Fox News ratings could take a big hit with the firing of Bill O'Reilly, its biggest star

The end came quickly for Bill O’Reilly.

The TV host has been the biggest star on Fox News for most its 21-year existence, generating huge ratings and earnings.

But just 18 days after disclosures of sexual harassment complaints and settlements by multiple women, he was fired.

Fox didn’t even wait until he returned from vacation in Europe to deliver the news.

The swift action underscores the rising clout of James and Lachlan Murdoch, the brothers who control 21st Century Fox and have demonstrated their willingness to flex their executive muscle even when it doesn’t always align with their father's wishes. Rupert Murdoch, 21st Century Fox’s executive chairman, stood by O’Reilly in the face of the harassment claims and protests.

Although ratings remained strong for “The O’Reilly Factor” and the network, the Murdoch family was under growing pressure act quickly to address a mounting scandal within the company and a backlash from advertisers. The sons had no desire to keep making payments that totaled $13 million or excuses for inappropriate behavior by employees who represented the Fox brand, which also extends to entertainment and movies.

The claims against O’Reilly, 67, added fuel to a crisis that began last summer when former anchor Gretchen Carlson filed a lawsuit against the network’s former executive, Roger Ailes, whom she alleged damaged her career after she spurned his sexual advances.

The Murdoch sons decided they could not tolerate O’Reilly’s reported behavior — problematic enough to pay settlement claims — after ousting Ailes and announcing that 21st Century Fox would be a more enlightened workplace.

The elder Murdoch supported his sons’ decision, telling employees in a Wednesday memo: “We want to underscore our consistent commitment to fostering a work environment built on the values of trust and respect.”

O’Reilly continues to deny the claims, although the blow of his departure probably was softened by Fox having to pay out a significant portion of his contract, which was believed to be as high as $25 million annually. (Ailes received a $40-million payout when he left).

“It is tremendously disheartening that we part ways due to completely unfounded claims,” O’Reilly said. “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.”

Many observers believe it took an advertiser pullout to get 21st Century Fox executives to act as quickly as they did.

“Paying settlements to cover up O'Reilly's egregious harassment was a cost of doing business as long as it was confidential,” said attorney Debra Katz, founding partner at Katz, Marshall & Banks, which handles employment discrimination cases. “But the cost became too high when advertisers pulled out in droves and Fox's credibility took another major hit."

Still, O’Reilly’s removal was a stunning decision, and one that could prove deeply unpopular with his strong following of Fox News viewers who buy his bestselling books and see him at live appearances on the road.

It’s no exaggeration to say Fox News Channel’s loss of “The O’Reilly Factor” could be the equivalent of NBC losing its top-rated comedy “Friends” in 2004, which spelled the end of the network’s “Must-See TV” lineup that provided dominant ratings for years on Thursday night.

Update: Bill O'Reilly is officially out at Fox News>>

By delivering the biggest audience of any cable news network each night, “The O’Reilly Factor” has been a tent pole that supports the other programs in the Fox News prime-time lineup.

His exit will be a far greater blow than the departure of rising star Megyn Kelly. When Kelly left her 9 p.m. Eastern time show on Fox News in January to join NBC, the network didn’t experience any ratings decline in the time period; her replacement, Tucker Carlson, was able to retain much of the powerful lead-in from O’Reilly.

Now, Carlson will be the 8 p.m. host, followed by the breezy discussion program “The Five,” which moves to 9 p.m. Eastern time, followed by “Hannity.”

The consensus in the TV news industry is that losing O’Reilly’s program — which averaged 3.98 million viewers in the first quarter of 2017 — could drive down ratings for the entire Fox News prime-time lineup by about 25%.

Not everyone agrees. Joe Peyronnin, a former TV news executive who teaches journalism at Hofstra University, said the Fox viewers who are looking for a more conservative take on the news still only have one place to go and that O’Reilly’s departure won’t have dire consequences.

“Fox News is a strong brand and the only game in town for millions of loyalists,” Peyronnin said.

Neal Shapiro, a former NBC News president, agreed that the loss of O’Reilly is hardly fatal.

“Look how quickly Tucker Carlson became a star on Fox,” Shapiro said. “If they find the right talent, I think the Fox audience will quickly roll out the welcome wagon.”

Sponsors rapidly abandoned “The O’Reilly Factor” after the New York Times reported that O’Reilly and Fox News paid $13 million to five women to settle claims of sexual harassment and abusive behavior. The claims included inappropriate discussions with a female producer and making promises of career advancements to women in exchange for sexual favors.

Fox News could have sustained the defections for a while as advertisers moved their spots into other programs. But the attention surrounding the accusations against O’Reilly — prompting protests outside Fox News headquarters in Midtown Manhattan — would have made it difficult for any advertiser to return to the program.

The risk for Fox News would have also intensified during the upfront advertising market, already in play, when companies decide where to make their advance commitments for commercial time that runs during the 2017-18 season.

The crisis has also threatened other aspects of the business at 21st Century Fox. The controversy at Fox News led to speculation that it could threaten British approval of the company’s proposed $22.9-billion purchase of British pay-TV provider Sky. The Murdochs lost out on that deal five years ago after the company was embroiled in a phone-hacking scandal and may not have wanted to leave anything to chance this time around.

Although O’Reilly is leaving the cable news network, his effect on TV news will endure.

O’Reilly changed the cable news game by putting his point of view and personality ahead of reporting. His bluster, confidence and authority made him a signature talent for Fox News when it toppled CNN as the cable news leader in 2002 and kept it on top in the ratings ever since.

“CNN always said ‘the news is the star,’” recalled Shapiro. “Bill O’Reilly proved ‘no, the anchor is the star.’ Nobody watched Bill O’Reilly’s show to find out what was happening. They watched to find out what Bill thought was important and why it was happening.”

Before O’Reilly — who had a journeyman career in local, network and syndicated TV before joining Fox — opinion shows on cable news tried to at least give the appearance of presenting opposing points of view. For years, CNN sought balance with its left and right leaning panelists on “Crossfire.” When conservative radio host Sean Hannity first moved to TV on Fox News, he was given a liberal sidekick, Alan Colmes.

But O’Reilly’s program showed that a single compelling host with a consistent approach could draw a loyal and large audience. His viewers could count on him each night to attack the so-called mainstream media’s perceived bias, proponents of political correctness and the actions of Hollywood liberals.

While O’Reilly insisted he was independent — he described his program as the “No-Spin Zone” — he was more critical of progressive-leaning ideas and often decried the loss of what he called traditional American values that he believed in while growing up in a modest household in the Long Island suburbs during the 1950s and ’60s. His current bestselling book is called “Old School: Life In the Sane Lane,” a paean to the rules of that era.

O’Reilly’s program often became as much about the host as it was the news. Big interviews with major political figures — he had sit-downs with George W. Bush, Barack Obama and Hillary Clinton — were often followed by discussions critiquing his performance as well as the subjects.

But O’Reilly’s approach was replicated during other hours on Fox News. The format works on the liberal side of the aisle as well, as MSNBC now has the second-most successful opinion-driven show with politically progressive commentator Rachel Maddow in prime time. O’Reilly even inspired a satirical character on Comedy Central, as Stephen Colbert worked in all the host’s tropes into his fictional right-wing commentator on “The Colbert Report.”

stephen.battaglio@latimes.com

Twitter: @SteveBattaglio

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UPDATES:

4:35 p.m.: This article was updated throughout with additional details, including reaction from O’Reilly.

This article was originally published at 9:05 a.m.

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