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DNC Chair Will Not President Over Convention; Roger Ailes Resigns from Fox News; What is the Future of Fox News? Aired 11a-12p ET

Aired July 24, 2016 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[11:00:10] BRIAN STELTER, CNN ANCHOR: Hey, good morning from Philadelphia. I'm Brian Stelter. And this is RELIABLE SOURCES, our weekly look at the story behind the story, of how news and pop culture get made. We are live here on the floor of the Wells Fargo Center where the Democratic National Convention will begin tomorrow.

We're going to start on that topic because we have some breaking news about exactly how this convention is going to go forward. As of yesterday, Debbie Wasserman Schultz was going to be the permanent convention chair and give a prominent speech at the podium behind me. But we're now learning that the chair of the Democratic National Committee will not be taking her expected role. She will not be gaveling in and out the proceedings of the convention. In fact, she probably won't appear on the stage at all, even though she's a leader of the Democratic Party.

This is happening as pressure mounts on Wasserman Schultz to step down, to resign from her leadership post amid fallout from the e-mails revealed in the DNC leaks controversy this week.

Now, if you're not familiar with what I'm talking about, let's get an explanation from CNN's Jeff Zeleny. He's on the phone with me now here in Philadelphia.

And, Jeff, let's start with exactly who it's going to be taking her position as the permanent convention chair?

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT (via telephone): Well, Brian, Congresswoman Marcia Fudge, she's a Democrat of Ohio, has been selected by party leaders as the convention chair. That means she will be the one on the podium welcoming the delegates, she will be the one gaveling it in and out, the business section of this convention. She will be a visible role here. Of course, she's a strong supporter of the Clinton campaign.

And this is all coming in response to an uproar over the reports of leaks from the Democratic National Committee from staffers who were favoring the Clinton campaign over the Bernie Sanders campaign. Now, this was coming just as the peace accord was really being reached between the Clinton campaign and the Sanders campaign on the eve of the convention here, but the release of these e-mails, the leaked e- mails clearly questioning Bernie Sanders religion in some respects, his capability for office have blown up that piece of work.

Now, officials from the Clinton campaign, the White House, other Democrats are urging Debbie Wasserman Schultz to basically not be seen here in Philadelphia and vacate her position to move this forward. I am told by party officials, party sources she is not inclined to do that at this point, but discussions are underway right now.

STELTER: How embarrassing is this for her on the eve of the convention?

ZELENY: It's really an embarrassment for her. She has withstood a lot of controversy during her time at the DNC. So, she was going to try and get through this convention. But it definitely is a black eye on the party and the convention going into what they were hoping would be a united convention.

So, that's what they're trying to do here, sort of get this taking care of this before the convention begins tomorrow.

This is very much internal party business. This is not something most voters in America probably are concerned about or even aware of what's happening. But in terms of the -- just the idea of a party chairwoman, the leader of the party not being on hand at a historic convention, where the first woman is to be nominated to be president is pretty extraordinary. But they're trying to clean up this internal mess, this family feud, if you will, before the convention begins tomorrow.

STELTER: CNN senior Washington correspondent Jeff Zeleny -- thank you very much.

Coming up later this hour and also next hour on "STATE OF THE UNION", we will have more on this leak controversy. Obviously, this week here at the Wells Fargo Arena, it could have huge consequences for the election.

But there's something happening outside this hall that could have just as big an impact on what happens in November. Roger Ailes, the founder father of FOX News, out of a job. And this is more than just an executive shake-up, it's the end of era.

Until he resigned under pressure on Thursday, amid allegations that he sexually FOX employees, Ailes was arguably the most powerful man in media. He reshaped television and politics, in some ways merging the two, by teaching Presidents Richard Nixon, Ronald Reagan and George H.W. Bush on how to use TV, and then by joining forces with Rupert Murdoch in 1996 to launch FOX News.

With FOX, Ailes upended cable news. You might say he ran a permanent campaign, lifting Republican candidates and supporting conservative values, an antidote to what he called liberal media bias. He called the channel "fair and balanced", others called it a cynical manipulation.

But there's no denying FOX and Ailes changed U.S. media. That's why he's cheered by some, but reviled by some who will be at the convention this week. And that's why this week was so shocking.

[11:05:01] Thursday, as Ailes' long time friend Donald Trump steps up, accepting his GOP's nomination, Ailes steps down.

The question is, will the two men now team up to defeat Hillary Clinton?

This morning, we have special coverage of this historic week in media, including an interview with a reporter who saw this coming, plus one of Ailes potential successors and my brand new reporting of what's next for Ailes and what's next for FOX.

But let's begin some big picture perspective, some analysis you're not going to hear on FOX News today, with former FOX News contributor Jane Hall, a professor at American University, the CNN political commentator and Trump supporter Jeffrey Lord. And here in Philadelphia with me, political analyst Jeff Greenfield.

Jeff, when you take stock of Roger Ailes legacy, his impact on media, do you think we would have Donald Trump as the GOP nominee without Roger Ailes?

JEFF GREENFIELD, POLITICAL ANALYS: I'm not sure I can say that. But what I can say think is that Roger Ailes did do the media what Donald Trump did to the political process. He found what the economists called a marked inefficiency, and audience was not being served, that had come to believe after 30 years of argument on the part of the right, that the mainstream media as a whole was unfair.

And it's a mark of his success, not just the enormous profits, that here you have a company owned by a very prominent right wing media tycoon, run by a guy who was a Republican operative much of his life and they can call themselves "fair and balanced", and they have a large audience that says, yes, you are. What I found out and have been reporting, I have often been told, I only talk to FOX News, at places like tea party rallies.

That's what he did. It's an enormous, enormous impact.

STELTER: Jane Hall, as someone who was on FOX's media analysis show for a number of years, what was your personal reaction to this news of Ailes resigning under pressure? Did you ever think he would leave in a circumstance like this?

JANE HALL, PROFESSOR OF COMMUNICATION, AMERICAN UNIVERSITY: No, I actually think it's a good day for women in FOX News and also for women in television. You know, I hesitated actually to write about my time on FOX News because I did not experience this personally.

And it's sad to me that all these women who were coming forward, since I wrote my piece, if these allegations are true, there was a culture there and a fear of reprisals that I hope this is significant that FOX has moved to have a man who is making a billion dollars a year for them step down.

Now, how far away he goes, is one question I have. But I do think that he had an enormous impact. I think that you would not have Donald Trump without Roger Ailes because he created a bifurcated media environment that put pressure on CNN to, you know, have, even during the Iraq war, they called people unpatriotic, they said Hillary Clinton is crook, Obama is soft on terrorism.

There's been an absolute alliance of this network and he is such a brilliant man that they have been enormously successful at painting everybody else as unfair and themselves as fair and balanced.

STELTER: We will explore the harassment allegations in more detail as this hour goes forward. Ailes has repeatedly and vehemently denied the allegations, even as more women have come forward, both on the record and anonymously.

Let's explore this point about Trump a little bit more with Jeffrey Lord.

Jeffrey, let me show what Donald Trump said on NBC's "Meet the Press" this morning, talking with Chuck Todd about the possibility that Trump could actually seek guidance and advice from Roger Ailes. Here's the clip.

(BEGIN VIDEO CLIP)

CHUCK TODD, MODERATOR, MEET THE PRESS: Roger Ailes, is he helping you? Is he advising you?

DONALD TRUMP (R), PRESIDENTIAL NOMINEE: Well, I don't want to comment, but he's been a friend of mine for a very long time. And I can tell you that some of the women that are complaining, I know how much he's helped them and recently, when they write books are fairly recently released, and they say wonderful things about him. And now, all of a sudden, they're saying these horrible things about him. I

It's very sad, because he's a very good person. I have always found him to be a very, very good person. And, by the way, a very, very talented person, look what he's done. So I feel very badly.

But a lot of people think he's going to run my campaign.

TODD: Yes.

TRUMP: My campaign is doing pretty well.

(END VIDEO CLIP)

STELTER: Jeffrey Lord, the reality is Ailes and Trump speak all the time. They were counseling each other this week, according to my sources.

Do you believe that it's possible Ailes would take a more formal role with the Trump campaign and should he?

JEFFREY LORD, CNN POLITICAL COMMENTATOR: It's possible. I have no inside information on this. But sure, it's certainly possible. You know, as somebody who worked for Ronald Reagan, let me recall that

in 1984, Ronald Reagan lost his first debate to Walter Mondale, did very badly, and they were very concerned about the second debate. They called in Roger Ailes who sat the president down and stayed, "Mr. President, forget the details, you are a person of themes, talk about your themes, relate every question to one of your themes and stick with that." He did, he won the debate and Roger Ailes scored again.

So, he's very, very good at campaigns and certainly, Donald Trump could do a lot worse than getting advice from Roger Ailes.

[11:10:05] STELTER: When you think about the impact of FOX News on conservative media, Jeffrey, how much do you put it into the perspective for viewers who don't study this every day?

LORD: Yes. I mean, it's had an enormous impact, an absolutely enormous impact for the good.

Here's the question, Brian, I think, you know, George Harrison, the late Beetle, had an album, solo album called "All Things Must Pass". And whether Roger Ailes was leaving FOX because of this sexual harassment business, or whether he just retired in a few years, the thing is with companies, media companies, any company, somebody brings the dream to life and then eventually they pass. That's the question.

I mea, this is now the transition time for FOX News. Will somebody there have the political sense that Roger Ailes had? I mean, we're not going to know. And we will find out for sure.

But this is inevitably what happens -- Roger Ailes and Rupert Murdoch will eventually pass from the scene. They will be handed it on to others and we'll see what they do with it.

STELTER: Jeff, what's your answer to that? Someone who's been in television newsroom for decades, can someone pick up the reins from Roger Ailes and who can keep FOX going, or will the channel really be challenged now without him?

GREENFIELD: It seems to me that there's a choice because FOX News is a hybrid. You know, it's not monolithic. You've got real news people there like Chris Wallace, like Bret Baier, Carl Cameron. You've got in effect pamphleteers, megaphones for the right like Sean Hannity, the angry guy at the bar like Bill O'Reilly. And then you've got "FOX and Friends", the only thing about which I can say is, if ignorance is bliss, it is the happiest show on television.

So, you've got this enormous mix and I think it's -- I guess Murdoch sons, maybe Rupert Murdoch himself to say, OK, do we want to make it a little less opinionated, do we want to make sure we don't alienate our audience which is fiercely loyal? And that's the question. You certainly find cases where the founding fathers and somebody mothers pass on and the inheritors either blow the legacy or expand.

And if I can invent a brand new journalistic phrase, Brian.

STELTER: Let's do it. GREENFIELD: Only time will tell.

STELTER: Only time will tell. I mean, speaking of someone who's covered FOX for a decade, and speaking of one of its rival channels CNN, I don't see FOX really suffering, at least in the short to medium term as a result of this.

But, Jane, before we have to go to a break, let's not lose sight of that harassment allegations, what this means for women in television newsrooms, and newsrooms broadly. Is your takeaway from this story, setting aside the fact that Ailes has denied the allegations, but that many women have come forward, is your takeaway that FOX News, even through the years you worked there, were on the air there, has a toxic workplace for female employees?

HALL: Well, you know, as I said in my piece to "The New York Times," I could only speak to what I saw on the air. And I cringed when I saw women in very short skirts, next to a fully clothed male anchor, and I did not experience that. And I was allowed to say what I thought of FOX News on our little media show until felt that there was a heavy thumb coming down on us and they didn't feel the need for debate.

So, I can't speak to a work environment. I can only say that these women who are now coming forward said they feared reprisals. And women in general have been required -- I mean, you can't say this means they were sexually harassed, but women, quote/unquote, "knowing" that they needed to dress a certain way, is demeaning to women. And it has become I think something that people may now look at and go, "Gee, you know, maybe we shouldn't have that," and the younger Murdochs took these charges seriously.

I mean, this is a lawsuit that's been filed. Somebody talked about it, you know, as was this a frat boy atmosphere. Again I didn't see it, but I saw on the air something that I hope we'll see less of, which is women looking in a situation where they do not have the power that the man who's fully clothed next to them does. I mean, it's a symbolic thing, but I think it's important.

STELTER: Our three J's here, Jane, Jeff and Jeffrey, thank you all for being here this morning. There are more questions about this story. But we're going to get some of the answers in the next break.

A list of women claiming they were harassed by Roger Ailes has been growing, but it was Megyn Kelly's admission that set the stage for his departure. Fresh reporting from our panel right after this.

(COMMERCIAL BREAK)

[11:18:04] STELTER: Hey, welcome back to RELIABLE SOURCES, live from Philadelphia, a sultry city today, temperatures in the 90 degree mark and above.

Lots of reporters, thousands of them entering the arena here, and the party started little bit earlier. During the commercial break there, just a few balloons falling from the arena, the Wells Fargo Center, where this convention will officially start tomorrow. Journalists, of course, all over this place already as final preparations are made for the convention.

We're talking about Roger Ailes resignation today, a seismic week in media. If you think back to 15 days before Ailes resigned, that's when ex-anchor Gretchen Carlson sued Ailes alleging sexual harassment and retaliation. That day, Rupert Murdoch, the patriarch of 21st Century Fox, said he had full confidence in Ailes, but he also said the company would undertake an internal review.

That review by an external law firm found other allegations of harassment, by other women, most of them speaking anonymously, some because they had non-disparagement clauses that forbid them from speaking negatively about Ailes.

Earlier this week, "New York Magazine's" Gabriel Sherman reported the 9:00 p.m. host Megyn Kelly was one of the women who alleged harassment. Kelly has not spoken publicly about this. Her lawyer said she will not until the review was completed.

But by midweek, it was the clear that the Murdochs were not going to stand behind Ailes, that they decided he had to be let go. So on Thursday, Ailes tendered his resignation, under pressure and facing the possibility of being fired.

This was a media world earthquake and the aftershocks are still being felt.

So, here to walk us through the effects are CNN media analyst Bill Carter, CNN senior media and politics reporter Dylan Byers, and as I just mentioned, Gabriel Sherman, who's the national affairs editor for "New York Magazine", and the author of the biography of Ailes, "The Loudest Voice in the Room."

Gabe, let me start with you. You were alone and out front on this story. You reported that Ailes was going to be leaving earlier in the week, you said the Murdochs had made a decision.

[11:20:00] Frankly, other reporters were not able to match that. Tell me first -- do you believe that you played a part in Ailes' departure? Were you receiving leaks from the Murdochs perhaps trying to force him out of the channel he founded?

GABRIEL SHERMAN, NATIONAL AFFAIRS EDITOR, NEW YORK MAGAZINE: Uh-huh. Well, clearly, Brian, as you and any other reporter would, you know, I can't get into my anonymous sources who were briefed on the investigation. But what I can say is that this was really something that the Murdoch family, once they realized the scope of the sexual harassment allegations, decided that they had to get Roger Ailes out of the company. The question was not if but when, and that's when I decided -- I had the reporting that was solid enough to go with the fact that they had made that decision.

STELTER: Some people believe this was a pretext for the Murdoch sons, James and Lachlan, who wanted to remove Roger Ailes, who didn't want him running FOX News anymore, they grabbed on to these harassment allegations as a pretext or an excuse to remove Ailes. Do you believe that's the case? SHERMAN: Well, I clear -- I think it's too early to tell. And I

think that's, you know, possibly there's may be some truth to that, but that's also possibly a cynical reading of it because we can't, you know, really dismiss these allegations. They are frankly shocking and we're learning now more and more every day, I have a reporting this morning, that more than 25 FOX News women have gone to the law firm Paul, Weiss to describe instances and episodes of sexual harassment.

This is really about a culture that Ailes enabled that was incredibly hostile to women. And the Murdochs, whatever their feels about Roger Ailes, once they realized that this was going to become public, they were not in -- there was nothing else they could do but get him out of the company.

STELTER: Now, Dylan, you and I were in Cleveland, with Gabe here covering the story all week, talking to FOX News sources. Do you believe that the report of Megyn Kelly being harassed was the turning point? That once it was out that she said to the investigators she was harassed, that Ailes' tenure was over?

DYLAN BYERS, CNN SENIOR REPORTER FOR MEDIA AND POLITICS: I don't think it was a turning point from a legal standpoint. I mean, you look at just the sheer numbers of people who have accused Roger Ailes of some sort of harassment or mistreatment, and just purely as the legal issue, obviously, the Murdochs were going to have to move to do something about that.

I do think however in terms of sort of the public narrative, that it really mattered, because first you had Gretchen Carlson coming forward, making her allegations, and you had a slew of FOX News talent coming to Roger Ailes' defense. You also had other women coming forward, many of them anonymously, many of them who talked to Gabe Sherman, but you didn't have someone within the network, a powerful talent within the network making these accusations.

So as soon as that report came out about Megyn Kelly, I think in terms of the public narrative, that played a big role. I want to go back to the question you asked Gabe though about, you know, whether the Murdochs used this as sort of a pretext to get rid of Roger Ailes.

STELTER: Right.

BYERS: I think that the Murdochs have a complicated relationship with Roger Ailes. I certainly know that, you know, James Murdoch and Roger Ailes aren't best of friends. That said, this guy was running an incredible business for them. He was bringing in a billion dollars a year in free cash flow. I mean, just in profit.

So, you know, from business perspective, the Murdochs, especially the sons, are fundamentally business people, and I don't think they were ready --

STELTER: Right.

BYERS: -- to sort of jettison or cause chaos at a network that was bringing in a billion dollars in profit here. STELTER: It's not just a media story. It's a business story, rarely

in corporate America do we see 15 days like this.

Bill, let me bring in on this as well. Our former colleague at the "New York Times" are reporting this morning, they spoke to more than a dozen women who alleged harassment, not just by Ailes but importantly by other supervisors, they paint a picture of a toxic newsroom culture. Is that where this story is now going, that it might not just Ailes who would be departing but other executives as well?

BILL CARTER, CNN MEDIA ANALYST: Well, it sounds like that's a possibility. I mean, names are being put out there of FOX executives who are also in the position of harassing women. But you have to say that it does go to the issue of whether there was a culture created.

You know, one of the things people have said about FOX News was that it created a sort of a separate universe, where you could sit and watch a certain point of view coming at you all day long, and I think that universe, in that universe, which was very male-oriented, you know, it was -- you know, people were not supposed to be politically correct, that was like a sign of weakness, and I think there was an awful lot of that inside that culture, and it's coming out now.

And I have to say, one thing that's bad about this for women, is that if you were a woman working at FOX and many did very well there, you know, you have questions over you. That's really reprehensible. You know, were you one of the ones who cooperated? That's an awful thing for a woman to have to deal with.

SHERMAN: Yes, Brian, I want to speak to that --

STELTER: That's a very interesting point. We also heard from all these FOX hosts who defended Ailes and who have mostly been silent since he resigned.

Gabe?

SHERMAN: Brian, I just want to speak to that, because I think this is where the story is going forward. The Murdochs are looking at the existing leadership at FOX News as possible replacements for Ailes. The critical issue is that a lot of the main players, especially Bill Shine, Roger Ailes' deputy who's in charge of programming and the FOX Business Network currently, played an integral role in the cover-up of these sexual harassment claims.

[11:25:05] I reported yesterday, based on internal document --

STELER: Those are strong words. Let me pause there for a moment. You said cover up of these claims. You're saying that this man Bill Shine and others covered up what Ailes was doing?

SHERMAN: The way they did that, Brian, the reason I used those strong words, is they pushed women into confidential mediation, signing nondisclosure agreements in exchange for their contracts to be paid, these women needed to make a living. They signed nondisclosure agreements. And as we have seen for the last 19 years, these allegations were not private. I have seen internal documents. I interviewed one of the women, Rudi Bakhtiar, on the record, as did the "New York Times".

And if you see this, Bill Shine, Dianne Brandi, FOX News's general counsel, a lot of the senior executives around Roger Ailes, were fully aware of this culture. Let's be very clear, they knew exactly what was going on, they did not speak up.

STELTER: I think that's a big question mark.

(CROSSTALK)

STELTER: I spoke with a spokeswoman again this morning, who does not have evidence of that. But, you know, I did ask the company this morning, will it comment and whether this internal review is now being widened, and they're not commenting on that. As I said earlier, a lot more questions and answers right now, and you're saying, Gabe, this is going to spread quite a bit further?

SHERMAN: Yes, people I talked to inside the company feel that the only way to change the FOX News culture is to move out all the executives that Ailes had elevated into positions of power. There was a loyalty test.

Another thing that I'm hearing is that Bill Shine, Roger Ailes' deputy, played a role in rallying the women to speak out against Roger Ailes accusers, and lead this counter-narrative to try to say, don't believe Gretchen Carlson and the allegations. If that is indeed the case, that again -- the Murdochs will have to say, this is a guy, these are managers who helped enable and tried to protect Roger Ailes who presided over this culture.

STELTER: Now, Dylan, I heard you're jumping. What are you going to add?

BYERS: Yes. I mean, look, it's clear that there's a culture there and it's pretty pervasive and that obviously raises some questions for the Murdochs about how far this needs to go, how far the internal reviews need to go.

But, again, I want to go back to just thinking about this as a business. It's one thing to get rid of Roger Ailes, and it's quite a huge and historic thing to get rid of Roger Ailes. These are these executives who sort of keep the ship running, they keep things going on a day to day basis.

If you're starting to talk about getting rid of Bill -- you know, Bill Shine, Jay Wallace, Michael Clemente, all of those figures, you're running into a situation where you really have no one who knows how to run this network on a day-to-day basis. That would actually purely from keeping this thing going and I do think FOX News --

STELTER: Yes.

BYERS: -- at least in the short to, you know, mid-term, is going to be just fine. If you get rid of that entire level or if there are questions around those people, that's truly catastrophic to the network on how it functions on a day-to-day basis.

CARTER: And think of the timing of that, Brian.

STELTER: Bill Shine, Jay Wallace, they're going to be here in Philadelphia this week.

Bill, last word to you, 30 seconds.

CARTER: I was going say, think of the timing of that. This is right when FOX would be out front in pushing the narrative that the Republican Party wants to push in this election. And if some of their top executives are removed, it's going to put a cloud over that, how are they going to effectively do it? They have done it very effectively in the past.

And, you know, I think they have been very effective in launching Donald Trump. So, it could have very big impact on this election.

STELTER: Bill, Dylan, thank you. Gabe, please stick around.

You can read all of our coverage on this at CNNmoney.com/media.

After a quick break, we have breaking news about Ailes will be doing next.

And also this, who will replace Ailes? It's one of the biggest parlor games in the media world right now. And one of the names being mentioned is going to join me live right after this break.

(COMMERCIAL BREAK)

[11:32:52]

STELTER: Welcome back to the City of Brotherly Love. We're in Philadelphia inside the Democratic National Convention, which will be gaveled in one day from today.

I'm Brian Stelter. This is RELIABLE SOURCES, talking about the shocking news in the media world this week, Roger Ailes' resignation from the channel he founded 20 years ago.

He started FOX News with a mission. You can see right here the day he announced it with Rupert Murdoch. He wanted to puncture what he saw as a liberal monopoly on the mainstream media. Twenty years later, FOX is the number one cable news channel. It is having its highest rated year ever.

And other outlets with a conservative bent are also thriving.

So we wonder, will Ailes' ouster leave a crater in the conservative media landscape, or will the machine he's put in motion keep going, keep humming along without him?

Joining me now, Chris Ruddy. He's the CEO of Newsmax, which has a cable news operation, a thriving Web site as well.

And, Chris, the reason why I wanted to have you here is because your name has come up, your name has been mentioned in media reports as a possible successor for Roger Ailes.

Can you tell me, would you want the job?

CHRISTOPHER RUDDY, CEO, NEWSMAX: Well, Brian, I think we both know that FOX can't afford my rates.

Only joking on that one.

(LAUGHTER)

RUDDY: But I'm actually very flattered that my name has been out there. It was a surprise to me.

I think that, look, I know these allegations are very serious, but I don't think it detracts from the fact that Rupert Murdoch had the brilliance to see a tremendous market opportunity. He had the guts to take on the media establishment, the liberal media establishment.

He picked a guy that turns out to be the greatest TV mind of our time. Roger Ailes has built the greatest TV news channel of our time. And so I'm honored to be in mix. I'm very happy to be at Newsmax, and I'm not looking for another job.

STELTER: Have you heard from anybody at 21st Century Fox yet?

RUDDY: Well, I wouldn't comment, but right now I'm just doing Newsmax, and I don't comment on who I'm talking to or what may be happening. I'm not looking for any position.

[11:35:05]

I am quite happy running Newsmax. And, as you know, we have a lot to talk about, because Hillary Clinton's running for president, and a lot of people are an by that people like yourself and other people in the media establishment aren't really talking about her as much as they're talking about stuff at FOX.

STELTER: Well, we're going to have four days to talk about Clinton coming up here.

But let me ask you about two things here. You talk about Newsmax. It's one of several news channels that is seeking to take a dent, take a bite out of FOX's audience. Is there room at this moment for competitors like Newsmax to advantage of the shakeup at FOX?

RUDDY: Well, my view of this is, we already are huge on the online space.

Newsmax has been around 17 years. There was a recent comScore report that found we are the third most viewed political news site in the nation, after your network, CNN's Web site, Politico, and then it was Newsmax. It wasn't FOX News. And we have a history of being -- being very large. We reach, according to comScore, about 50 million Americans monthly online. And I think, again, it's a testament to the fact that we are providing fair and interesting news coverage that Americans aren't getting.

It's interesting. When FOX started almost 20 years ago, we had a problem with the liberal media, and we still have the same problem. It hasn't changed.

STELTER: So, are you saying that FOX has actually not been that successful, not that effective?

RUDDY: No, I think FOX has been -- FOX is a giant. FOX has been extremely successful.

But your question to me was, is somehow Newsmax going to benefit by some of the things happening at FOX now?

STELTER: Right.

RUDDY: And I said -- my answer to you is, we don't need to benefit. We are already doing extremely well and having a huge impact. So..

(CROSSTALK)

STELTER: Last thing I wonder, you mentioned -- you talked about Ailes being the wisest programmer in television. What was it? What was it that he had that nobody else had? What was his insight that nobody else had?

RUDDY: Well, I think there's so many things that the media says they just can't touch, they won't talk about. But let's face it. There's only a limited amount of time.

STELTER: Like what? Be specific.

RUDDY: Well, let's talk about this scandal at FOX. Do you think for a minute that if this scandal was taking place at CBS News, that it would be making page one of "The New York Times"? Do you think you would be spending so much time on your show...

(CROSSTALK)

STELTER: I do. I think if the head of CBS News was alleged to have sexually harassed women, yes, I think it would have been on the front page of "The New York Times."

RUDDY: I -- conservatives look at this and say, this is taking place in a very heated political election.

FOX is being embarrassed. Look, I'm not a FOX person. I'm a Newsmax person, but I think I'm looking at this like most conservatives in this country, and we're looking for fairness and we're looking for the balance, and we're not getting it.

And that's why FOX continues. You know, their news brand really hasn't been challenged here. They will continue to be number one, despite any of this stuff, because Americans are turning to them because they don't feel they're getting -- Paul Harvey used to say the other side of the story. We're still waiting for the other side of the story from CNN or "The New York Times."

STELTER: All right, Chris, thank you for being here. Great talking to you this morning.

RUDDY: All right. Thank you.

STELTER: And Paul Harvey also used to say, stand by for news. So, I will tell you stand by for news here.

We have got some insight on to what Ailes will be doing next, what he's working on. We're going to fill you in on that when we come up.

After the break also here, Gabe Sherman rejoins me with more of his reporting on what the heck happens to FOX News after its founding father departs.

Stay tuned.

(COMMERCIAL BREAK)

[11:42:49]

STELTER: We are back, one of my favorite cities on the planet here, Philadelphia, one day before the Democratic National Convention.

All the journalists in this arena, all the TV newsers are buzzing about Roger Ailes and the future of FOX News. Now, Ailes resigned under pressure on Thursday. And Rupert Murdoch, the patriarch of 21st Century Fox, stepped in as acting CEO.

Now there's lots of questions about succession planning, but what is Ailes going to do?

Let me show you one of the answers. We will put it on screen, my story just online on CNN Money, about Ailes' plan to work on his book.

Almost five years ago, he signed a book deal with another part of Murdoch's empire. He's writing an autobiography. But the truth is, he didn't have a lot of time to do it until now.

One of his friends tell me, this is one of his priorities now, to get this book done to tell his side of the story.

We don't know how much he will tell about the harassment allegations, which he has vigorously denied, but he has a lot of stories to tell about his 20 years running FOX News.

Let me bring back Gabriel Sherman, the national affairs editor for "New York Magazine," the author of an Ailes biography a couple of years ago.

Sherman, you have been portrayed by FOX as the enemy, as an antagonist. What was it like for you this week to break the news that Ailes was on the way out, and to see this happen, something that I don't think you saw coming before your reporting indicated it would happen this week?

SHERMAN: Well, really, Brian, as I have said before, I covered this story like any other story.

It's the greatest story in media and politics that I have gotten the opportunity to cover. And so all of the attacks on FOX -- by FOX on my reputation -- Ailes was leading a smear campaign against me -- he brought in people to work inside the headquarters of 1211 Sixth Avenue, where FOX has their offices, to orchestrate smears against me -- really just made me more determined to tell the story.

Clearly, when there's a pushback, it just tells you that there's more to dig and more to find.

STELTER: Is it true that, until yesterday, you hadn't spoken to the head of FOX News P.R. for like four or five years, that she would never return your calls, but now that Ailes is out, and she's working for the Murdochs, now you all are talking?

I mean, that's an early sign of the culture of FOX changing, isn't it?

SHERMAN: Yes, clearly.

I was very surprised to get a call back from Irena Briganti, FOX News' spokesperson, who was determined never to return my call. It was corporate policy not to talk to me.

[11:45:03]

You know, really, what it shows me is that Roger Ailes did not build a TV network. He built a cult of personality. I mean, I like to joke, but it's not -- it's true -- FOX News is basically Scientology if L. Ron Hubbard was running MGM, an old movie studio. And that's really what it was, what Roger...

STELTER: But, see, that's -- when you say that, that's why people say you're against FOX, right? That kind of comment is why your critics, including a lot of staffers at FOX who ask me, why is Gabe Sherman out to get us? You know what I mean?

SHERMAN: Mm-hmm.

Well, I don't know why I would be out to get them to speak the truth. I mean, I did more than 600 interviews for my book. I have talked to people inside the company. I have seen internal documents. So, really just saying the truth and telling the culture of what I understood about FOX is not out to get them.

It's just -- it's really what it is. And if they don't like to believe that, that's really up to them to decide. But I think the world should just be very clear.

STELTER: Well, maybe the issue is, is -- yes -- that FOX makes it hard maybe to describe FOX.

For years, you would get a call from a P.R. person at FOX if you dared to describe them as a conservative cable news channel. They would deny that.

SHERMAN: Well, unfortunately...

(CROSSTALK)

STELTER: And I would argue that's denying reality.

SHERMAN: Yes.

STELTER: But that's an example for us of how difficult it was to cover Ailes at FOX.

SHERMAN: Yes.

And, really, Brian, I just think, for a lot of time, the American people and political, both on the left and the right, were in denial about who Roger Ailes is and what FOX News is.

I mean, I like to say, Scientology is a cult, but they don't have any political influence. Roger Ailes built a cult that had a front-row seat in the White House Briefing Room. This was a not a news channel. This was his personal megaphone to advance his own personal right-wing agenda.

And that is just the truth. And it's going to take a long time -- and it's starting to happen now. The events of the last week, we're starting to see that people are accepting that this was really something that was shocking.

It's going to take a long time for the culture to acknowledge that Roger Ailes was allowed to have so much influence to wage his own personal agenda on the American political landscape.

STELTER: Gabe Sherman, thank you so much for being with us this morning.

SHERMAN: Thank you.

STELTER: I personally find a lot to admire about FOX News, a lot of what they built.

But these allegations of harassment are very disturbing. And, as we said this morning, there's a lot more to report on this story.

We're taking a quick break here in Philadelphia, but coming back on the other side of the break with the one, the only Carl Bernstein, previewing the Democratic National Convention and looking back at the ratings for the RNC.

We will be with you in just a moment.

(COMMERCIAL BREAK) [11:51:30]

STELTER: Welcome back inside the Wells Fargo Center in Philadelphia, site of the Democratic National Convention.

I'm Brian Stelter, and this is RELIABLE SOURCES.

We have been talking about former FOX News CEO Roger Ailes, who is out this week.

In the meantime, Donald Trump and Hillary Clinton are in. We saw Trump accept the nomination for president in Cleveland at the Republican National Convention on Thursday, but the ratings were not quite as strong as expected.

There's a lot of talk about the Trump's ratings bump, but in this case it fell short of GOP records, averaging about 30 million viewers for his speech, about the same as Mitt Romney four years ago.

Let's talk about what to expect here at the Democratic National Convention with Carl Bernstein, one half of the famed Woodward and Bernstein duo, the author of the Hillary Clinton biography "A Woman in Charge."

Carl, with so many stars on this stage, political stars, the Bidens, the Clintons, the Obamas, of course, Elizabeth Warrens, Bernie Sanders, you think there will be more interest, more viewership of the Democratic National Convention?

CARL BERNSTEIN, CNN CONTRIBUTOR: I think everybody is focused on both conventions.

I think the Nielsen numbers are not as important as the fact that this is also in the era of social media. Stuff is getting retweeted, YouTube.

STELTER: So, the message still gets out.

BERNSTEIN: The focus on this race is enormous.

I have said this election is the Gettysburg of the culture wars. It's definitive. It's the seminal battle. The effect of it is going to be felt for the next 30, 40 years. And that's the context of this.

And Trumpism, this new phenomenon, is really the big issue at both conventions.

STELTER: So, you would agree that this whole election, even this part of it, is being viewed through the prism of Trump?

BERNSTEIN: Absolutely.

STELTER: Is that a media bias?

BERNSTEIN: No. It's because Hillary Clinton should have won and the Democrats should have won this campaign in a walk. But because of Hillary Clinton's perceived weaknesses and Trump's very

real appeal, both as an authoritarian, me, big, strong, Juan Peron- like leader, I will wipe everything out, I will do all of this, this is a demagogic appeal that has great resonance, unfortunately.

But, also, he has identified, much better than the Democrats have, except Bernie Sanders did some, the real grievances that Americans are feeling and hurting, and that the so-called elites have ignored ordinary people in this country. So he has defined the debate in this, along with Bernie Sanders, more than Hillary Clinton has defined the debate.

STELTER: Sanders in the news this morning, once again renewing his calls for Debbie Wasserman Schultz to step down.

These e-mails published by WikiLeaks from the Democratic National Convention suggest that some staffers were taking sides, choosing, supporting Clintons over Sanders. How big of an issue do you believe this will be for Clinton and Sanders this week?

BERNSTEIN: I think, first of all, there is only one issue in this election, and that's Trumpism.

And it's incumbent on the Democrats to stay focused on that and the dangers that come to this country and the world from a demagogue unlike any that...

STELTER: So, the leaks don't matter?

BERNSTEIN: No, they matter -- unlike any that we have seen, from becoming president.

And to make that happen, it seems to me, given these leaks and given this real disarray, that it is incumbent on Hillary Clinton and Bernie Sanders to get together before this convention opens in some way and say, look, we have come out here and say we are united in everything having to do with my Hillary Clinton becoming president and defeating Donald Trump.

If they don't do that and they let this thing fester and go and make a sideshow out of this that we're all looking for in the media, this is more trouble for Hillary Clinton.

[11:55:08]

And, hopefully, they are going to be smart enough to do this before that gavel comes down.

STELTER: Very interesting.

Carl, thank you for previewing it for us. It's great to see you this morning.

BERNSTEIN: Good to be here.

STELTER: And we wrap up here on RELIABLE SOURCES by reminding you, you can read the rest of our media coverage all week long at CNNMoney.com/media.

You can also sign up for our nightly newsletter, the RELIABLE SOURCES newsletter. I will be filing it from here in Philly in just a few hours.