21st Century Fox: Bill O'Reilly Won't Return to Fox News Channel -- 3rd Update

By Joe Flint Features Dow Jones Newswires

Fox News is parting ways with Bill O'Reilly in the wake of a sexual-harassment scandal, bringing an end to the combative host's two-decade run that drew millions of loyal viewers and helped build the network's political influence.

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The decision to cut ties with Mr. O'Reilly, a staple of the Fox News Channel since its launch in 1996, is a sea change for both the network and its parent company 21st Century Fox. Mr. O'Reilly's take-no-prisoners approach to hosting and glee in belittling those he disagreed with became the template for much of the network's programming strategy.

Mr. O'Reilly is being swept out of Fox News after revelations that he and the company paid settlements to women who accused him of sexual harassment and verbal abuse. A New York Times report detailing the $13 million paid to five women who worked at or appeared on his show led to dozens of advertisers boycotting his program and brought a slew of negative attention to the company.

While the company initially defended him, the emergence of more complaints against Mr. O'Reilly during an internal probe by law firm Paul Weiss, Rifkind, Wharton & Garrison LLP became the deciding factor in the Murdoch family's decision, according to a person familiar with the matter.

"After a thorough and careful review of the allegations, the company and Bill O'Reilly have agreed that Bill O'Reilly will not be returning to the Fox News Channel," 21st Century Fox said in a statement Wednesday.

Mr. O'Reilly, who announced on the air last week that he was taking a vacation until April 24, cut his Italy trip short amid the firestorm and returned to New York on Wednesday. He has consistently denied any wrongdoing, saying he only paid settlements to put controversies to rest "to spare" his children.

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"It is tremendously disheartening that we part ways due to completely unfounded claims," Mr. O'Reilly said in a statement. "But that is the unfortunate reality many of us in the public eye must live with today. I will always look back on my time at Fox with great pride in the unprecedented success we achieved and with my deepest gratitude to all my dedicated viewers."

To plug the huge hole in the network's prime-time lineup, Fox News announced it is moving Tucker Carlson up one hour into Mr. O'Reilly's 8 p.m. time slot and putting "The Five" on at 9 p.m., starting Monday.

21st Century Fox Co-Chairman Rupert Murdoch and his sons, Co-Chairman Lachlan and Chief Executive James, praised Mr. O'Reilly as "one of the most accomplished TV personalities in the history of cable news" and expressed confidence that the network will continue to be a powerhouse. "Lastly, and most importantly, we want to underscore our consistent commitment to fostering a work environment built on the values of trust and respect," the Murdochs wrote in the memo. 21st Century Fox and News Corp, parent company of The Wall Street Journal, share common ownership.

Mr. O'Reilly, 67 years old, had recently renewed his contract with Fox News at a salary of more than $20 million annually, people familiar with the matter said.

The new four-year contract contained language that gave the company the ability to remove Mr. O'Reilly should any red flags or additional harassment complaints emerge, the people said. That turned out to be the case after the law firm Paul Weiss was brought in to look into some of the allegations against Mr. O'Reilly, they said. The pendulum swung against fighting for Mr. O'Reilly in the past few days as the law firm began disclosing its findings to 21st Century Fox management, a person close to the situation said.

On Wednesday morning, 21st Century Fox General Counsel Gerson Zweifach met with Mr. O'Reilly's lead attorney Frederic Newman to inform him of the company's decision. Negotiations over Mr. O'Reilly's exit package aren't completed but aren't expected to be acrimonious, a person close to him said.

Fox News and 21st Century Fox initially seemed willing to weather the storm, even as longtime foes of Mr. O'Reilly and the channel, and activists, seized on the scandal as an opportunity to demand his exit. "The O'Reilly Factor" averaged about four million viewers a night, making it one of the highest rated programs in all of cable television.

But inside 21st Century Fox debate grew about whether holding on to Mr. O'Reilly and his ratings was worth the trade-off. Advertisers were withdrawing from his show, and concerns were growing about the message the company was sending by defending Mr. O'Reilly.

Mr. O'Reilly's show had been the anchor of the evening, and his ratings power had boosted viewership for the shows that followed him.

To many, he was the face of the network, and it remains to be seen what he may do next, though speculation ranges from syndicated TV show to a radio broadcast or streaming service.

"He is what people think of when they think of Fox News," said Andrew Tyndall, a television news consultant. If Mr. O'Reilly "goes somewhere else, that could be a real threat to Fox News," he said.

Mr. O'Reilly also has a lucrative book career to fall back on.

Henry Holt & Co., an imprint owned by Macmillan Publishers that publishes Mr. O'Reilly's books, said its "plans have not changed" regarding future titles written either by Mr. O'Reilly or with his cooperation. More than 17 million copies of Mr. O'Reilly's books published by Holt are in print in all formats, and his latest title "Old School" is No. 1 on the New York Times hardcover nonfiction best-sellers list.

Mr. O'Reilly's departure may bring the old-school era at Fox News to an end. Last year, Fox News Chairman and Chief Executive Roger Ailes resigned after he was accused of sexual harassment by multiple women and an internal investigation revealed a pattern of inappropriate behavior toward female staffers. Mr. Ailes denied all of the accusations, and he walked with an exit package worth more than $40 million, a person familiar with the matter said at the time.

21st Century Fox said in a November Securities and Exchange filing that it has paid $35 million in settlements and claims against Mr. Ailes. That includes a $20 million settlement for former on-air personality Gretchen Carlson.

After Mr. Ailes's departure, Rupert Murdoch took over as chief executive of Fox News, and his sons pledged their commitment "to maintaining a work environment based on trust and respect."

That statement last year from James and Lachlan Murdoch drew additional scrutiny to their handling of the O'Reilly matter.

Even with Mr. O'Reilly's exit, 21st Century Fox can't fully move past the broader issue of sexual harassment and the scrutiny over how women have been treated at the company. Federal prosecutors are currently investigating whether the company made insufficient disclosures about settlements of harassment claims, people familiar with the matter have said. The company has said it is cooperating with the investigation.

With the departures of Mr. Ailes and Mr. O'Reilly in less than a year, Fox News has lost both its maestro and its lead performer. Mr. O'Reilly perfectly executed Mr. Ailes's vision for Fox News as a channel for a silent majority not being served by other news platforms.

"Bill O'Reilly's legacy is Fox News," said Jon Klein, a former president of rival CNN. "He not only put Fox News on the map but he became the public face of a movement." Losing him, he added, is like "losing a support beam from your house."

--Jeffrey A. Trachtenberg contributed to this article.

Write to Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

April 19, 2017 19:30 ET (23:30 GMT)