• by Karlene Lukovitz  @KLmarketdaily, April 26, 2023

Fox News’s abrupt ouster on Monday of Tucker Carlson, its largest audience draw, has the news business totally preoccupied with speculating about whether it will require another far-right conspiracy theorist purveyor to match Carlson's viewership, and whether Fox will adjust its approach even minimally as it tries to navigate between continuing to fire up its Trump-loving base and avoiding future legal entanglements.

Ratings and Fox Corp.’s value hang in the balance, and both are in some jeopardy in the short term, at least. But some speculate that Fox News might actually benefit long-term on the advertising front from Carlson's departure, depending on the choice of a replacement.

Fox’s value has dropped by more than $500 million since the ouster, with shares dropping by 17 cents to $29.74 on Tuesday, and by 3.5% since Friday.

On Monday night, the debut of Carlson’s show’s replacement, “Fox News Tonight" — which will feature a rotating lineup of hosts until a permanent replacement is chosen — drew 2.6 million viewers, according to Nielsen. 

That was about 21% lower than “Tucker Carlson Tonight”’s average 3.3 million viewers over the past eight Mondays, although still by far the 8 p.m. hour’s best-watched cable news program for the night, noted The Hollywood Reporter. An MSNBC special focusing on Carlson’s ouster during the 8 p.m. hour pulled a relatively small 1.51 million. In recent times, Fox News’s “The Five” has occasionally surpassed Carlson’s show in ratings.

Carlson’s show, which has averaged 3.25 million viewership year-to-date, was also frequently the most-watched prime-time program.

In a statement to Reuters, a Fox spokesperson pointed out that Fox News has been the most-viewed cable show for 22 years, and that Monday’s number was higher than Carlson’s last show, on Friday April 21.

“Hannity,” in the 9 p.m. hour, did not appear to be affected by the lack of a Carlson lead-up, scoring 2.53 million viewership, or about the same as its Monday-night average for the past two months (2.59 million). However, it was outperformed by MSNBC's “The Rachel Maddow Show,” with 2.73 million.

Meanwhile, while many big brands have long avoided cable news in general because they do not want to be associated with divisive content, some analysts say Fox News might attract some more mainstream brands if it could somehow manage to find a Carlson replacement capable of taking the radical, authoritarian content down a notch without alienating the network's core audience. 

My Pillow, owned by Trump acolyte/2020 fraud conspiracy theory promoter Mike Lindell, has been Fox News’s largest advertiser.

During Fox Corp.’s last earnings call, CEO Lachlan Murdoch reported a downturn in direct-response advertising.

In recent times, Carlson’s agenda had included pushing a conspiracy theory that Jan. 6 participant Ray Epps was a government agent (Epps demanded a retraction by Carlson and threatened to add another lawsuit to the ones already faced by Fox); trying to spin the Jan. 6 riot as being a peaceful protest; and praising Russia (whose state media outlet has already used social media to offer Carlson a job).

Advertising is probably Fox’s “long game,” and shifting away from “fanatical conspiracy content, less ‘My Pillow’ stuff, might begin to re-attract big-time advertisers,” Huber Research analyst Doug Arthur wrote in a research note.

Madison & Wall media analyst Brian Wieser opined that a shift in tone might do the trick with advertisers that have been ambivalent about using the network.

On the other hand, any significant downward trend in ratings could, of course, damage Fox News’s advertising outlook — and Carlson’s outlier stances were obviously the source of his appeal to many of the network’s viewers.

While rival Newsmax is still tiny in comparison with Fox News, it is already trying to exploit Carlson’s ouster to woo Fox’s audience by asserting that this is more evidence that Fox is becoming "establishment media." And on Monday night, each of its two shows nearly tripled their recent viewership averages, with “Eric Bolling the Balance” at 531,000 and “Greg Kelly Reports” at 540,000, THR reported. Kelly’s show included an interview with former president Donald Trump.

Dominion Voting Systems’ massive, recently settled defamation suit against Fox claimed that a primary motivator of Fox News repeatedly broadcasting false claims about Dominion was Fox management’s desperation to retain viewers after some defected to Newsmax in the wake of Fox’s having accurately declared Joe Biden the winner of Arizona in the 2020 election.

There is also another key factor affecting whether Fox management will feel motivated to choose a somewhat more moderate replacement for Carlson.

Based on a new report by The New York Times, concerns about the content of Carlson's internal communications and how those could further damage Fox News's reputation and/or be used in other pending lawsuits against Fox, may have played as large a role in the decision to cut him loose as his on-air screeds.*

In addition to embarrassing, widely reported emails from Carlson that were publicly outed during evidence discovery for the Dominion case, some that were redacted but recently seen by Fox Corp.'s management and the board were so offensive that the board considered using an outside law firm to investigate Carlson, according to the Times. Carlson reportedly made vulgar, misogynistic remarks about at least one Fox News executive, as well as show guests and others. If media outlets succeed in challenging the redactions, the content could still be publicly revealed.

The pending lawsuits include one by former Fox News producer Amy Grossberg accusing Carlson and Fox of creating a hostile and discriminatory work environment (both have denied those accusations). Some of the content in the approximately 90 recordings she made during her tenure at Fox News has already generated sensational headlines, and was reportedly a key factor in the $787.5 million settlement Fox reached with Dominion. 

Fox also faces a $2.7-billion defamation suit by another voting software company, Smartmatic.

*Added after initial posting.