party rally. “There would not have been a tea party without Fox,” Sal Russo, a former Reagan gubernatorial aide and the founder of the national Tea Party Express tour, told me.

Next: "There is Roger, and there is everyone else.”