Fox Business Network is spending more than $200 million on staff, studios and marketing as it launches into coverage of the nation’s economy, beginning Oct. 15.
Yet with less than a week to go, the Fox News Channel offspring had not completed its initial programming schedule.
Indeed, still on the table was whether to increase the amount of live programming it would put on screen weekdays, beginning at 5 a.m. (ET). Would it be 13 hours, or 14? “We may go to 7 p.m.,” said Roger Ailes, chairman and CEO of both cable networks, as well as Fox Television Station Group.
Ailes clearly has in mind bringing in recognizable names to pepper coverage. To wit:
- Alexis Glick, the FBN vice president of business news and former NBC Today and CNBC Squawk Box correspondent, will steer a morning show;
- Neil Cavuto, Fox News senior vice president and managing editor, who will continue to host cable’s top-rated business show, Your World with Neil Cavuto, will have an afternoon show;
- Dave Ramsey, a nationally syndicated radio talk-show personality, will appear in primetime, offering financial advice;
- Carly Fiorina, the ousted CEO of Hewlett-Packard, has been brought in as a contributor.
Other name arrivals could follow. Liz Claman, a former host of CNBC’s Morning Call, is expected to land: her non-compete clause expires the day FBN debuts.
Ailes also recently had lunch with disc jockey Don Imus, booted off MSNBC and New York’s WFAN air last spring for disparaging comments about the Rutgers University women’s basketball team. Imus may be about to resurrect his radio career on Citadel Broadcasting’s WABC later this year, and there were informal talks about a potential spot on FBN. But FBN officials emphasized no offer was made.
With many of FBN’s moves clouded in secrecy, exactly how the service, which vows to be as accessible to Main Street as Wall Street, would distinguish itself from CNBC retained the air of an Alfred Hitchcock mystery. The players and their intentions were in plain sight, like Dial M for Murder. But how the deed would be carried out remained hidden.
Ailes, for instance, said last week he was “not sure” if any of the top business shows on cable that air on FNC, including Forbes on Fox and Bulls & Bears, would be repurposed on weekends on FBN.
In addition to programming featuring Cavuto, Glick and Ramsey, the only other show that had been identified at press time is Happy Hour, which has been under development since July. The title, if anything, gives a glimpse of how Ailes hopes to broaden interest in business beyond conventional market coverage — and how the competition with CNBC may play out.
The show, set for weekdays at 5 p.m., stars Rebecca Gomez and Cory Willard speaking about the business day with traders at Manhattan’s Bulls and Bears tavern.
Fox officials said CNBC found out about rehearsals and launched a segment by that name on Fast Money on Oct. 4, where it would visit different bars in search of business insights. On Your World the following day, Cavuto chided CNBC as he played a clip of Gomez and Willard at the bar.
CNBC president Mark Hoffman said the segment was not a reaction to FBN. “The show has been on the drawing board,” he said. “We want to take the opportunity to talk to traders about the business day in great watering holes across the country at 5 p.m.”
Such moves explain why Cavuto cops to being “deliberately reserved” about FBN content. “If we speak, it ends up on our competitor’s air,” he said.
What Cavuto did talk about was the tone of the network, “what it will look like, sound like.” He pointed to FNC’s top five business shows, which also include Cashin’ In and Cavuto on Business, as being distinct, but sharing a common denominator.
“They are jargon-free, devoid of buzzwords,” he said. “Certainly, we want to appeal to brokers and CEOs, but we have to broaden the audience. My broker friends say to me it’s all about EBITDA, all the time. Well, I’m into multiples and dividend yields as much as the next guy, but you have to speak English. It can’t be too much inside baseball.”
Cavuto said context will also be a key differentiator.
“The news will not be in a vacuum. Why did this CEO resign and what is the impact on market conditions; it will be about this war and its effect on energy prices; how business scandals drive the market down. It’s about going deeper and how things correlate.”
Other clues can be gleaned from the channel’s teaser Web site, Foxbusiness.com. “Wall Street” and “Main Street” are the same street, it declares. There’s a hint that there will be news that addresses “the problems small business owners face.” And, there are profiles, clips and sound bites from network’s on-air personalities.
Meanwhile, Fox officials contend that many of CNBC recent changes — the introduction of its own Happy Hour segment, its recent talk of Main Street, the new tag line of America’s Business Channel, a revamped Web site and new graphics package — were made to gird up for FBN’s arrival.
On Oct. 10, CNBC debuted a metric-laden HD service and retooled its “after-market” schedule.
CNBC officials said “absolutely none” of those changes were made with FBN in mind.
Ratings-wise, CNBC said it has averaged 85,000 adult 25-to-54 watchers in its business day period (5 a.m.-7 p.m. ET) year to date, a 31% gain over 2006 levels and its best performance with the demo since 2003. Among total viewers in the daypart, CNBC said it was ahead 16% to 247,000.
In response to a question about Fast Money, On the Money, Mad Money and morning show Squawk Box repeatedly “scratching” — registering fewer than 50,000 viewers in the target adult 25 to 54 demo — throughout September, Hoffman replied: “We’re not hung up about ratings. We have the most affluent and best-educated audience. Nielsen is not set up or inclined to measure those who watch CNBC on the trading floor, in the office, in health clubs and in fine restaurants.”
Hoffman declined to directly engage in queries about FBN taking a run at CNBC. “We’re stronger than we’ve ever been,” he said. “We’re proud of our past and excited and confident about the present and the future.”
By one internal poll, the average CNBC viewer has a personal worth of $2.7 million.
That may be part of the reason Hoffman could point to a gain of 23% to 25% in the upfront advertising market and to high margins. He said the network, which had estimated advertising and affiliate revenue of some $500 million, had its “biggest net profits” in 2006 and was on pace to surpass that plateau in 2007. Industry executives said that total could approach the $300 million mark.
But Ailes isn’t worried about how strong CNBC currently is, or how soon this challenge pays off.
When he launched Fox News in 1996, CNN was the seemingly unassailable king of cable news. Sanctioned by News Corp. CEO Rupert Murdoch, the indefatigable media empire builder, the network’s combination of news with flashy graphics during the day and opinion shows in primetime surpassed CNN in the ratings in January 2002. FNC hasn’t looked back since: it counts 1.5 million viewers on average year to date in primetime, nearly double CNN’s 775,000.
While Ailes launched Fox News with just 10 million households, FBN is set to debut in some 30 million homes.
That is less than one-third of the 94 million U.S. households CNBC can reach.
Ailes thinks FBN doesn’t have to reach as many households as CNBC, to catch it. You do need, he says, “a good product.”
“But I’m not sure if you need 90 million” households, he told Multichannel News last week. “I think at 50 million to 60 million we can give them a real run for their money.”
And if anyone knows what it takes to make CNBC tick — or tick it off — it is Ailes, who was named the network’s president in 1993.
When Ailes left CNBC in 1995, the financial network was in 56 million homes and he contends that even today, CNBC does not match the ratings it posted under his watch. To that end, Nielsen data shows that despite a 69% increase in distribution to 94 million homes from the fourth quarter of 1995, average viewership and its adult 25-to-54 audience declined 5% and 13%, respectively, on a total-day basis compared to this year’s third quarter.
So, when does Ailes see the upstart toppling CNBC.
“I never predict offensive goals,” he said. “There are too many variables” to give a definitive time. But he was confident about the outcome. “We’ll do better in the end.”
But history doesn’t necessarily repeat itself.
“The reason and business model for CNBC is to attract affluent viewers that don’t watch much other TV,” said news watcher Andrew Tyndall, who monitors the sector through the Tyndall Report. “To the extent that FBN is going to try and go consumer finance rather than high finance, well CNNfn already tried that and didn’t make it.”
That 30 million-subscriber service was shuttered in December 2004.
CNBC also is on its toes from the get-go, Tyndall said.
“Fox News came after CNN with a very dynamic approach and appearance. It had an ideological edge,” he said. “CNN was ambushed by FNC. That’s not going to happen here.”
CNBC, instead, he notes, has been planning ahead for the arrival of FBN, reorganizing its graphics, revamping its Web site, offering an HD service. Actually, it will be offering its standard picture in HD, adding constantly updated financial figures on the portion of the screen opened up by the wider aspect ratio of HD broadcasts.
In taking that second run at an entrenched competitor, FBN is sharing some infrastructure, some on-air talent and senior-management resources in the newsroom, and in the affiliate- and ad-sales disciplines with FNC.
And most of the marketing portion of its $200 million launch budget won’t really kick in until the product becomes more established.
Given that the network last week was still trying to resolve its initial programming lineup, when the product will settle into a regular shape is unclear.
For his part, Ailes expects to be making changes on the programming side, perhaps from day one. “Dwight Eisenhower said plans are useless, but planning is indispensable. Well, no plans survive when you hit the beach,” he said.
And since the network won’t be Nielsen-rated until sometime next year, he said the feedback FBN has to rely on “will come from the business community and our instincts and the press.” And that might not be representative of what viewers like about it. “They’ll probably hate us; they hated Fox News for the first two years,” he said.
Moreover, change is clearly already being baked in by Ailes’ boss, Murdoch, whose $5.6 billion acquisition of Dow Jones & Co. will, upon completion, put The Wall Street Journal under the same ownership.
But what changes will unfold can’t be determined at this stage. “We didn’t design the launch with the Journal in mind, and we don’t have it at launch,” Ailes said. “It’s unclear when we get Dow Jones and resources are blocked when we do.”
CNBC has a deal in place to keep financial reporting from The Wall Street Journal on its air through 2012.
But Murdoch said at the Goldman Sachs Communacopia conference in New York last month: “There is no reason we can’t have Wall Street Journal [reporters for] political, national affairs, international affairs, lifestyle and travel.”
Hoffman said CNBC has had a great relationship with the Journal for 10 years that has produced very high-quality material. “We fully expect for that to continue over the next five years,” he said.
In fact, Ailes expects “a Journal tsunami” from CNBC, saying the parties have had a long relationship and he’s interested to see if the network “can make it work now.”
And what does News Corp. executives think of FBN’s progression?
They leave the mystery product pretty much on its own. “You know with Mr. Murdoch, he takes an overview,” Ailes said. “He finds and hires good people, makes some suggestions. Both Murdoch and [News Corp. president and COO Peter] Chernin have been asking, 'Do you need anything?’ ”
But, that could change. “I’m sure they’ll weigh in after we go on the air,” he said.
They won’t be the only ones.