© Reuters. FILE PHOTO: Fox personality Tucker Carlson speaks at the Business Insider Ignition: Future of Media 2017 conference in New York, US November 30, 2017. REUTERS/Lucas Jackson/File Photo
By Aditya Soni and Nivedita Balu
(Reuters) – Superstar host Tucker Carlson’s abrupt exit from Fox News is likely to hurt ratings in the short term, but could prompt more major advertisers to consider the network they have ignored for being too partisan, investors and analysts said.
News of his departure on Monday wiped out nearly $1 billion from the market valuation of the network’s parent company, the Rupert Murdoch-controlled Fox Corporation. The stock also closed lower on Tuesday.
“It’s a huge deal,” said Matthew Tuttle, president of Tuttle Capital Management, an investment firm that is betting against Fox stock.
“8 p.m. is important and they’re going to lose viewers in that spot. They need to find another Carlson, that’s going to be the problem. They need to pull a rabbit out of the hat.”
The conservative-leaning primetime Carlson Show was the highest-rated news program in the 25-54 demographic on Fox News Channel – America’s most-watched cable news network. Overnight viewers averaged about 3.4 million in March, according to Nielsen.
Until a new host is named, Fox News plans to replace the show with a spin-off that will be run by a rotating group of personalities from the network.
A company spokesperson said Fox News has held the top spot for 22 years and that Monday’s show was not only ahead across the board, it grew from the last show Carlson hosted, pointing to Nielsen data that showed it drew about 2.6 million viewers.
“the long game”
Brandon Nispel, an analyst at KeyBanc Capital Markets, said Fox News is in “rebuilding mode” and it will likely take some time for the stock to recover as viewership takes a hit. He added that the market depreciation “seems fairly high.”
“We wonder what Fox would say to advertisers. It’s possible that the advertisers who were looking for that audience might have limited other options for watching conservative news without being so misrepresented.”
However, Carlson’s exit may prompt more mainstream advertisers to consider the network.
“The long game here is probably the advertising game. Highly partisan cable news shows — on both sides — have poor advertising and a questionable ad mix,” said Douglas Arthur of Huber Research Partners, noting that direct response ads seem to make up a lot of ads.
Fox Corp. CEO Lachlan Murdoch, on a recent earnings call, called out direct response advertising — which involves delivering a direct marketing message to a potential customer — as particularly soft.
“A shift away from bigoted, conspiracy-less ‘pillows’ material may start to re-attract big advertisers,” said Arthur.
Some advertisers who have been on the fence could now be more open to Fox News, media analyst for Madison & Wall consulting firm Brian Weiser said.