Federal Investigation Into Conduct at Fox News Widens

For the past several months, federal investigators from the Justice Department have been looking into allegations of misconduct at Fox News, and now that investigation has broadened to include financial crime experts from the U.S. Postal Service, according to CNN.

The initial investigation was reportedly triggered by revelations about financial settlements that were made by Fox News to multiple staffers who alleged they were sexually harassed by former Fox News chairman Roger Ailes, who has since left the company.

Investigators are said to be exploring whether Fox News declared these payments properly in its financial statements, or whether it disguised them somehow in order to avoid detection.

Justice Department staff have been interviewing those involved, including former employees at the network, for the past several weeks, CNN said. Investigators have been asking “how the shareholder money was spent, who knew, and who should have known.”

The Financial Times reported earlier this month that investigators were looking into the details of the payments and whether they were disclosed properly, and also said that U.S. Postal Service investigators were assisting with the case.

Two former Fox News executives told the paper that settlements to women who accused Ailes of harassment were not disclosed, and that payments were “moved around different Fox News budgets.”

In addition to the payments, CNN said the investigation is also looking into a group of individuals who were known collectively as “friends of Roger,” some of whom were on the Fox News payroll but had no official duties. One consultant reportedly earned $10,000 a month, but what he did in return for those payments is unknown.

New York magazine writer Gabriel Sherman, who wrote a book about Ailes and Fox News, has said that the former chairman maintained a kind of “black ops” team that was used to harass anyone Ailes didn’t like, including reporters, and that this team was paid using Fox News funds.

According to one report, Ailes used private investigators to try and dig up information on journalists, including former Gawker Media editor John Cook.

Ailes also reportedly paid a woman who pretended to date TV writer Brian Stelter (now at CNN) in order to try and get information about stories involving either himself or Fox News.

Whether the investigation will result in charges against Fox is unknown. The case was started by the Obama administration under U.S. Attorney Preet Bharara, who has since been fired. Billionaire Rupert Murdoch, who controls Fox News through the holding company 21st Century Fox, is said to have a close relationship with President Trump.

Murdoch is said to be concerned about the fallout from the Ailes harassment cases, as well as the more recent allegations against former host Bill O’Reilly, in part because he is trying to acquire control of British broadcaster Sky for $14 billion.

The proposed acquisition is currently being assessed by broadcast regulator Ofcom, and one of the criteria that regulators are considering is whether the Murdoch family would be “fit and proper” owners of the company.

In addition to the cases involving Ailes and O’Reilly, Fox News has been hit by a number of other allegations, including a lawsuit from former anchor Andrea Tantaros, who says Fox hacked into her personal computer and engaged in illegal surveillance of her.

For some, these allegations have echoes of the News of the World case, in which executives at the Murdoch-owned paper (which no longer exists) were found guilty of tapping into the phones of celebrities and politicians in 2011. The charges are part of the reason the Murdochs dropped a previous attempt to acquire control of Sky.

Taboola and Outbrain Said to be Talking About a Merger

You may not know their names, but chances are you’ve seen their work, down at the bottom of an article, on any one of a thousand online news sites. You might even have clicked on one or two of their suggested links, although you probably wouldn’t want to admit it.

Their names are Taboola and Outbrain, and their business is selling the recommended links that show up on websites run by hundreds of different publishers, both large and small (including Time Inc., which owns Fortune magazine).

The two companies, both of which got their start in Israel but are now based in New York, have been competitors for years, but now there are reports that they may be considering a merger.

A report of the talks first appeared on Thursday on a site called Calcalist, a business news publisher based in Israel. According to the article, Taboola and Outbrain are in “the advanced stages” of a merger proposal, having determined who will get what share of the equity.

The idea of a merger between the two companies is not a new one. As Calcalist explains, they have held similar talks twice before, with the last negotiations occuring in 2015. But the two sides could not agree on how the assets would be split.

The two companies are like mirror images of each other. Both were founded by Israeli entrepreneurs — in Outbrain’s case, it was Yaron Galai, who started the company in 2006, and in the case of Taboola (which got its name from the Latin term for a blank slate, “tabula rasa”) it was entrepreneur Adam Singolda, who founded the company in 2007.

Both rose to prominence by helping publishers of all kinds generate more traffic for their web pages. In some cases, media companies pay to have their stories included in the recommended link widgets both companies operate, while others are paid for the traffic they generate. Some do both.

The result can be lucrative for publishers that are struggling to make ends meet with digital advertising, and watching their print revenues decline precipitously. According to published reports, Time Inc. signed a deal with Taboola in 204 that was worth $100 million over three years.

As Facebook and Google have taken a larger share of the digital-advertising pie, however (recent estimates are that they accounted for almost all of the growth in 2016), pressure on Taboola and Outbrain has intensified, which may explain the revived merger discussions.

Concerns about the rise of “fake news” and clickbait have also caused a number of publishers to stop using the recommended link widgets produced by both companies.

According to Calcalist, the combined value of the two companies is estimated to be $1 billion, and that figure also says something about the changing market for their services. In 2015, Taboola raised funding that valued it at $1 billion, while Outbrain was also said to be valued at a similar amount when it was considering an IPO in 2013.

Facebook Admits it Is Being Used by Political Actors to Manipulate Opinion

Not that long ago, Facebook CEO Mark Zuckerberg refused to admit that the social network needed to worry about the rise of “fake news,” or the impact it was having on users, saying the idea that this might have influenced the U.S. election was “a pretty crazy idea.”

How times have changed.

On Thursday, Facebook released a report that effectively admits the social network has been used by both governments and non-state agents as part of a series of orchestrated attempts to manipulate public opinion about political issues, including the U.S. election.

Some of this has taken the form of artificially created “fake news” stories, as well as organized efforts to promote these stories and get them circulating as widely as possible.

In particular, the Facebook security team says it found evidence of a co-ordinated effort using fake Facebook accounts to spread a variety of information related to the U.S. election, including reports based on emails that were stolen from Democratic Party headquarters.

After the fake accounts promoted these stories, “organic proliferation of the messaging and data through authentic peer groups and networks was inevitable,” Facebook said.

U.S intelligence sources have tied this kind of activity to Russian agents acting on behalf of the government and other state entities in an attempt to influence the election, and Facebook’s report said that the security team’s information “does not contradict” this conclusion.

As a result, Facebook’s security team says it has expanded its focus away from traditional forms of abuse such as spam or malware, and will now pay attention to “more subtle and insidious forms of misuse, including attempts to manipulate civic discourse.”

So now that the giant social network has admitted that this kind of behavior is a problem, what does it plan to do about it? That’s where the hard part comes in.

The company says that it will suspend or delete accounts that are trying to engage in this kind of activity, after it identifies them using a combination of machine learning and the kind of threat analysis intelligence agencies use. The company said it has shut down more than 30,000 fake accounts in advance of the French elections.

But how will Facebook know for sure that the accounts it is targeting are actual malicious agents or affiliated with government entities, as opposed to just being normal Facebook users who happen to be sharing fake news or racist propaganda? That’s not clear.

The company described several types of behavior that it said were associated with these campaigns, including sending out friend requests using spoofed accounts with real names. These might be followed up with malware links, or used to map the networks of users who were seen as vulnerable to future hacking or social-engineering attempts.

Other techniques include the use of coordinated “likes” coming from multiple fake accounts, in order to boost the visibility of a fake-news story, as well as the creation and use of groups that spread propaganda mixed in with legitimate news stories.

“The inauthentic nature of these social interactions obscures and impairs the space Facebook and
other platforms aim to create for people to connect and communicate with one another,” the report says. “In the long-term, these inauthentic networks and accounts may drown out valid stories and even deter some people from engaging at all.”

As with many of the other things Facebook does, the primary intent is to maintain what it sees as “authentic” forms of interaction. But finding the line between authentic and inauthentic may not be as easy as the company thinks.

For example, some of the behavior the security team noticed wasn’t aimed at a specific political view. “We identified malicious actors on Facebook who, via inauthentic accounts, actively engaged across the political spectrum,” the report says, “with the apparent intent of increasing tensions between supporters of these groups and fracturing their supportive base.”

Flagging fake or spoofed accounts is one thing. But how do you differentiate between someone who is intentionally sowing political discord and someone who is just sharing fake news because it reinforces their existing biases? That’s the world Facebook finds itself in now.

Here’s Why All the Doom and Gloom About ESPN Is Overdone

Media watchers have been expecting significant layoffs at sports giant ESPN for some time now, and on Wednesday those expectations finally came to pass. According to multiple reports, the Disney-owned network let go more than 100 employees, many of them well-known names.

The reasons why ESPN had to take these fairly drastic measures are abundantly obvious to anyone who has been following the TV business. Like the rest of the industry, ESPN is a victim of “cord cutting,” as increasing numbers of people are either getting rid of their cable packages or signing up for alternative “skinny bundle” streaming services.

This trend has seen ESPN lose close to 15 million subscribers in the past several years, which has cost the company a significant amount of revenue. At the same time, the network is locked into paying billions of dollars every year for the rights to major sporting events.

There’s no question that this is all putting significant pressure on the network, and on its parent company, since ESPN contributes a substantial amount of money to Disney’s bottom line.

That said, however, some of the apocalyptic predictions about what this all means for ESPN are overdone. Is the company under pressure to cut costs? Clearly. Are traditional cable subscriptions likely to continue falling? Yes. But the network is not going out of business any time soon.

It’s true that ESPN has huge built-in costs because of the contracts it has signed for the sports rights, which require it to pay a total of about $8 billion a year. That’s more than just about any other media company pays for content — more even than Netflix, which is known for spending massive amounts of money to get the rights to movies and TV shows.

At the same time, however, ESPN also has contracts with cable and satellite companies that make it part of the core bundles those providers offer. The fees it charges have been going up steadily, and will continue to do so for the foreseeable future.

Plenty of subscribers are cancelling their cable or switching to services that don’t include ESPN. But the sports network continues to pull in the highest per-subscriber fee of any media outlet — about $8, according to industry estimates. And those fees are scheduled to continue increasing over the next few years.

There is one significant flaw in those deals, some industry watchers say, which has made the pain worse for the network than it might have been. During a round of negotiations with distributors in 2012, ESPN decided to push for higher per-subscriber fees, and in return it agreed to lower the bar when it came to being part of the core bundle.

Whereas ESPN’s deals used to require that it had to reach 90% of a distributor’s subscribers, the company agreed to lower that number to 80%, according to analysts. That meant cable and satellite companies could offer packages without ESPN to a larger number of subscribers.

These deals were seen as a way to guarantee the sports network’s future revenue growth, since they locked in higher per-subscriber fees. But ESPN was more vulnerable to the rise in cord cutting than it would have been had it not changed the terms of those deals, as cable and satellite companies started offering smaller bundles in order to hang on to customers.

According to some ESPN watchers, the network’s key mistake was that it never expected subscriber levels to actually fall. It expected growth to eventually slow, but it was unprepared for the significant losses that it has seen in the past couple of years.

Even with these changes, however, ESPN is still going to be pulling in billions of dollars in affiliate fees for some time to come, regardless of what happens to the subscriber levels at those carriers. And because of the massive interest in live sports in the U.S., it is arguably more protected from the shifting consumption patterns than just about any other content producer.

The network has also been cutting deals to distribute its content through a number of alternative streaming services, including Google’s new YouTube TV and Hulu’s streaming service, and is working on its own over-the-top offering as well, powered by BAMTech, the digital arm of Major League Baseball that Disney acquired a stake in last year.

That’s not to say ESPN won’t have to continue to make significant changes in the way it operates, as it has with the recent layoffs. The days when it was such a massive cash cow that it didn’t have to pay any attention to costs or spending are over, and core offerings like SportsCenter are under pressure from social media and other alternatives.

Overheated comparisons to the decline of the newspaper industry, however, are just that — hyperbole that lumps the sports network in with the decline of cable TV as a whole. The glory days may be over for ESPN, but it is still going to be a pretty good business for some time to come.

Here’s Why Twitter’s Stock Is Climbing After Its Earnings Report

Twitter has been beaten up pretty badly by investors over the past six months, after a number of potential acquisition offers failed to materialize and the company’s finances continued to sour. But its latest update contained a few rays of hope for those who still believe.

The most obvious of these bright spots was in the area of user growth. After several quarters of showing flat or anemic growth, Twitter said that it added 9 million new monthly average users in the latest quarter, the largest increase since 2015. That growth was much higher than expected.

When it comes to daily average users, Twitter doesn’t provide an actual figure, but it said the total grew by 14%, for the fourth consecutive quarterly increase.

With 328 million monthly users, the service still pales by comparison to either Facebook or Instagram. The latter announced on Wednesday morning that its monthly average user base hit the 700 million mark, up by more than 100 million in just the last four months.

And where did Twitter’s new users come from? Some company-watchers theorized that it was a delayed reaction to the election of Donald Trump, a noted Twitter devotee. But Twitter said it was a result of changes it has made to the way it displays a user’s timeline, such as showing tweets a user may have missed, instead of displaying them chronologically.

The good news helped push Twitter’s stock up by more than 11% on Wednesday following the report, the largest increase since the company was the subject of takeover speculation in October.

In classic Twitter fashion, however, the rest of the company’s quarterly news was much more of a glass-half-full, glass-half-empty kind of situation. For example, Twitter’s revenues fell on a year-over-year basis for the first time, dropping by 8% to $548 million.

Optimists, however, noted that this was better than most Wall Street analysts were expecting — they had been projecting a revenue decline of more than 10%. Twitter also managed to report earnings (excluding certain expenses) that were much better than expected, making 11 cents a share instead of the one cent most analysts projected.

At the same time, the company warned that revenue could be weak over the next few quarters, in part because Twitter is winding down a number of advertising products that weren’t performing.

The company’s forecast for the current quarter was significantly worse than most analysts were expecting. Twitter said it is looking for adjusted earnings of between $95 million and $115 million, but the consensus estimate from Wall Street is $141 million.

Instead of direct-response style ads such as Promoted Tweets, Twitter said it is putting more of its resources into video advertising, where it has had some success with major brands like Anheuser-Busch. But the benefit of investing more in that market could take some time to make it to the balance sheet, the company said.

Twitter is betting that it can become a place for live video streams of all kinds, including sporting events like soccer and baseball, as well as news events like the Grammy Awards and the election campaign, where it partnered with a number of broadcasters to stream their coverage.

The company said it streamed 800 hours of live video in the last quarter, and has a number of deals in the works to increase that number. Twitter is also said to be working on a way to allow cable subscribers to log in to their accounts so that they can watch cable programming through Twitter and also follow along with tweets about the content.

Although this focus appears to be paying off for Twitter in the short term, analysts note that when it comes to doing deals for events like the National Football League, the company is at a serious disadvantage compared with much larger players like Facebook and Amazon.

Google and Facebook Are Taking Almost All the Growth in Digital Ads

The Interactive Advertising Bureau has just released a report looking at growth in digital ad revenue in the United States in 2016, and the good news is that the market grew by more than 20% during the year, to a new record of $72.5 billion.

The bad news—at least for those who dislike duopolies—is that according to some estimates from industry experts, virtually all of the growth in digital advertising is going to Google and Facebook, which already account for more than three quarters of all the digital ad spending.

The IAB downplayed this phenomenon in its report, saying there has been a lot of “misreporting” in the media about how the two digital giants are taking most of the revenue growth.

“Some of the outside calculations we’ve seen being used by the media include revenues that go beyond the U.S., for example,” the IAB’s David Doty told Ad Age. “Another thing they don’t understand is traffic acquisition costs. And another thing they don’t seem to take into account is losses from some within the industry are actually hiding gains from a broader base.”

The IAB executive said that the top 10 digital players in its report only accounted for 69% of the growth, which means that 31% of that growth came from outside the top 10.

Jason Kint of advertising lobby group Digital Content Next has written in the past about how Google and Facebook account for virtually all of the growth in ad revenues. He said his latest estimates show the two taking 89% of the growth last year.

Pivotal Research analyst Brian Wieser, however, went even farther in a research note he sent to clients on Wednesday about the IAB numbers. Wieser said that according to his calculations, Google and Facebook accounted for almost 100% of all the growth in U.S. digital ad revenue last year.

The latest figures “highlight the degree to which Google and Facebook dominate the industry presently,” Wieser wrote, “as the two rose to capture 77% of gross spending vs. 72% in the year ago period, with 99% of industry growth attributable to the two companies.”

That’s up significantly from the previous year, when Wieser estimated that Google and Facebook accounted for about 65% of all the growth in the digital ad market for 2015 in the U.S.

In an email, the Pivotal analyst said that his projections are based on Facebook’s publicly released U.S. ad revenue numbers, as well as estimates of Google’s U.S.-based ad revenue (which the company doesn’t break out publicly). Those figures combined with the IAB’s totals show that the two have an iron grip on the ad market, he said.

While the numbers for Facebook and Google do include what are called traffic-acquisition costs or TAC—that is, money the two spend on marketing partnerships designed to drive users to their platforms—Wieser says that doesn’t change the fact that they still control a massive amount of the digital-advertising market in the United States.

“The big point is that if Google and Facebook are the primary interfaces to buyers, over the long-run they own the relationships and the related data,” Wieser said. “Every partner they work with is subservient.” In other words, their control remains intact.

Former Facebook Exec Says Government May Crack Down on Fake News

A former senior executive at Facebook warned on Tuesday that if the social network doesn’t do more to show readers accurate news and cut down on the “fake news” being distributed through the platform, government regulators could get involved.

Adam D’Angelo, a former chief technology officer at Facebook and now CEO of question-and-answer site Quora, made the comments at an invitation-only symposium in New York for members of The Information, a subscription-based news service co-founded by former Wall Street Journal reporter Jessica Lessin (Lessin’s husband Sam is also a former Facebook executive).

“You need to make readers of the platforms more aware of the true source of their news,” D’Angelo told attendees at the summit. “There’s not enough information about what source you’re going to. Government regulation at some point is a real option.”

According to a report at The Information, D’Angelo said that media companies have a huge incentive to create stories that are shocking, because that kind of content gets distributed widely on Facebook and other news platforms such as Twitter.

The Quora CEO called on Facebook and Twitter to structure their services so that media entities producing high-quality content will get more distribution and reach, rather than those producing low-quality clickbait or fake news. If they don’t, he suggested that the government might take an interest in helping force this to happen.

Adam Mosseri, the Facebook vice-president in charge of the news feed, told the Information summit that the company is taking a number of steps to address the problem. The social network has formed a partnership with fact-checking organizations, including Snopes and Politifact, and has also released a series of tips to help readers detect fake news.

Some of the ways in which Facebook is structured don’t help, however. A number of observers noted that while Facebook advises users to check the URL of the story, it also makes it difficult to do this by hiding or obscuring the address, because it wants to keep users on the platform.

In a recent 6,000-word manifesto he published on Facebook, Mark Zuckerberg said that Facebook is concerned about the quality of information that users get on the social network, and that he is committed to working to solve that problem. “We know there is misinformation and even outright hoax content on Facebook, and we take this very seriously,” he said.

Why I’m Skeptical of Jimmy Wales’ Crowdsourced Journalism Project

The name Jimmy Wales may or may not ring a bell, but you’ve probably heard of his most famous creation—namely Wikipedia, the world’s first “crowdsourced” encyclopedia, which launched in ** and now has ** pages filled with information on everything imaginable.

This improbable success helps explain why so many journalists and media analysts are excited about Wales’ latest project, an attempt to build a crowd-powered journalism site called Wikitribune, which launched on Monday. Similar efforts in the past, however, have all ended up as noble failures. Can Jimmy Wales manage to beat the odds a second time?

The way Wales describes the project is as a co-operative that combines the power of the crowd with the skills of professional journalists. The funding, he says, will come from donations, because the ad-supported model has created a “race to the bottom” filled with clickbait and fake news.

Money raised through the site will go to pay the salaries of journalists who work for Wikitribune, Wales said, with the initial goal of hiring 10 reporters. If enough funding isn’t received, any money raised will be returned to those who donated.

Ideas for stories that need covering will come from the crowd, Wales says, and then professional journalists will report and investigate those ideas, along with input from members or subscribers. Much like volunteer editors do at Wikipedia, these users will ensure that the stories are factual and not biased, and that no important details are omitted.

“The community of contributors will vet the facts, help make sure the language is factual and neutral, and will to the maximum extent possible be transparent about the source of news posting full transcripts, video, and audio of interviews. In this way Wikitribune aims to combat the increasing proliferation of online fake news.”

Skeptics of Wales’ plan note that a number of entrepreneurs and journalists have launched sites and services based on a similar crowd-powered approach to the news over the past several years.

One of the first was Spot.us, which was founded in 2008 by David Cohn with support from the Knight Foundation, and was designed to crowdfund news reporting on major stories. It produced a number of stories with large and small media partners, but never managed to get enough traction to continue and was eventually sold to American Public Media and later shut down.

Journalist and former Facebook managing editor Dan Fletcher co-founder a site called Beacon Reader in 2013 that aimed to use a community-funding model to allow journalists to pursue their work, but while it had some individual success stories, it never achieved scale and shut down last year.

A similar fate befell Contributoria, a crowdfunded journalism platform that was founded by Matt McAlister and backed by The Guardian. While it had some success, it failed to grow or become self-financing and it was shut down in 2015.

Grasswire was started in 2014 by entrepreneur Austen Allred, and while it didn’t involve crowdfunding, it was designed to be a kind of Reddit-style news community to which anyone could contribute. It still exists, but has never gotten much traction outside a small group.

Some journalists have managed to fund their own individual efforts through crowdfunding platforms such as Patreon, and writers such as Ben Thompson of Stratechery have created standalone businesses that depend on subscriptions from readers rather than advertising revenue.

There’s a big difference between this kind of individual effort and an organization with the kind of scale that Jimmy Wales appears to have in mind for Wikitribune, however, as Josh Benton of the Nieman Journalism Lab pointed out in a comment to the BBC.

“There’s certainly a model for non-profit news that can be successful if it’s done on a relatively small scale and produces a product that is unique enough,” Benton said. “But I have a hard time seeing this scale up into becoming a massive news organization.”

Part of the problem is that while journalists—and concerned observers like Wales—see the rise of “fake news” as a serious social problem, and are committed to helping find ways to combat it, it’s not clear that non-journalists feel the same kind of impulse. Nor is it clear that even if they do, enough of them will be willing to fund or get involved with such a project.

It’s true that a number of media entities like the New York Times and The Guardian have seen a rush of digital subscriptions since the election of Donald Trump as president, which appears to be driven by a desire for journalism that will address a number of social and political issues.

But can this impulse translate from being just a simple donation to an existing media entity, and become the kind of drive that convinces non-journalists to spend their time suggesting news stories, editing and fact-checking them, all for little or no reward?

As Thompson pointed out in a comment in his newsletter about Wikitribune, the single biggest argument in favor of Wales being able to achieve this seemingly impossible goal is that he has already effectively done that once with Wikipedia. It too was criticized as being a pipe dream, a vision that would never be realized because it seemed so unlikely.

“I don’t know if Wikitribune will work,” said Thompson. “But if it fails, it won’t fail because it lacks scale; if anything, it will fail because it didn’t figure out how to harness the scale that is the Internet. What I am confident in ascertaining is that whatever entity ‘solves’ news will look a lot more like Wikipedia than it does the New York Times.”

The history of such efforts may be littered with failures, which suggests there is reason for skepticism. But none of them had the kind of influence that Wales brings to a project. And like Wikipedia, perhaps his brand of crowdsourced journalism is an idea whose time has come.

Here’s What to Expect With the Changing of the Guard at Murdoch Inc.

The ignominious departure of former Fox News star Bill O’Reilly, like the earlier exit of his former boss, Fox chairman Roger Ailes, has focused a lot of attention on the Murdoch media empire. Fox News is one of the family’s key properties, and as a result there has been a frenzy of tea-leaf reading about what it all means.

One of the biggest questions for Murdoch-watchers is who came out on top in the latest battle of wills. Rupert Murdoch, the 86-year-old patriarch of the clan, was initially said to be unwilling to get rid of O’Reilly, despite a growing advertiser boycott fueled by news of multiple sexual harassment claims against the Fox host.

Sources told New York magazine that the elder Murdoch was resisting in part because “it would make it appear he was forced into a decision by the New York Times,” which uncovered payments to the claimants.

Rupert’s son James, however, who is CEO of family holding company 21s Century Fox, argued that it was long past time for O’Reilly to leave, in order to try and mitigate some of the longer-term damage done by the allegations and the advertising exodus.

Lachlan Murdoch appears to have initially sided with his father — who, like Lachlan, is co-chairman of the company — as he did when it was Roger Ailes whose head was on the chopping block. But eventually, Rupert agreed that it was probably time to get rid of O’Reilly, in part because he wanted to keep peace within the family.

According to Murdoch-watcher Michael Wolff, this victory in a battle of wills, combined with a similar victory in the Ailes case, is evidence that James has taken firm control of the company. While Rupert continues to give advice and has strong feelings about future direction, James is the one with his hands on the wheel, Wolff argues.

“If the expulsion of Ailes, and, even more dramatically, O’Reilly, mean anything, it means most of all that James is in charge.”

One question that flows from this is what kinds of changes the young Murdoch might want to make at Fox News. Wolff and others have reported that James is not a fan of the network or its politics — Wolff says he sees most of those who work at Fox as “Neanderthals.” Will he meddle in its affairs now that two of the company’s biggest names are gone?

The early signs are that James isn’t interested in making major changes, or at least that he is biding his time before making them. Tucker Carlson, who has replaced O’Reilly in the coveted 8 pm network slot, is seen by most to be a vote for the status quo rather than an attempt to do much to shake up the existing lineup.

Many Fox-watchers are skeptical that there will be any large changes at the network at all, for the simple reason that it makes a staggering amount of money for the Murdoch family. According to recent estimates, Fox generates more than $1.5 billion in revenue every year, or about 25% of the total at 21st Century Fox, and that buys a lot of freedom.

In fact, some critics of the network have argued that this financial windfall is one of the primary reasons why the kind of conduct that eventually sidelined Ailes and O’Reilly went on for so long. The understanding, according to New York writer Gabriel Sherman, was that Fox News executives had more or less carte blanche to run the company however they wanted to.

At the same time, however, the fallout from the toxic culture at Fox is unlikely to be limited to just the existing cases against Ailes and O’Reilly. Sherman says there are at least two more lawsuits coming that contain new allegations, and a group of black former employees are also said to be planning to join a lawsuit based on what they allege was discriminatory behavior.

James and his brother may be interested in changing the workplace culture at Fox so that it doesn’t get rocked by similar scandals. But will they want to make any changes to the political viewpoints or targeting of the network that makes them so much money? That seems less likely.

From a straightforward market standpoint, there’s no question that Fox News is catering to a rapidly-aging viewership. The average age of an O’Reilly viewer was over 70, which means that even within an already aging demographic — cable-TV viewers — the network skews old.

At the same time, however, older viewers are a highly desirable advertising group, and the network has the added appeal of being a must-watch for one particular conservative-leaning older man, namely the president of the United States, Donald Trump. A recent Washington Post story on his TV-watching habits said that both his staff and those who want to impress him routinely arrange to be interviewed on Fox because they know he will see it.

Wolff, for one, argues that James Murdoch has bigger fish to fry than meddling with a property like Fox News that is generating huge amounts of revenue. For one thing, he and his father both want to merge the British broadcaster Sky — which they trying to acquire the rest of for $14 billion — with 21st Century Fox, to create a truly global media brand.

Some Murdoch-watchers believe that the proposed acquisition of control of Sky, which requires approval from the British broadcast regulator, was one of the motivating factors behind the removal of both Ailes and O’Reilly.

According to this theory, the family didn’t want even the slightest hint of impropriety to affect the Sky bid — especially when there is enough attention already on the Murdochs’ history with News of the World and the hacking of private telephone accounts, an affair that caused them to drop an earlier bid for the company in 2011.

There’s little question that James Murdoch will ultimately want to put his own stamp on 21st Century Fox, and this could eventually extend to re-engineering Fox News and other assets. But for the moment at least, his attention appears to be mostly fixed elsewhere.

Why Charging WikiLeaks With Espionage Could Threaten a Free Press

U.S. prosecutors are said to be considering charges against WikiLeaks founder Julian Assange under the Espionage Act, based on the release of classified information from the CIA and the State Department. But press-freedom advocates say this would be a risky and potentially dangerous move.

According to reports from CNN and the Washington Post, the Justice Department is preparing to charge Assange for his role in the 2010 dump of diplomatic cables that were published by WikiLeaks, as well as a more recent release of the CIA’s library of hacking tools.

The Obama administration also considered charging WikiLeaks and Assange, but Justice Department officials at the time decided that doing so would be problematic, since WikiLeaks arguably did the same thing that journalistic organizations like the Washington Post do. This was referred to internally as “the New York Times problem.”

Assange has made a point of comparing his organization to traditional media outlets, saying in a recent opinion piece in the Post that his motive “is identical to that claimed by the New York Times and The Post — to publish newsworthy content,” and that WikiLeaks publishes material “irrespective of whether sources came by that truth legally or have the right to release it.”


A number of senior officials in the Trump government, however, argue that WikiLeaks is not a press organization at all, but a “non-state hostile intelligence service often abetted by state actors like Russia,” as CIA director Joe Pompeo referred to it in a recent speech.

Pompeo seemed to suggest that WikiLeaks aided and abetted the theft of classified information, saying Assange “directed Chelsea Manning to intercept specific secret information.” Officials are also said to be interested in comments made during Manning’s trial that suggested Julian Assange told her how to crack a password.

According to the Post, prosecutors are considering a range of charges against the WikiLeaks founder, including conspiracy, theft of government property and violating the Espionage Act. But unless the government could prove Assange or someone connected with WikiLeaks was actually involved in theft, such charges could run headlong into the First Amendment.


“Every time we looked at this, it’s hard to figure out how you charge Julian Assange with publishing classified information without setting the precedent that you charge reporters for doing the same thing,” former Obama-era DoJ spokesman Matthew Miller told Wired. “If he asked Manning to give him documents, or provided Manning with tools by which to get him those documents, well, reporters use a lot of those same tools as well.”

“Never in the history of this country has a publisher been prosecuted for presenting truthful information to the public,” Ben Wizner of the American Civil Liberties Union said in a statement. “Any prosecution of WikiLeaks for publishing government secrets would set a dangerous precedent that the Trump administration would surely use to target other news organizations.”

Despite the risks, Attorney General Jeff Sessions said at a recent news conference that Assange’s arrest is a “priority.” The government has begun to “step up our efforts,” he added, “and whenever a case can be made, we will seek to put some people in jail.”

Any prosecution of Assange would be “incredibly dangerous for the First Amendment and pretty much every reporter in the United States,” Trevor Timm, executive director of the Freedom of the Press Foundation, told Wired. “You can hate WikiLeaks all you want, but if they’re prosecuted, that precedent can be turned around and used on all the reporters you do like.”

Arresting Assange would also be politically difficult, since he is not a U.S. citizen and is currently being protected by the government of Ecuador. He has been living in the Ecuadorian embassy in London since 2012, after seeking asylum there in order to avoid being extradited to Australia to face a rape charge, which he claims is politically motivated.