The Top-rated Fox News show The O’Reilly Factor, a subsidiary of Twenty-First Century Fox Inc (NASDAQ:FOXA) may no longer have the popularity it has been enjoying. Its anchor Bill O’Reilly is battling sexual harassment claims, which have already impacted the show. Records have it that close to 12 firms have pulled off their commercials from the program.
A report in the New York Times states that O’Reilly and his employer spent $13 million on five women trying to convince them to stop pursuing litigation. Several automakers among them Mercedes-Benz, Mitsubishi, Hyundai, and BMW are just a few of the defectors who have vowed to re-assign their advertisements. Drugmakers Sanofi and GlaxoSmithKline are also on the list as well as T Rowe Price, Constant Contact, Ainsworth, Untuckit, Credit Karma and the insurer Allstate.
O’Reilly is Fox News’ top revenue producer: What next?
Looking at the names of the defectors, it is clear that the show brings in an incredible amount of revenue. According to research firm Kantar Media, the show collected over $178m in ad dollars in 2015 and another $118.6m in the first nine months of 2016.
However, the allegations and defection hit hard on the shares of the 21st Century Fox because they fell 1.2% to $31.75 at the close in New York. In response to the allegations, the executive vice president of ad sales at Fox News, Paul Rittenberg said, “We value our partners and are working with them to address their current concerns about ‘The O’Reilly Factor.’”
The scrutiny of Fox News is beginning to have an impact on the business
Fox News, one of the most-watched cable news networks has been making headlines in the recent past for the wrong reasons. The exit of the former president of the network, Roger Ailes was as a result of a sexual harassment related scandal. Sexual harassment occurrences are not new at Fox, and are now hurting the business.
Apparently, the company has stood by O’Reilly who claims that the allegations are as a result of his prominence. According to an analyst at Bloomberg Intelligence, Paul Sweeney, O’Reilly’s job may not be at risk yet. His contract, which was expiring this year was recently extended.
In the meantime, Twenty-First Century Fox stock closed at $31.75 a fall of $0.40 or 1.24%.