FOX settles sexual harassment lawsuit for $20M on Ailes' behalf

Sept 6 (Reuters) - Fox News will pay $20 million to settle a sexual harassment lawsuit by former anchor Gretchen Carlson against the network's ousted chief Roger Ailes, a source familiar with the agreement said on Tuesday.

The Fox News parent company, 21st Century Fox, offered a public apology to Carlson, who filed suit against Ailes in July, saying he took her off a popular show and cut her pay because she refused to have a sexual relationship with him.

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Ailes, a former political consultant who founded the conservative news operation in 1996, left Fox less than three weeks after Carlson filed suit, taking a $40 million severance package. Other women who had worked for him then came forward with allegations of harassment, leading to another lawsuit by a former on-air staffer.

Ailes was the only defendant in Carlson's lawsuit. The source, speaking on condition of anonymity having not authorized to discuss the matter, said Ailes' contract indemnified him from employment-related claims, which is why the company was settling on his behalf.

A court filing showed Carlson, 50, had voluntarily dismissed her federal lawsuit in New Jersey against Ailes. In a statement she said she was grateful Fox took swift action.

A statement from 21st Century Fox said, "We sincerely regret and apologize for the fact that Gretchen was not treated with the respect and dignity that she and all of our colleagues deserve."

Carlson, who won the Miss America beauty pageant in 1989, was a long-time co-host on the "Fox and Friends" morning program before getting her own show in 2013.

SEE MORE: Gretchen Carlson through the years

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Gretchen Carlson through the years

Gretchen Carlson

(Photo by Jeff Kravitz/FilmMagic)

Miss America At Spireclub -- Miss America Gretchen Elizabeth Carlson plays Billiars In one of the rooms in the new club which offer many activities. With her showing how to shoot, is James. Stewart, Marketing agent for Pire club. September 15, 1988.

(Photo by Michael Schwartz/New York Post Archives/(c) NYP Holdings, Inc. via Getty Images)

Debbye Turner, Miss America 1990, Ericka Dunlap, Miss America 2004, and Gretchen Carlson, Miss America 1989

(Photo by Bruce Glikas/FilmMagic)

Gretchen Carlson attends private screening: 'Memoirs of a Geisha' at Sony Screening Room on November 22, 2005 in New York City.

(Photo by Scott Rudd/Patrick McMullan via Getty Images)

John Voight, left, visits with anchors of 'Fox & Friends' Steve Doocy and Gretchen Carlson.

(Photo by Carolyn Cole/Los Angeles Times via Getty Images)

John Edward, Steve Doocy, Gretchen Carlson and Brian Kilmeade visit 'FOX & Friends' at the FOX Studios on October 5, 2010 in New York City.

(Photo by Andrew H. Walker/Getty Images)

Miss America 1989 and Fox News Channel co-host Gretchen Carlson is introduced at the 2010 Miss America Pageant at the Planet Hollywood Resort & Casino January 30, 2010 in Las Vegas, Nevada.

(Photo by Ethan Miller/Getty Images for Planet Hollywood)

Demi Lovato, Steve Doocy, Gretchen Carlson and Clayton Morris visit 'FOX & Friends' at the FOX studios on August 18, 2010 in New York City.

(Photo by Andrew H. Walker/Getty Images)

Ali Landry (C) poses for a photo with 'FOX & Friends' Co-hosts Gretchen Carlson and Steve Doocy outside the FOX studios on September 9, 2010 in New York City.

(Photo by Paul Morigi/Getty Images)

Elmo and host Gretchen Carlson visits 'FOX & Friends' at the FOX Studios on November 18, 2010 in New York City.

(Photo by Neilson Barnard/Getty Images)

'Fox & Friends' co-anchor Gretchen Carlson and Miss America 2011 Teresa Scanlan attend 'Fox & Friends' at FOX Studios on January 17, 2011 in New York City.

(Photo by Slaven Vlasic/Getty Images)

Miss America 1989 and Fox News Channel co-host Gretchen Carlson introduces pageant judges during the 2011 Miss America Pageant at the Planet Hollywood Resort & Casino January 15, 2011 in Las Vegas, Nevada.

(Photo by Ethan Miller/Getty Images)

Cookbook authors brothers Jamie and Bobby Deen visit FOX & Friends and talk to host Gretchen Carlson, at FOX & Friends at FOX Studios on April 20, 2011 in New York City.

(Photo by Slaven Vlasic/Getty Images)

Host Steve Doocy, vocalist Brad Arnold of 3 Doors Down and host Gretchen Carlson pose for photos during a taping of 'FOX and Friends' outside of FOX Studios on July 29, 2011 in New York City.

(Photo by Astrid Stawiarz/WireImage)

'FOX & Friends' hosts Steve Doocy, Gretchen Carlson and Brian Kilmeade greet the crowd during a taping of 'FOX & Friends' at FOX Studios on July 15, 2011 in New York City.

(Photo by Astrid Stawiarz/Getty Images)

Cookbook authors brothers Jamie and Bobby Deen visit FOX & Friends and talk to host Gretchen Carlson, at FOX & Friends at FOX Studios on April 20, 2011 in New York City.

(Photo by Slaven Vlasic/Getty Images)

Host Gretchen Carlson and Craig Morgan speak during 'FOX & Friends' All American Concert Series at FOX Studios on July 13, 2012 in New York City.

(Photo by Charles Norfleet/FilmMagic)

Gretchen Carlson is the guest co-hoston 'The View.'

(Photo by Lou Rocco/ABC via Getty Images) 

Professional tennis double players and 2012 olympic gold medalists, Mike Bryan and Bob Bryan chat and play table tennis with 'FOX & Friends' hosts Steve Doocy, Gretchen Carlson and Brian Kilmeade live on 'FOX & Friends' at FOX Studios on August 23, 2012 in New York City.

(Photo by Neilson Barnard/Getty Images)

Fox & Friends hosts Steve Doocy, Gretchen Carlson and Brian Kilmeade during 'FOX & Friends' All American Concert Series outside of FOX Studios on July 19, 2013 in New York City.

(Photo by Slaven Vlasic/Getty Images)

Steve Doocy, Gretchen Carlson, Brian Kilmeade, John Lynch and The cast of 'Duck Dynasty' Si Robertson, Jep Robertson and Willie Robertson visit 'Fox And Friends' at Fox News Studios on September 9, 2013 in New York City.

(Photo by Laura Cavanaugh/Getty Images)

Fox News Channel Host Gretchen Carlson speaks onstage during a 'Fireside Chat on Persecuted' panel at Variety's Purpose: The Family Entertainment and Faith-Based Summit in association with Rogers And Cowan at Four Seasons Hotel Los Angeles at Beverly Hills on June 12, 2014 in Beverly Hills, California.

(Photo by Rich Polk/Getty Images for Variety)

Journalist Gretchen Carlson attends 'Persecuted' screening at Lighthouse International Theater on July 18, 2014 in New York City.

(Photo by Jim Spellman/WireImage)

Fox News Channel Host Gretchen Carlson speaks onstage during a 'Fireside Chat on Persecuted' at Variety's Purpose: The Family Entertainment and Faith-Based Summit in association with Rogers And Cowan at Four Seasons Hotel Los Angeles at Beverly Hills on June 12, 2014 in Beverly Hills, California.

(Photo by Rich Polk/Getty Images for Variety)

THE VIEW

Mindy Kaling and Gretchen Carlson were the guests, Wednesday, June 17, 2015 on ABC's 'The View.' '

(Photo by Lou Rocco/ABC via Getty Images)

Miss America 1989 Gretchen Carlson attends the 2016 Miss America Competition at Boardwalk Hall Arena on September 13, 2015 in Atlantic City, New Jersey.

(Photo by Michael Loccisano/Getty Images for dcp)

Gretchen Carlson, Debra Shriver and Danielle Weisberg attend Hearst Chief Content Officer Joanna Coles Hosts the Hearst 100 Luncheon at Michael's on December 12, 2016 in New York City.

(Photo by Jared Siskin/Patrick McMullan via Getty Images)

Gretchen Carlson arrives for the Hearst 100 Luncheon at Michael's on December 12, 2016 in New York City.

(Photo by Rob Kim/Getty Images)

Gretchen Carlson attends Women at the Top: Female Empowerment in Media Panel at the 2016 Greenwich International Film Festival on June 12, 2016 in Greenwich, Connecticut.

(Photo by Noam Galai/Getty Images for GIFF)

NEW YORK, NY - APRIL 03: (EXCLUSIVE COVERAGE) TV commentator/author Gretchen Carlson visits Insight at SiriusXM Studios on April 3, 2017 in New York City. (Photo by Slaven Vlasic/Getty Images)
NEW YORK, NY - FEBRUARY 08: (L-R) Editor-in-Chief of New York Magazine Adam Moss, Editor-in-Chief of Good Housekeeping Jane Francisco, News anchor Gretchen Carlson, Editor-in-Chief of Glamour Cindi Leive, Editor-in-Chief of the Meredith Parents Network Liz Vaccariello, and Editor-in-Chief of People Magazine Jess Cagle attend the American Magazine Media Conference 2017 on February 8, 2017 in New York City. (Photo by Nicholas Hunt/Getty Images for American Magazine Media Conference)
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In a statement in July Ailes had said Carlson's suit was in retaliation for the network's decision not to renew her contract after disappointing ratings for her show.

Attorneys for Ailes did not immediately return calls for comment on the settlement.

Fox News, which Nielsen ratings data shows is the most watched channel in basic cable television this year, still is fighting sexual harassment claims in New York state court. Andrea Tantaros claims she was taken off the air in April in retaliation for rebuffing Ailes' advances and complaining to top officials at Fox News.

Behind the scenes, her lawsuit said, Fox News was "a sex-fueled, Playboy Mansion-like cult, steeped in intimidation, indecency and misogyny." Fox News characterized Tantaros as an "opportunist" who was taken off the air for writing a book without permission.

AILES IN POLITICS

Ailes, 76, who worked on the presidential campaigns of Richard Nixon, Ronald Reagan and George H.W. Bush before Fox News, became one of the most powerful forces in journalism and politics as the founder of the network. He reportedly has been advising the campaign of Republican presidential candidate Donald Trump since leaving and continues as an informal adviser to Rupert Murdoch, executive chairman of 21st Century Fox.

In his resignation letter, Ailes did not indicate he had done anything wrong. He previously denied Carlson's allegations, as well as those of star anchor Megyn Kelly.

New York magazine reported in July that Kelly had told investigators hired by Fox to investigate the claims that Ailes "made unwanted sexual advances toward her" about 10 years ago.

Fox News also announced on Tuesday that Greta Van Susteren, host of the "On the Record," was leaving the network after 14 years.

Van Susteren's departure was related to a financial disagreement with her employer, according to a separate source familiar with the situation, who requested anonymity because discussions were confidential. The source declined to say if her departure was connected to Ailes' resignation.

Fox News has been a ratings juggernaut for 21st Century Fox, contributing $1.35 billion in earnings before interest, tax, depreciation and amortization (EBITDA), or 20 percent of parent Twenty-First Century Fox's total EBITDA in fiscal 2016, according to estimates by Anthony DiClemente, an analyst with Nomura.

While the swift settlement of the Carlson lawsuit potentially removes a cloud that has been hanging over Fox News for investors, there still are questions about whether more talent will depart because Ailes is no longer there, said Brian Wieser, an analyst at Pivotal Research Group.

Carlson's lawsuit was a wakeup call for Fox shareholders, who have not had to think about vulnerabilities tied to Fox News, Wieser said.

"This has brought to the forefront that investors do need to think about Fox News," he said. "Even if the former management had stayed in place they are contending with a big demographic cliff as their viewers tend to be older.

Fox's median age is over 65, higher than MSNBC and CNN, whose viewers are a median age of 64 and 60 respectively, according to Nielsen data.

Shares of 21st Century Fox were down more than 1 percent in noon trading at $24.29 on Nasdaq.

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