Ailes tried to use the brewing competition with CNN to his advantage. The negotiating window to renew his contract was open until June 30, and CNBC’s success gave him leverage. Despite Wright’s growing reservations about Ailes, Jack Welch remained a vocal booster who wanted to keep Ailes in the fold. Once again, Ailes continued to use the press. Nine days before the contract deadline, USA Today reported that Ailes’s “chances of bolting are 50-50.” The negotiating maneuvers paid off. On June 30, 1995, Ailes signed a four-year contract to remain at NBC. It was significantly more lucrative than his existing deal. Ailes’s base salary jumped to $725,000, with guaranteed increases to $800,000 in January 1997, and $900,000 in July 1998. The contract stipulated that Ailes would receive an annual incentive bonus of no less than $250,000. As before, Ailes reported to Wright and was allowed to retain his outside business interests. He remained a board member and principal of Ailes Communications, executive producer of the Limbaugh show, and retained the right to consult on two outside talk shows.
What the contract did not do is resolve the tangled lines of reporting between Ailes, Rogers, and Zaslav, a smoldering ember that would soon ignite. Ailes wanted complete control of CNBC, but Rogers and David Zaslav were still in the picture. The competition heightened Ailes’s concern that his rivals were plotting a new push against him. “This is where the beautiful marriage cracked,” Bob Wright said.
In May 1995, NBC had announced a joint venture with Microsoft to create a new interactive channel. Tom Rogers started negotiations with Bill Gates. Ailes was initially unaware of the plan. At 30 Rock, executives were hatching the channel, which would take the place of America’s Talking, under the informal code name, “The Ohio Project.” When Ailes got wind of it, he considered the name a snide reference to his upbringing. He lobbied to save America’s Talking and became especially enraged after learning that Zaslav backed the new channel. “The reality of it was, Bill Gates didn’t want it to be under anyone but the president of NBC News,” Wright remembered. “That was a crushing blow to Roger. He hated it.”
It was at this time that Ailes seemed to spin into “meltdown mode,” as Bob Wright would later put it. His fourteen-year marriage to Norma was nearing its end. Norma had filed for divorce in September 1994. A State Supreme Court justice finally granted a judgment on September 5, 1995. The dissolution of his second marriage had significant financial consequences, unlike that of his first, eighteen years earlier. He was now a man of considerable wealth.
Ailes’s conflict with Zaslav deepened when he learned that Zaslav had questioned his projections for CNBC. “The bubble broke in the fall,” Wright said. At a company dinner one evening that September, Ailes declared war on his colleague. “Let’s kill the S.O.B.,” he told loyalists dining with him. Then, in a meeting with Zaslav, Ailes allegedly called him “a little fucking Jew prick.”
On Saturday, September 30, Tom Rogers called NBC’s HR chief, Ed Scanlon, to inform him that Zaslav had made a shocking charge against Ailes. The insult, Rogers said, had been made during a “tirade,” where there was a witness present. In handwritten notes on the matter, Scanlon reported, “I told Tom if this was an accurate story, it represented a serious charge against Roger Ailes and cannot be dismissed by NBC.”
Jack Welch prized Scanlon for his discretion and his ability to keep messy employment matters out of the press. The allegation that a highprofile executive had hurled an anti-Semitic insult against a Jewish employee was just the type of matter that needed to be handled with extreme sensitivity, especially in a media company full of gossipy journalists. That night, Scanlon briefed Wright on the situation. The next day, Wright conferred with Rogers, and Zaslav called Scanlon to provide his firsthand account of the episode. Zaslav said that he was not trying to discredit Ailes, and asked to report to someone else at 30 Rock while keeping his current position. “I’m only trying to do my job,” Zaslav said. Before they got off the phone, Scanlon told Zaslav that Ailes’s remark, if true, was a serious violation of NBC standards of conduct, and the matter would have to be investigated.
As it happened, Scanlon and Wright were scheduled to attend a meeting at the Management Development Institute, GE’s famed leadership training center in Crotonville, New York, on Monday and Tuesday. In between sessions, the men conferred and decided to consult Howard Ganz, a partner at the law firm Proskauer Rose, whom NBC had retained to handle employment disputes. “Howard Ganz is a tough and fair investigator,” Wright said. On Tuesday evening, October 3, Scanlon asked Ganz to conduct an inquiry—quietly. NBC gave Ganz, according to Ganz’s notes, “free rein—no conditions attached; no limitations imposed.”
Instead, Ailes moved to discredit Zaslav. A week into Ganz’s inquiry, Ailes forwarded to Scanlon a scathing letter that Jim Greiner, CNBC’s new chief financial officer, had written him about Zaslav. According to Greiner’s pro-Ailes account, it was Zaslav, not Ailes, who posed the problem. He said Zaslav was a “control freak” who managed through “intimidation” and lacked “good business judgment.” The sources, whom Greiner did not name in his letter to Ailes, were “employees in good standing,” who “didn’t seem to have an ax to grind,” and who “spoke rationally and reasonably.”
Scanlon seemed to consider the letter a transparent attempt by Ailes to damage Zaslav. He sent a copy of the letter to Ganz. “Roger is really working to get a ‘big and long story’ on David Zaslav,” Scanlon wrote to Ganz in a note attached to the letter.
Within two weeks, Ganz detailed his initial findings to NBC. “I have reported to NBC that there is substantial credible evidence corroborating this allegation—that I believe the allegation to be true,” he noted, regarding the anti-Semitic slur. He found that it occurred “in context of history of abusive, offensive, and intimidating statements/threats and personal attacks reportedly made to and upon a number of other people.” Moreover, Ganz investigated allegations that Ailes had “intimidated and threatened individuals who might be interviewed or have relevant information in connection with matters related to investigation.” It was Ganz’s opinion that Ailes’s remark to Zaslav could be grounds for “cause termination.” It was a persuasive account. Bob Wright later said that he believed Ganz. “My conclusion was that he probably said it,” Wright recalled, referring to Ailes’s comment.
NBC asked Ganz to temporarily suspend his investigation and meet with representatives of Ailes to see if they could resolve the matter without proceeding further. Their interest was self-preservation. “So far have been able to keep lid on and avoid leaks. If resume investigation, will necessarily involve substantial number of additional people—run risk of leaks,” Ganz noted.
On Monday, October 16, Scanlon spoke with Ailes. After being “warned about his behavior,” and being told that it was “unacceptable and did not comport with GE/NBC standards,” Ailes told Scanlon that he wanted to put an end to the matter within twenty-four hours.
Friday, October 13, had been a difficult day for Zaslav. Around midday, an NBC researcher told Zaslav about a conversation he had had with Ailes’s ally Scott Ehrlich. Ehrlich instructed him not to talk to Zaslav. In a letter to Ganz detailing the incident, Zaslav also related that his employees reported to him that Ailes was speculating that he was improperly using company funds to strike deals with cable operators. “I am particularly troubled by statements he has apparently made, indicating that he thinks I may be paying off cable operators with CNBC/A-T marketing funds,” he wrote. He also said that Ailes’s camp was spreading a rumor that Zaslav would be forced out by the end of the week. Zaslav concluded his letter on an ominous note. “I view Ailes as a very, very dangerous man. I take his threats to do physical harm to me very, very seriously and [the threats] have caused, and will continue to cause, great concern for me and my family,” he wrote. “I feel endangered both at work and at home. I plan to seek counsel from Ed Scanlon as to whether I should continue to go to Ft. Lee.”
On October 17, the same day that Zaslav wrote about his latest bouts with Ail
es, Howard Ganz was scheduled to meet with one of Ailes’s attorneys, Milton Mollen, a retired judge whose specialties included workplace discrimination cases. Ganz planned to detail for Mollen the findings of his investigation. “You should know that I have approached this entirely on merits—as totally neutral outside, independent lawyer/investigator,” he wrote. “I have called it as I see it—period.” Ganz noted that Ailes “was offered opportunity to meet with me, but declined.” Ganz wanted to know “what avenues of possible negotiation do you see?”
NBC was considering two options. One was for Ailes to resign. Ailes and NBC would negotiate the spin they would put on his departure in the press and the exact timing of it, as long as Ailes signed a resignation letter within twenty-four to forty-eight hours. They would negotiate a financial settlement, but given the circumstances NBC was not prepared to pay out his full contract or to provide the minimum for a no-cause termination. If he wanted to remain at NBC—“don’t know if possible, but (speaking off top of head),” Ganz wrote—Ailes would have to apologize to Zaslav, agree to cease his pattern of intimidating verbal abuse, and allow Zaslav to report to someone else.
When later asked about the meeing, Mollen criticized the manner in which Ganz approached the investigation. “He had come to the conclusion that Ailes had made an anti-Semitic remark. I asked him, ‘Well what’s your evidence?’ I was shocked by his answer. I asked if he had conducted a hearing with Ailes. He had not at all.” Mollen noted that Ailes had worked with a number of Jews in his career. “In fact, his first partner in business was a Jewish person,” Mollen said.
NBC drafted “stay” and “exit” alternatives for Ailes. Under the stay scenario, NBC stipulated the terms of Ailes’s apology to Zaslav: “(a) Must formally apologize for and retract anti-Semitic reference and commit never to making any such reference in the future. (b) Must retract any and all statements that Zaslav reasonably understood as intimidation or threats related to alleged communications that Zaslav had with NBC corporate executives; and must express a commitment not to make any such statements in the future.” Because of business realities, Zaslav would continue to work with Ailes, but NBC demanded that Ailes allow Zaslav to report to him and Tom Rogers.
The exit scenario would include confidentiality clauses, a nondisparagement clause, a noncompete provision with, for example, “CNN/Turner, CBS, ABC, Fox, any Business News Services.” Ailes would agree in addition not to “solicit NBC/CNBC/AT employees for any competitive employment.” Other deal points included “departure announcement by Thanksgiving weekend effective December 31, 1995.… No conduct by R.A. that a reasonable employee would perceive as offensive, intimidating or abusive during the period through 12/31/95.” Ailes would be offered a “consultancy agreement with NBC effective January 1, 1996 through December 31, 1997 with a monthly payment.”
On October 20, Ailes had a letter hand-delivered to Wright and faxed to Scanlon and Welch. Fighting to save his job, Ailes played both the victim and the aggressor. “We have an opportunity to resolve this matter quickly and effectively,” he began. His letter went on:
The charges are false and despicable.
I have not received a fair hearing.
This is un-American.
All the lawyering will provoke an untoward outcome.
Meanwhile, Zaslav had been doing his best to avoid Ailes at the office. But Ailes was getting reports that Zaslav was leaking to the press. “It has come to my attention that David Zaslav has conducted several off-the-record conversations recently with Justin Martin, a journalist with Fortune Magazine,” Brian Lewis wrote in a memo on October 18. “I have not raised this with David yet, but as you know, we have a policy that all media calls must first go through media relations to ensure that one corporate message be distributed.… Please advise.” On the afternoon of Wednesday, October 25, Ailes showed up at Zaslav’s door and walked in. He reached over and shook Zaslav’s hand in a friendly way. “I like you and I have always liked you,” Ailes told him.
“Thank you,” Zaslav replied.
Ailes seemed armed with talking points to deliver a message. “There’s been nothing personal in this whole matter,” he said. “At this point, we are just hurting each other’s careers.” Ailes said that if Zaslav reached out to him, the feud would end. “We can find peace,” he said.
“I appreciate that,” Zaslav offered.
“This has been a real war. I don’t like wars, but I am good at them. The thing about wars is that there are casualties,” Ailes said and laughed. “I have been through about twelve train wrecks in my career. Somehow, I always walk away.”
It must have been unclear if Ailes was trying to apologize to him or threaten him.
“I am a deeply spiritual man,” Ailes continued. “It is not for me to pull the noose tighter on your or anyone else’s neck. Our Maker does that. You can get some sleep now.… You don’t have anything to worry about from me.”
“Thank you,” Zaslav said.
Ailes walked out of the office. Zaslav quickly typed up the conversation and sent a transcript of the encounter to Scanlon.
NBC executives were at a crossroads. “It was a he-said, he-said situation,” Wright said. “If they could come together, I would have been satisfied … but that didn’t happen.” Ailes did not take the exit alternative, and executives continued to worry about the episode leaking to the press. At a staff meeting on the morning of October 30, Ailes began by declaring, “I feel like General Patton. I’m afraid they will find out I love war.”
On November 10, Ailes reached an agreement with NBC and kept his job. “Ailes agrees to work constructively and harmoniously with Zaslav in the best interests of NBC, CNBC and AT,” the agreement stated. It added: “During his employment by NBC/CNBC, Ailes agrees that he will not engage in conduct that a reasonable employee would perceive as intimidating or abusive. If, as determined by Scanlon, Ailes engages in such conduct, that conduct shall … entitle NBC to terminate the June 30 Agreement and Ailes’ employment thereunder.” A separate agreement between Ailes and Zaslav, which both men signed, ended the battle, in which “certain disputes and disagreements have arisen between or among the parties.”
“There was no apology. There was no admission of any wrongdoing,” Milton Mollen said.
On November 21, NBC announced that Zaslav had been promoted to executive vice president for cable distribution and domestic business development. One Ailes loyalist remembered how, before long, Zaslav began showing up to work in a gray Porsche 911, which he parked in a handicapped parking spot so it did not get scratched. “Roger walks with a limp. Of course it pissed him off,” the source said.
The agreement did little to ease the tensions. In late November 1995, Ailes and Zaslav traveled to Anaheim, California, to the Western Cable Show, a major industry conference. “It was very, very uncomfortable,” one staffer later said. “Roger was not speaking to David, David was not speaking to Roger. And here they were, being the face of CNBC.”
Though Ailes had stayed, it became clear that he had little future at NBC. Wright and Welch ruled out the possibility of Ailes running the new NBC-Microsoft cable news network, even though Ailes lobbied Wright to change his mind. “He said he would run it for Gates,” Wright recalled Ailes telling him. “I said, ‘It has to be NBC News.’ ” Wright tried unsuccessfully to convince Ailes to remain in charge of CNBC. Ailes could not accept the offer. In an instant, he was being demoted from Wright’s heir apparent to essentially a cable news producer in charge of CNBC’s programming.
Ailes, however, showed no signs of backing off in public. “I love competition,” he told a Newsday reporter shortly after the Zaslav episode. “That’s why I get up in the morning.”
On December 14, 1995, Ailes paced his office in Fort Lee, watching his career implode on a television monitor. America’s Talking, his baby, was being ripped from his hands, and it was all happening in public. On-screen, Bob Wright walked to the podium at 30 Rock’s Studio 8H, the iconic set of Saturday
Night Live, to open a press conference, flanked by Jack Welch and Andy Lack. Bill Gates and Tom Brokaw participated by video linkup. Wright confirmed the talk of the media industry for weeks: NBC and Microsoft were launching a new cable news channel named MSNBC, and Andy Lack, the flashy president of NBC News, would be in charge of its programming. Microsoft was investing $220 million in the 50-50 joint venture, and would pay NBC a $20 million annual licensing fee to distribute its news programming online. MSNBC would take over the America’s Talking slot on the cable dial—and Ailes’s channel would be dead.
The press conference was a response to the Time Warner–Turner Broadcasting System merger, which had been announced on September 22. The staggering $7.5 billion deal spurred CNN’s rivals to take aim at Turner’s cable news monopoly, lest they get left behind. In early December, ABC’s blustery news chief, Roone Arledge, announced that ABC was planning to launch a twenty-four-hour cable news channel. Speaking to a group of business leaders in Boston around the same time, News Corp chairman and CEO Rupert Murdoch also announced his intention to launch a twenty-four-hour news channel. For Murdoch, the rivalry with Turner was personal. Just a few months earlier, in August 1995, Murdoch had had his own backroom talks with Turner in hopes of acquiring CNN, and had gotten nowhere. A day after Murdoch’s announcement that he would start a “really objective” channel, Turner declared at the opening session of the Western Cable Show that he looked forward to “squishing Rupert like a bug.” The battle lines were drawn. Despite Turner’s public bravado, he was unnerved by Murdoch’s advance. “From CNN’s earliest days, I was concerned that someone would come after us with a right-wing network,” he later wrote in his memoir, Call Me Ted. “Now it was happening.”
The Loudest Voice in the Room: How the Brilliant, Bombastic Roger Ailes Built Fox News--and Divided a Country Page 22