Cable News Rivals Prepare for Life After Monica

The president’s impeachment trial is about to end, and Fox News Channel wants to be ready--and not just to cover the president’s reaction.

“Watch MSNBC; if they go earlier, go earlier,” Fox News Chairman Roger Ailes commands his senior management at one of his 8 a.m. daily meetings. He’s worried about Saturday. Normally a sleepy day given over to pet and psychology shows and reruns, this week it will be post-Senate-impeachment-vote day. That’s a big event in cable news land, which has been dominated for a year by the goings-on in Washington. Ailes wants Fox to go “full bore,” even if it costs money, including changing the schedule to accommodate expanded editions of Fox’s most popular political debate shows.

As Fox glided past MSNBC in the important prime-time ratings in the last month, the competition between the two news channels, which had been simmering, hit full boil. Adding new fuel to the fire is uncertainty about what happens when the national impeachment soap opera is over. Already, MSNBC vice president and general manager Erik Sorenson calls Fox’s top prime-time shows, “The O’Reilly Factor” and “Hannity & Colmes,” “aggressive and virulent--professional wrestling as talk shows.” And that’s while he’s praising them.

Ailes, former president of MSNBC sister channel CNBC, repeatedly refers to the time NBC News President Andy Lack dubbed himself “America’s news leader,” saying Lack “is over there, trying on crowns, instead of getting in the car, schlepping to Secaucus [N.J., where MSNBC is based] and doing good television.” Don Imus’ morning radio show, simulcast by MSNBC, joined the fray on Thursday, referring to Fox as: “We report, you hide,” a play on Fox’s “We report, you decide” slogan.

Fox’s prime-time ratings have been steadily growing for several months, but it was MSNBC’s 20% ratings drop from December to January that pushed Fox into first place (Fox drew an average of 216,000 households at any moment between 8 and 11 p.m. Eastern Time in January, to MSNBC’s 204,000, with Fox the only cable news network to show an increase.) MSNBC still beats Fox in the daytime, but it’s prime time where the money is made--63% of Fox’s revenues come from the evening hours--making that win even sweeter. The numbers are particularly compelling because Fox reaches far fewer homes--currently 38.2 million to MSNBC’s 47.3 million.

On most nights, MSNBC’s centerpiece 9 p.m. newscast, anchored by Brian Williams, the likely heir apparent to Tom Brokaw at “NBC Nightly News,” gets trounced by Fox’s “Hannity & Colmes,” a loud political debate show (although a second airing of Williams on CNBC gives him more overall viewers). For the 8-9 p.m. hour, where Fox’s Bill O’Reilly-anchored show has dominated for months, MSNBC just hired Col. Oliver North, who has a conservative talk-radio following, and conservative host John McLaughlin. Sorenson says both were hired for their strong personalities, not their political views.

Sorenson claims to be unfazed by the ratings dip. “MSNBC is going fabulously. A little bit of the fizz in our phenomenal run in 1998 went out of the soda, but I’m not really concerned about that,” he says, adding that one month isn’t reflective of the big picture. “We can easily regain share.”

Ailes credits the “We report, you decide” strategy for his network’s growing strength. “If people came and didn’t find that, then we wouldn’t be doing so well,” he says. But just in case anyone still hasn’t gotten the message, Fox anchors recently started slipping the words “fair and balanced news”--another Fox slogan--into their patter every few minutes. “Actually, I’m a centrist Democrat,” snapped back California Congresswoman Ellen Tauscher on Wednesday, after she was introduced as the liberal balance to a preceding conservative viewpoint.

It’s unclear what role politics has played in the relative strengths of the two channels. In a recent Pew Research Center survey, more Republicans than Democrats or independents claimed to be watching most or some of President Clinton’s Senate trial.

Conventional wisdom has it that Fox is the conservative one, MSNBC the more liberal. Until MSNBC hired McLaughlin and North, Fox had more self-identified conservative hosts, such as Brit Hume, anchor of the 6 p.m. newscast, and Internet gossip Matt Drudge. .

But MSNBC, with its story-of-the-day debate format and frequent input from the conservatives who flood its Internet chat rooms, has often come across as anti-Clinton, because of the sheer tonnage of its coverage. Finally, Ailes notes that the top-rated political chat shows are actually hosted by liberals, including Geraldo Rivera and Chris Matthews, on CNBC, although that doesn’t mean the shows are being watched by viewers of the same political stripe.

Channels Challenged Long-Established CNN

When both channels launched in 1996, few media observers thought there was room for even one more cable news channel, given the 16-year head start of Turner Broadcasting’s Cable News Network. Today, however, with formats that differ wildly from the straightforward, no-frills CNN, MSNBC and Fox News are slugging it out with some long-established channels such as CNN’s Headline News, and drawing new viewers to cable news as well as some viewers away from CNN.

Both Fox News and MSNBC say they are ahead of business projections. MSNBC, a joint venture between NBC and Microsoft, is expected to reach break-even status sometime in 2000, about two years early. “Madison Avenue loves this network,” Sorenson says, because its audience has “the fourth-highest mean salary in cable,” behind Bravo, CNBC and E! Fox, meanwhile, has said it will break even when it reaches between 45 million and 50 million homes; so far, it has contracts to eventually reach 46 million homes. Parent News Corp.’s second fiscal quarter financial results, released Wednesday, put Fox News Channel operating losses at $31 million, slightly better than the year-ago quarter’s $33-million loss. Revenues almost doubled to $29 million.

The projections could change if a major event, such as a war, forces Fox to shell out huge sums for news gathering; Fox is building its operation from the ground up, unlike MSNBC, which relies on the already established and far-flung NBC News operations. Fox got beaten by both MSNBC and CNN on the December bombing of Baghdad, because Ailes decided not to spend the upward of $300,000 per week it was costing to keep someone in Iraq.

Indeed, some of Fox News Channel’s recent strength is a product of sheer luck, although Ailes would call it being foresighted. Ailes says he deliberately focused on building a strong Washington presence when the channel was launched. But it was luck that the Clinton crisis became the story that dominated 1998, instead of, say, a war in the Middle East. It was a made-for-Fox story, taking place largely in a few rooms and playing to Fox’s political strengths.

The cable news channels already have had a foreboding glimpse of what the future might hold: Last Friday, a down day in the impeachment process, ratings for all three channels dropped dramatically, with Fox taking a bigger proportionate hit than either CNN or MSNBC.

“There will be a drop-off in cable news viewing in the wake of this,” Sorenson says, although he expects to lure back some of the viewers who simply stopped watching because they were sick of the impeachment story. Still, he says, “The more politically focused a network is, the bigger the hit they’re going to take.” He means Fox. “All boats go up with impeachment and all boats go down when there’s no story,” Ailes counters.

Both Sorenson and Ailes think Washington will continue to be a big story. At Wednesday’s early-morning meeting, Ailes and his staff began to hammer out how to cover the ground-laying moves of such expected presidential candidates as Elizabeth Dole.

But Fox is also investing $500,000 in upgrading some of its bureaus; it’s also working on its daytime lineup, and just hired Paula Zahn from CBS News. Moreover, the channel is already priming viewers for life without Lewinsky. Wednesday, a grabby promotion started airing for “Four nights--four special reports” on the still unsolved murder of child beauty pageant queen JonBenet Ramsey, beginning Tuesday at 7 p.m.