Up next, wrangling respect

RUPERT MURDOCH and Roger Ailes had just announced their intention to create a 24-hour cable news channel from scratch, vowing to launch within a year and take on industry leader CNN. As they walked out of the news conference in the fledging network’s Sixth Avenue headquarters in January 1996, Ailes turned to the News Corp. chairman.

“I said, ‘Rupert, they’re laughing at us,’ ” the Fox News chairman and chief executive recalled in a recent interview. “And he said, ‘They always laugh in the beginning. That never bothers me.’ ”

Indeed, the upstart cable channel -- which CNN founder Ted Turner once boasted he would squash “like a bug” -- seemed to thrive on the skepticism about its endeavor. Casting itself as a “fair and balanced” alternative to the mainstream media, Fox News Channel surpassed CNN in the ratings in January 2002 and since then has been the undisputed cable news champion, regularly amassing an audience more than double the size of its competitors’.

This year, there are signs that its seemingly unstoppable rise may be stalling, as for the first time it has experienced significant audience erosion. But Fox News’ viewership still far outstrips that of its competitors and as the channel celebrates its 10th anniversary this weekend, it is one of the top 10 cable networks. Few are joking now about the viability of a network the New York Times once dubbed Ailes’ “imaginary friend.”

Proving the doubters wrong hasn’t softened the channel’s underdog attitude -- or the ambition of its leader.

Ailes, a canny former GOP political operative whose competitive, pugilistic spirit sets the network’s tone, now has his sights set on a new goal.

“I want the Fox News Channel to be the dominant source of news in America and around the world,” he said matter-of-factly, sitting jacketless in his spacious glass-walled office, his hands folded neatly over his portly frame.

Aiming for dominance is a natural move for Ailes, a communications wizard whose early recognition of television’s potency helped Richard Nixon, Ronald Reagan and George H.W. Bush use the medium to their advantage. Since moving into the cable news industry, Ailes has garnered a reputation as a hard-charging boss who is fiercely loyal and unforgiving when crossed. (When Paula Zahn left Fox News for CNN in 2001, he retorted that a “dead raccoon” would have gotten better ratings than her program.)

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SHORING UP RATINGS

THE 66-year-old executive usually declines to speak to the press, but on a recent afternoon he offered an expansive view of his plans for the network, at turns emphatic and self-deprecating.

“I’ve been a hired hand all my life,” he said. “Give me a mission, and I try to complete it. I don’t have a lot of pretense about who I am or what I do. I get paid to make the numbers, milk the cows, make sure we do what we have to do.”

But before Ailes can help Fox News expand its reach, the channel must deal with some immediate challenges. In the first eight months of this year, the network drew an average prime-time audience of 1.46 million viewers, a drop of 13% over last year, according to Nielsen Media Research. During the same time period, CNN was essentially flat with 745,000 prime-time viewers, while MSNBC was up 14% to 351,000.

All three networks fared worse in September compared with that period last year, when coverage of Hurricane Katrina swelled audiences. Holding onto eyeballs in a slow news cycle is a perennial problem for cable news channels, one with which Fox News’ competitors, in particular, continue to wrestle. Lately, CNN has been pushing its hard-news brand and spotlighting globe-trotting anchor Anderson Cooper, who reported from the Congo last week, while MSNBC has experimented with airing taped programs in prime time.

For Fox News, this year’s ratings slump -- which comes just as it is demanding substantial hikes in subscriber fees from cable and satellite providers -- has prompted speculation that its brash attitude has a limited appeal.

Network executives shrug off such suggestions, blaming the drop on a sluggish news year. They said they are constantly evaluating their lineup but expressed confidence that viewership will pick up once the 2008 presidential campaign begins next year.

“I’m not overly concerned,” Ailes said mildly. “There appears to be a large audience for what we do.”

The network chief is more irked about something he says Fox News has been denied in its rapid ascent: respect.

“What critics of our channel love to do is mix our journalism with our opinion shows and pretend that’s what we’re doing,” he said. “Our critics love to mash them together and act as if Sean Hannity is doing the evening news, which is just nonsense. They don’t give enough credit for our journalism.”

Recently, Ailes has been trying to change that. Unreserved commentators such as Hannity and Bill O’Reilly remain the top ratings draw for the network, but lately the Fox News CEO has been stressing the news chops of anchors such as Shepard Smith and pledging to expand foreign coverage. When former President Bill Clinton recently lambasted “Fox News Sunday” host Chris Wallace for asking whether he did enough to capture Osama bin Laden, Ailes cast the incident as one of journalistic independence, saying that Clinton’s reaction should alarm all the press.

It remains to be seen whether his emphasis on the channel’s news gathering will quiet the debate about its politics. Fox News executives fiercely reject the charge that it has a rightward slant, even as critics -- especially on the left -- call its claim of balance laughable.

While there’s no shortage of Democrats who get airtime on the channel -- California Sen. Barbara Boxer, former party chair Terry McAuliffe and New York Rep. Charles B. Rangel made appearances in the last two weeks -- detractors argue that stories are often framed from a Republican point of view.

The polarized attitudes about the network shape the perception of nearly every move it makes; when Ailes agreed to run a documentary about global warming last year, the right “called me a sellout and a Commie and the left thought it was a trick,” he recounted dryly.

“I think the ideological debate about them is going to continue for some time to come,” said Mark Jurkowitz, a former Boston Globe media writer who serves as associate director of the Project for Excellence in Journalism, a nonpartisan research group. “In a highly polarized environment and particularly an election year, it’s going to be very difficult for them to get past that argument.”

When Fox News launched 10 years ago, it was hard to imagine it would figure so centrally in the country’s culture wars. At the time, the channel had a shoestring news operation and limited distribution. On its first day -- Oct. 7, 1996 -- it could be seen in only 17 million homes.

“Back then, nobody knew who we were,” said Bill Shine, senior vice president for programming. “It was, ‘Fox News? You mean Channel 5?’ Congressmen wouldn’t come on because we weren’t on in their districts.”

Expectations were low, recalled O’Reilly.

“I have a lot of swagger to me, I always have,” said the host of top-rated “The O’Reilly Factor.” “But I wasn’t swaggering into the Fox News Channel. I was going, ‘Jeez, I hope this works.’ ”

A cascade of major news events -- the 2000 presidential election recount, the Sept. 11 attacks and the war in Afghanistan -- ultimately helped drive viewers to the network.

“There were some tests that came along the way that I think we had to pass, or we wouldn’t be where we are, and they weren’t about having the most colorful commentators,” said Brit Hume, managing editor of the network’s Washington bureau. “In those situations, people are looking around and they want to know what’s happening, not necessarily what Sean Hannity or Bill Bennett or Alan Colmes have to say about it.”

There was no question that Fox News offered a different tone than its competitors. Fast-paced, drenched with color and loaded with graphics, the channel hit on an attention-grabbing look that its rivals soon emulated.

“The Fox News Channel approach to journalism is like Wal-Mart’s approach to business: volume, volume, volume,” said Matthew Felling, media director of the Center for Media and Public Affairs, a nonpartisan research organization, referring to the network’s flashy aesthetic and outspoken commentators.

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THE FLYOVER ZONE

IN the wake of the terrorist attacks, the channel’s coverage drew scrutiny from some critics who charged that its use of the term “our troops” and adoption of an American flag logo, among other things, veered toward jingoism. But one of its most successful strategies may have less to do with politics than with populism.

“We’re always looking for stories that do not cling to the two coasts,” said John Moody, Fox News’ senior vice president for news editorial.

That sensibility was on display when Moody and his staff gathered on a recent afternoon for the regular 4 o’clock editorial meeting in the “war room,” a small glass-walled meeting room in the basement newsroom. Four flat-screen TVs hung from the ceiling, one featuring video feeds of producers in the network’s various national bureaus.

Jay Wallace, executive producer of news, suggested readying a feature story on the finances of an “everyday, middle-class” person to run if the Dow hit a record high that week, as expected.

The Los Angeles bureau offered to do the story out of Silicon Valley. Moody didn’t hesitate. “No, we’ll go somewhere else for that, thanks,” he said briskly.

The Chicago bureau noted that one of its correspondents, Steve Brown, was in Iowa.

“I think that’s almost a godsend,” Moody said approvingly.

Two days later, the channel was ready with a piece about factory workers in Des Moines. The banner at the bottom of the screen: “Blue Collar Americans Not Benefiting From High Dow.”

Still, for all of its deftness in capturing a swath of the country that often gets little attention, the recent audience decline suggests that the network faces hurdles. Fox’s viewers are aging -- with a median age of 63.7, compared with CNN’s 60 and MSNBC’s 56.5, according to Nielsen Media Research. (Because of its larger audience, it still edges out its competitors among the key 25- to 54-year-old demographic.) The network’s website also lags far behind MSNBC.com or CNN.com in usage, a sign that it has yet to capitalize on new platforms.

Nevertheless, the channel’s revenues keep climbing. It’s on track to pull in a record $251 million in profits this year, according to Kagan Research -- a figure that should increase substantially if the network is able to secure more advantageous contracts with providers this fall.

Moody downplayed any anxiety about the ratings but said that executives are undergoing a top-to-bottom assessment of all aspects, including programming and even the set design to remain competitive. Recently, the network made several changes in the daytime lineup, including moving E.D. Hill from the “Fox & Friends” morning show to a late-morning program and replacing her with former CBS correspondent Gretchen Carlson.

Ailes “is constantly trying to find ways to make us better,” Moody said. “If it takes a couple of big moves to shake us loose, that’s fine.”

Indeed, the Fox News chief is known for keeping his troops on their toes, whether by calling predawn meetings or making surprise visits. When asked how he could prevent complacency from setting in, Ailes responded, only partly in jest: “Fire some people.”

“We’re not cold about it, but we are determined to keep the quality of the work up and keep the intensity level high,” he said.

In the meantime, Ailes said, he’s working to expand the network’s foreign coverage. With just six bureaus around the world, Fox News’ international resources pale in comparison to those of CNN, which has 26 bureaus outside of the U.S. and a raft of international channels. Fox News executives said that they’re trying to pursue a more nimble strategy by broadening their pool of freelancers and expanding cooperative agreements with other news organizations.

“American audiences are slowly coming around, because of the terrorism attacks, to the appreciation of more foreign news, and we need to do more of that,” Ailes said.

And maybe it’s time to cut down on political coverage, he mused.

“People are sick and tired of everybody arguing and fighting over politics and they’d sort of like to get something moving down the field,” said the network chief, his gaze wandering to the three massive TV screens mounted on his wall, all blaring stories out of Washington throughout the hour. “The economy is great. You don’t see that anywhere, but it’s true. So maybe we need to stay a little more positive.”

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matea.gold@latimes.com