Ailes on Fox Business Channel And the Battle with CNBC
Below are portions of the transcript of an interview between Wall Street Journal reporter Rebecca Dana and Fox News president Roger Ailes. Mr. Ailes discusses the launch of the Fox Business Channel and the budding rivalry with CNBC.
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Wall Street Journal: The Fox Business Network launches on Oct. 15 after two years of speculation and, to use your word, "disinformation." I want to know what will viewers see.
MR. AILES: So do I. We're working on it. I'm trying to get it up on my TV so I can watch rehearsals. We're in rehearsals. I stopped down in the studio this morning. Needless to say we didn't put out a program schedule because everything we suggested we were gonna do or CNBC thought we were gonna do over the last two years they've gone ahead and done in anticipation and preemption. So we're really not saying much. There's a big audience out there. We think economic news is probably broader than what CNBC has been presenting. We intend to cover the markets and cover wall street as effectively as they do, maybe more, and add additional value.
Beyond that, there's no sense in me talking about it because this is a launch, and it's a competitive launch. We don't see them as the only competitor. We compete with everybody who has a television on in the sense that we're trying to get more viewers. So I think the CNBC Fox Business Network so-called rivalry could be overblown. It certainly has been in their minds because they've spent an enormous amount of money putting on the screen what they think I'm gonna do. I just think we're gonna launch a very credible business network and I will call a lot of audibles at the line once the play starts. I will not stand around the sidelines with a gamebook and a set of plays that I'll stick to. I'll change many things in the first year I'm sure.
WSJ: What specific things has CNBC done in anticipation of Fox Business?
MR. AILES: The first thing they did was to say well, Ailes seems to be patriotic, so we'll name it America's Business Network and take that away from Ailes.
WSJ: Did they make any programming changes?
MR. AILES: They did that last week in anticipation of our schedule which we haven't put out yet.
They reached out to talent to give it a fresher look. They're still living on shows that in many cases I oversaw the development of 12 years ago when I was there. You know, Squawk Box and Power Lunch. I even built them their set before I left. Their newsroom. Now they've changed it because they went to the new building.
They've embraced capitalism suddenly. They've put on shows: what? Capitalism's good! What a plan.
I've made them extremely uncomfortable because they used to just be uncomfortable with corporations and profits because they always only wanted to embrace capitalism on the day they negotiated their own contracts, and they've been forced now to see that it's probably a good idea over all and it creates a lot of charity and a lot of jobs for people and is a good thing. So, if nothing else, it's dragged some of them kicking and screaming toward reality.
WSJ: You helped create CNBC.
MR. AILES: I was there for six years, but it was about to be folded. And I was probably responsible for turning it around.
WSJ: How has the network changed since you left?
MR. AILES: It's gone down in ratings dramatically. I checked the numbers of the fourth calendar quarter in 95, my last year there. Their total day is down 5 percent and their demographic is down 15 percent. Prime time is down 61 percent and prime time demo is down 53 percent. So, it's changed quite a bit since I was there.
WSJ: Has the perspective of the network changed?
MR. AILES: They are, let's be honest, there aren't a lot of. They probably don't reflect the business community in terms of their own economic and political views in many cases. Not that they should, but they should be able to report on it accurately and I think that they've you know, look, they got burned. They rode the bubble up. They flogged the bubble. They got burned. They got tied to a sort of day traders and good market information and it blew up on them and they didn't know quite how to scramble out of that. And rather than come up with a new way of covering it, they blamed the economy and the bubble and all of that for their woes.
I mean, there are some very good individual reporters, anchors and talent at CNBC. I found that when I went there. Everybody thought I would go in there and fire everybody and clean house. It turned out there were a lot of good people there. They lacked a mission and a focus and leadership. Oftentimes that's the case. I think they've improved. They're better. They've certainly had two years to figure out what we might do.
They've had The Wall Street Journal for seven, eight years. So I'm expecting them to come out of the gate the day we launch with some brilliant programming based on The Wall Street Journal. They've been holding it in reserve I think and they're gonna flood me with a tsunami of brilliant ideas and programming on Day One.
They have a tremendous advantage. They're in 90 million homes. They have a 17 year head start. I put them on track 12 years ago. They've got GE. They've got all the money they need. They've got a brand new building. And we've announced when we're gonna come with our programming in our 30 million little pathetic homes. If they can't kill us in the crib now, it's only gonna get worse for them day to day.
WSJ: How will you surmount that?
MR. AILES: Well. If you study history, the victories did not always go to the people with the great resources. Stonewall Jackson seemed to be undermanned in every campaign and won. McClelland had plenty of resources in every fight and lost. That isn't always what matters. It's, well, I'm not gonna tell them what it is.
They're winning. Because they're a monopoly. They're winning the same way CNN was winning when we came on the scene with Fox News. CNN was winning. It was a world-wide brand. They had no competition. That's how you win. Once you have competition it's a different kind of fight. It's like putting one football team on the field. You know what? They'll win. They can run up and down the field all day, score 100 touchdowns in four quarters. As soon as you put somebody out there to tackle them and run the ball themselves, life changes. So we'll see how they adapt.
WSJ: What are the particular strengths of your football team?
MR. AILES: Good people. In the end, almost everything I do is related to my ability to hire good people. I don't take much of the credit myself. I think I have a good eye. I think I have a good eye for talent. I think I'm smart enough to figure out what the mission is and achieve it. I achieve it by hiring good people, and I'm very confident in the management team. Very confident in the on-air people. That's the whole secret to everything, it's having people who love to work where they're working and want to win. We're getting a lot of resumes from people who don't love to work where they're working.
BRIAN LEWIS (Mr. Ailes's communications director): Can I interrupt one second? Jeff Zucker was on Squawk Box.
MR. AILES: When?
MR. LEWIS: This morning.
MR. AILES: Good. He has nothing else to do.
MR. LEWIS: This is, well, you can read it yourself (quoting): "News Corp is an intense competitor but I could not feel more confident about CNBC. I don't think in the 20 years we've been around that CNBC has been in a stronger position. We've made a ton of changes in the last 2 years. Some of them have been on this program, Squawk Box, and I don't think this program has ever been in stronger shape. We welcome competition but we're not scared by it."
MR. AILES: That's the right thing to say. I think they have been in better shape. They were in better shape at one time. Somebody should have prepped him for that interview. They're competitors. I know Jeff, in the old days when I was on the Today Show, he was a producer. We all know each other in this business. We all know that – and everybody thinks they have everybody else's playbook, and they don't necessarily.
It's not unlike – I use the Civil War analogy because it's relevant here. In the Civil War a lot of those young men came out of West Point in the class of '46 and went to Mexico and fought together. General Grant and General Lee fought on the same side. General Longstreet, who was Lee's number two, was best man at Grant's wedding. They all knew each other from class. They knew who could ride a horse, who could draw a battlefield, who could command troops in the field. They knew how things worked. Everybody in television knows each other and on any given day some people play better than others, some people get lucky, whatever. What that does is it makes the margin of success a very narrow field.
We're going into a 90-million-home competitor with a 17-year head start who has spent the last two years making decisions to get ready for us. You know, the Germans had the high ground at Normandy and you know what? Our guys did alright. I just figure, you know, the fight will begin. I feel confident our folks are ready for it.
We're not particularly targeting CNBC. CNBC does a narrow kind of programming. Unless they do what they could do which is jump us with a whole lot of Wall Street Journal stuff, programming. If they do that, the good stuff will eventually become mine. Cause they're my R and D department.
WSJ: What will become of the WSJ-CNBC deal?
MR. AILES: Unclear. I think that's being sorted out right now. Clearly we're being blocked from using it, but they've enforced that so strongly in the last seven years that they haven't even used it. So, it must be a real tough enforcement.
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WSJ: Why did it take two years and two weeks?
MR. AILES: I think the first year there was feasibility studies looking at it. I didn't want to launch until we had 30 million homes. I made that very clear to him, that I thought that was a mistake, and he respected that. And we fought our way through. We had to do the renegotiation of Fox News channel, which was our top priority, and we didn't want to get that muddled up with – we'll give you a business channel but you can't get your price for Fox News, because Fox News was such a valuable asset. So we had to separate that.
Rupert is, well, he's probably the best entrepreneur and media visionary in history and has the strongest company because of it. He sees things other people don't see and tells you to go take the hill.
WSJ: In August, Mr. Murdoch said he expects the Fox Business Network to surpass CNBC's estimated $4 billion value "in short order." How long do you think it will take to do that, and how will you do it?
MR. AILES: I never predict offensive goals. I think that was Israel's problem in Lebanon. Look, there are too many variables: is there gonna be a recession? Will that affect the ratings on either channel? Will CNBC suddenly get better? Will something work out with The Wall Street Journal? Will we be better than expected? Is it gonna rain? There are just too many variables. So you don't go out there and say: I'm gonna do this.
I believe we will beat them, and I believe the asset value of Fox Business Network will grow relatively rapidly. But people have to remember that because Fox News right now is seen as a success and that sets the expectation level pretty high, but they forget that for the first two years, we struggled with Fox News. We couldn't get clearance in NYC with Time Warner, we weren't on analog, we didn't have any hit shows. CNN had it all. They had all the world-wide news- gathering capability. We had no video news capabilities, even at our station level really.
We had to build our infrastructure. And it took us four years to tie CNN. I would not be surprised if the fox news model were replicated here, and that certainly would be a goal.
As it turned out, the Fox News Channel was one of the greatest success stories in the history of cable television. Maybe the greatest because, you know, there are other channels that are done very well but they didn't have – MTV at that time had no competition, or the History Channel, or any of the great channels. We had to come into a generic product: news. With people ahead of us in resources, time and distribution and take down the leaders from behind. I'm not sure that's ever been done. I think doing it in business news will be difficult, but possible.
WSJ: Is it more difficult than with general news?
MR. AILES: Well, there's a broader audience with general news. It's probably easier to market general news, and there are more events that drive ratings in general news. You know, 9/11 was huge. CNN made its bones back in the Gulf War when they were out there by themselves and suddenly we were getting an inside look at warfare on a cable channel. So, major elections and you know major events, terrorist attack in Europe or whatever. Events often drive general news. The events that drive business news tend to be either the stock market really hit a record today or we're headed into a recession, we really got a problem.
WSJ: Or the sub-prime collapse.
MR. AILES: Yeah, the sub-prime thing, which nobody understood. You go out on the street and say to somebody, how's your sub-prime? They think you're talking dirty to them. They don't know what you're saying.
You gotta explain all that as you go. It's a little more difficult although the education level and income level for business news is quite high, that's why the advertisers have always been there, and we believe the advertiser base is there, and we're finding real advertiser acceptance in the market for Fox Business Channel already. We've already made sales based on not explaining our programming.
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WSJ: One of the reasons CNBC is so lucrative for General Electric is that, although the network has a small audience, it is an extremely affluent one, and CNBC is able to charge advertisers very high rates. If Fox Business Network targets a more mainstream audience, how will it make money?
MR. AILES: With high CPMs. Fox News has a very high income audience, and I think that any business channel automatically draws that. When I say Main Street, most of the jobs in America are in small business. That doesn't mean they're poor; they're just in small business. What I'm suggesting there is we're not gonna reach for a lower financial demographic. I don't think that happens. I think automatically if you say business network you'll have a higher income, higher demographic, so I think we'll be quite competitive on that.
WSJ: It seems like the sensibility you're striving for with the network is embodied by CNBC's Jim Cramer. Would you like to have him on your air?
MR. AILES: He used to work for me. I like Jim. Jim's like driving down the highway and watching the wreck across the guardrail. You never know what he's gonna do, which makes him interesting. Jim understands that being surprising as a talent, people will watch. That is not what we're aspiring to. Jim has an encyclopedic knowledge of the stock market. Anybody who sits with Jim, whether they like him or don't like him, know that he's a) smart and b) studies this stuff and knows what he's talking about.
His presentational style is not what I'd call what I'm reaching for. It's entertaining at times. At times it's annoying, you know. And anybody that has children understands that when they run around and break things at dinnertime it's, like, annoying. It's an acquired taste. But most people get mad and whack their kids on the butt. And in fact, that show would be better if someone just ran in from off camera sometimes and whacked him on the butt and said, let's get back to business here.
But Jim's an entertaining guy, and I like Jim, but he's not what we're aspiring to.
WSJ: Is there anyone from CNBC you'd like to hire?
MR. AILES: Look, I'm the one who put Maria Bartiromo on the air. She's a fine talent. This new woman that they're overusing because she's on now 15 hours a day, Erin Burnett, is a good talent. But she's gonna age. She'll only last another year the way they're working her. Like Anderson Cooper at CNN. They've been figuring out how to replace Larry King, so they've been flogging poor Anderson. He's actually a pretty good journalist and a good guy.
I think sometimes the management of talent misuses talent. Erin Burnett will be – look, she'll look 75 in the next six months if they keep working her as hard as they're working her. So, I hope, at some point she steps up and says I need water, I need a little break here.
WSJ: Are there gonna be any Bill O'Reilly's on the Fox Business Network?
MR. AILES: There will be, but I won't name them today.
WSJ: Why not?
MR. AILES: Because I'm not crazy. I'm not gonna put pressure on the talent. I'm not gonna put pressure on their colleagues.
WSJ: Will there be Bill O'Reilly-like stars on Fox Business Network?
MR. AILES: Who's like Bill O'Reilly? If there was somebody like Bill O'Reilly, they'd be out there getting ratings. No matter how much the mainstream press dumps on him, the guy constantly delivers an interesting show. He's unique. What I look for more are unique – Shep Smith. Shep Smith's probably the best general news anchor in America. Brit Hume! What I think I find are people who have some unique ability they bring to the screen. I set up a structure so they can do that every day. And I encourage and support their talent. Will I find unique talent, will unique talent break through? Yes. It's all in the developmental stage for me now because I have to decide who's gonna be the breakthrough talent and how are we gonna nurture them. And I'm in the process of doing that as we speak.
WSJ: How important is the Fox Business Web site?
MR. AILES: It's extremely important. It so important that we have Ray Hennessy of Dow Jones heading that up for us. We've hired some incredibly skilled people. And I can't say in five years, is the television or the Web site going to be more valuable? They're both growing. We had a -- Just in ad sales on foxnews.com, our percentage of growth was more than 20 percent higher than the national average in terms of percentage of ad growth. We believe we'll be able to accomplish that on foxbusiness.com.
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WSJ: Anything else you can tell me about what's going to be on the air of the Fox Business Network?
MR. AILES: No. I mean, we're gonna present business news. I think the people we have presenting it will be interesting and good at doing it. I think we will present information in a more clear manner, we'll have -- I think, look, the truth is, by week 2, they'll be copying what we do. That's what happened with Fox News. They'll look at our screen and say we need one of those! Aww god, we need -- that bug's gotta be bigger. Ohhh, let's put the Dow over on the left, let's put it on the left, they got it on the right. They'll twist themselves up in their underwear for a couple of weeks trying to match what we do. And there'll be this little dance going on until we get into 50 or 60 million homes and hopefully people will see, oh, geez, two choices here, they'll choose us. That's what I'm hoping for, and I believe we'll achieve. Meanwhile, I think they're going to get twisted up in their shorts for awhile.
They already are. We haven't even launched and they're making crazy statements about it. This is ready fire aim over there. Why don't you wait till the guy shows up on the battlefield before you start shooting at him?