After much speculation, 21st Century Fox’s press release formally announcing Roger Ailes‘ resignation at Fox News ended the days-long media circus. On Thursday, Rupert Murdoch was installed as interim CEO.
Earlier in the week, public outrage grew after Matt Drudge leaked a unsigned draft of Ailes’ exit agreement which included a $40 million parachute payment. The truth is Ailes’ resignation was probably his (only?) way of saving face, and guaranteeing that he got some of that money on the way out the door.
First you have to understand that, by resigning, Ailes took a gamble of sorts. The internal investigation into his alleged conduct by the law firm Paul Weiss, as far as we know, is still ongoing. If investigators finished their probe and found wrongdoing by Ailes, he would have been canned. On the other hand, if investigators came up with nothing, Ailes may have been able to keep his job. However, by leaving before the probe was completed, he guaranteed himself one thing: money.
“If he leaves now before a finding of wrongdoing, [21st Century Fox] would agree to pay him out under his contract (which apparently they have agreed to do). And they probably said to him if you don’t go now without a fuss and Paul Weiss concludes you engaged in wrongdoing, we will terminate you for cause and you get no additional payments under your contract,” attorney Mike Delikat told LawNewz. Delikat heads the employment litigation practice at Orrick. He is often hired by boards of directors to investigate similar claims.
“The best way for Fox to get this story off the front page is to have Roger leave. No doubt they went to him and said it was better to go now without regard to whether he ultimately will be found by the investigation to have engaged in wrongdoing,” Delikat said.
So, as you can see, for Ailes, it came down to a strategic business decision—and I’m sure a lot of pressure from the Murdochs to resign.
Ailes had to weigh the chances of the internal investigation coming out against him. If it did, he’d be fired, and probably wouldn’t get his nice parachute payment either. And given the stories that have leaked in the last few days, Ailes had good reason to worry that the investigation might not bode well for him.
Immediately after former Fox anchor Gretchen Carlson‘s filed her sexual harassment claims, Ailes denied the allegations as “offensive, wholly without merit.” However, in the days since Carlson’s lawsuit, information leaked that other female employees, including Megyn Kelley, told investigators that they were also alleged victims of Ailes’ unwanted sexual advances. Attorneys for Carlson announced as many as 20 women had come forward to them.
On top of that, Delikat explained, even if a full internal report was not complete, investigators with Paul Weiss likely gave an interim report to the board or senior management that gave indication of where the investigation was going. For example, if they were finding credible evidence that Ailes harassed women at Fox. Based upon the media leaks, and any information gleaned from investigators, Ailes made the only decision that would not only save his reputation (for now), but also likely guarantee him a payout.