Fox News Co-President Bill Shine resigns amid criticism of his handling of sexual harassment claims

The revolving door at Fox News headquarters was spinning again Monday as parent company 21st Century Fox once again sought to put the network’s sexual harassment scandal behind it.

Bill Shine, the co-president of Fox News who faced mounting criticism over his handling of sexual harassment claims against former Chief Executive Roger Ailes and recently fired host Bill O’Reilly, became the latest employee to head for the exit.

Shine’s resignation came less than a week after Rupert Murdoch, the company’s co-chairman, took Shine and fellow Fox News Co-President Jack Abernethy to lunch in Manhattan in a high-profile show of support.

But ongoing static within the division, including the drumbeat of lawsuits and anger and frustration by women who work for Fox News, made it untenable for Shine to continue as co-president, company insiders said.

The hope among the Murdoch family, which holds the controlling shares in Fox News parent 21st Century Fox, is that the executive changes will be enough to quell the ongoing criticism of the network by activist groups and attorneys who specialize in sexual harassment cases. Those parties have said the company has not been aggressive enough in purging those responsible for a culture where sexual harassment of women was accepted.

Murdoch and his sons James and Lachlan are also looking to stem the controversy to get the approval of British regulators for 21st Century Fox’s takeover of Sky, the highly profitable satellite pay-TV service in Europe.

“Cleaning house is central to changing the corporate culture,” said Jacob S. Frenkel at the Dickinson Wright law firm in Washington, D.C., and a former counsel in the Securities and Exchange Commission. “Best practices in corporate governance usually produce changes in senior management.”

The overhaul of Fox News is the latest indication that James and Lachlan Murdoch are increasingly putting their stamp on 21st Century Fox nearly two years after they were installed as top officers at the media company. In the last year, many veteran executives have left the media company as the brothers seek to remold Fox for the digital age. The sons played a pivotal role in the ouster of Ailes, their father’s longtime friend.

“They’re having an impact — a positive impact,” said media analyst Laura Martin of Needham & Co. “They are cleaning up the mess at Fox News.”

With Shine out, Fox News is elevating Suzanne Scott, who will become president of programming at the network. She had been executive vice president for programming. Another executive vice president, Jay Wallace, has been promoted to president of news at the channel. Both will continue to report to Abernethy.

Scott and Wallace are longtime executives from within the organization. But neither has been tainted by the sexual harassment issues that have plagued the company over nine months since former anchor Gretchen Carlson filed a lawsuit against Ailes.

Shine has never been accused of sexual harassment. But as a top deputy of Ailes and a supporter of O’Reilly, the longtime star anchor who was fired April 18 amid harassment claims, his departure was seen as necessary to move Fox beyond the scandal. Shine is named in several of the harassment lawsuits filed against the network, alleging that he failed to act on complaints about Ailes.

Ailes has denied all allegations made against him. O’Reilly has denied the merits of the claims leveled at him, even though $13 million was paid in settlement claims to women who complained about his behavior.

Larger financial considerations may have played into Shine’s exit, coming in the midst of the parent company’s efforts to take full control of Sky in Britain.

As part of that review, the Murdochs and Fox must be deemed “fit and proper” holders of a broadcast license. The ongoing issue of sexual harassment claims at Fox News does not help on that front. A federal investigation into whether the payouts of sexual harassment settlements made by Fox News over the years should have been disclosed to investors could also be troubling to regulators.

Sky is a jewel that the Murdochs, particularly James Murdoch, the chief executive of 21st Century Fox, desperately want to add to the company’s portfolio.

Fox earlier had to abandon its pursuit of full control of Sky in 2011 when the illegal phone hacking scandal at the Murdochs’ London tabloids, particularly the since-shuttered News of the World, generated headlines around the globe.

James and Rupert Murdoch were called before a committee of Parliament, an appearance that Rupert Murdoch called “the most humble day of my life.” James Murdoch also lost significant standing, which he has carefully rebuilt over the last few years in his stewardship of Fox. The Murdoch family doesn’t want a repeat of the 2011 scandal that engulfed the media company.

But the Murdochs also have to be mindful of not disrupting the profit engine that they have built in Fox News, the top-rated cable network.

Shine played a key role in building Fox News Channel into a juggernaut, having joined the company when it first launched in 1996. Shine was extremely popular with Fox News talent and was also known for his ability to identify the hot-button issues that appeal to the conservative viewers who flock to the network.

Shine’s future was thrown into question last week when Fox News prime-time star Sean Hannity took to Twitter to publicly voice his support for the executive. The tweets were in response to a New York magazine report suggesting that Shine had sought public support from the Murdoch family.

“Somebody HIGH UP AND INSIDE FNC is trying to get an innocent person fired,” Hannity said. He also tweeted: “I pray this is NOT true because if it is, that’s the total end of the FNC as we know it. Done.”

Hannity is a close friend of Shine, who was a producer of the host’s program before he climbed up the executive ranks.

Shine’s departure has led to speculation that Hannity is considering leaving the network. But a Fox News representative strongly denied that there has been any discussion on that front.

Hannity recently signed a deal with Fox News that keeps him at the network through 2020. At a salary that exceeds $10 million a year, it’s highly unlikely that he would walk away voluntarily even if he is upset about a close friend and ally being pushed out the door.

Although Hannity’s social media account indicated that Shine’s departure means a move away from the conservative foundation of Fox News, there is no evidence that the network is shifting its attitude or the political leanings of its commentators. Fox News has a hold on TV news viewers who see other outlets as too liberal.

The strength of that brand attribute is apparent in the ratings. Fox News retained much of its prime-time audience last week despite the loss of O’Reilly, its most-watched personality.

stephen.battaglio@latimes.com

Twitter: @SteveBattaglio

UPDATES:

6:10 p.m.: This article was updated with additional reaction to Shine’s resignation.

This article was originally published at 12 p.m.