O'Reilly sheds advertisers, but are they a factor in his 'vacation' plans?

Thanks to the economics of cable news, the loss of ad revenue may not matter much if the embattled host can maintain his audience.

Another day, another scandal at Fox News.

I am talking, of course, about Bill O’Reilly, and the news last week that he and his employer have paid $13 million to five women who accused him of sexual harassment or verbal abuse.

Since the New York Times broke the news, more than half the sponsors for "The O’Reilly Factor" have pulled their spots, according to Kantar Media. What does that mean in real dollar terms? O’Reilly’s hour brought in an estimated $119 million in ad revenue during the first nine months of 2016. And what’s left now are the direct-response marketers and other small-budget brands that normally do not align with a series as high profile as "The O’Reilly Factor." The natural assumption is it could be soon curtains for O’Reilly—an assumption bolstered Tuesday night by the news that the embattled host was taking a "vacation" that many observers assumed would be permanent.

But not so fast. There is a line of thinking, most notably represented in an April 5th Hollywood Reporter article, that suggests advertisers don’t really matter here. O’Reilly’s real value to Fox, according to this argument, is his audience size, not the advertising revenue. The bigger the audience, the more Fox News can charge the cable operators—and that’s where Fox really makes its money. And since news of the scandal broke, ratings for "The O’Reilly Factor" have actually increased by double digits.

Maybe it’s all those trade reporters tuning in to count advertisers. Still, there is no reason to believe the size of O’Reilly’s audience will decrease when the dust settles. They certainly did not for "American Idol" or "The Late Show with David Letterman" at the height of their scandals. And this is also not the first time advertisers have jumped ship on O’Reilly.

But a lesser-noted aspect of this uproar is what’s actually happened to O’Reilly’s missing sponsors. They may have left his show, but they haven’t left Fox News. Instead, they’ve simply moved their money to other shows. For now, that’s allowing the cable news net to peddle slowly.

Because we recently elected a president who’d suffered a similar scandal, my first instinct is to believe O’Reilly will survive this storm and remain at Fox News. President Trump has even defended O’Reilly, calling him "a good person" and declaring "I don’t think Bill did anything wrong." Shockingly, this didn’t seem to hurt either man—to say nothing of the hurt it must have caused O’Reilly’s accusers.

I remember the fracas when Bea Arthur as "Maude" had an abortion and controversial sitcom "Soap" debuted on ABC, both in the 1970s. I remember when ABC’s "thirtysomething" dared to show two gay men in bed after sex, and when Ellen DeGeneres came out on ABC comedy "Ellen." Yes, there is a qualitative difference between these "scandals" and O’Reilly’s alleged real-life harassment (O’Reilly denies all the allegations). But at the end of the day, they were controversies that scared away advertisers and spurred rumors of cancellation. But each time the result was quite the opposite. Ratings increased and advertisers ultimately returned.

Then there are the countless other celebrities who have moved on after a sex scandal: Tiger Woods, Hugh Grant, Woody Allen, Bill Clinton, and on and on. Didn’t we all, at some point, think these very different celebrities were all finished? I recall wondering if "American Idol" would continue after Abdul’s so-called liaison with Corey Clark, one of the contestants, and that was only in season two in what ended up being a 15-season run. Now, that just seems naïve.

But there is a difference here, and that’s the reputation of Fox News itself. O’Reilly’s scandal comes on the heels of the many accusations of misconduct that sent Roger Ailes packing. In all previous scenarios, the networks themselves were respected companies that weren’t suffering from a tidal wave of misconduct. With O’Reilly, Fox News is establishing a pattern. How long before those advertisers parking their spots elsewhere in the lineup get tired of the shenanigans and take their business elsewhere?

Maybe advertisers aren’t a factor for O’Reilly’s show. But you can bet they matter to Fox News, which might feel comfortable taking the slow road now. But advertisers will soon grow impatient, and I expect O’Reilly to be out soon. If it were up to me I would send him packing now. 

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