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TRANSCRIPT: FOX News' Roger Ailes Speaks at TCA Press Tour

Following is a transcript of an appearance by FOX News Chairman and CEO Roger Ailes before the Television Critics Association in Pasadena, Calif., on July 24, 2006:

ROGER AILES: Good afternoon. I understand you've been locked in here for three weeks, so I'm going to try to get you through this as quickly as I can. I got an e-mail from a guy in Guantanamo and he said, "We got to get these prisoners out of there," so we'll do our best.

FOX News is doing pretty well. We overtook CNN at the end of 2001. We haven't lost a day to them for almost 60 months now. Since 2002, our cable news marketplace share has increased from 38 percent to 54 percent. Our primetime has made three or four adjustments over the ten years. Our competition, MSNBC and CNN have cancelled 54 shows against us in that time. We're now seen in 80 countries. Ad sales has increased and continues to; over the last five years, cumulative growth over 30 percent a year.

But I really want to talk about our journalism. I was going to bring Shep Smith with me, but he's standing by in Israel. I'm going to introduce him in a minute if you have questions.

I actually think that FOX News is underrated in journalism, and some people think that can't be possibly true. Many of those people are sitting in their hotel rooms right now reading the transcript of this and then writing their reports rather than coming, so thank you for coming.

FOX News breaks a lot of stories. Brit Hume's work is unparalleled. He's one of the finest journalists in the country. Our U.N. oil for food story which we sort of forced on the world was fine work by investigative journalist Eric Shawn. Shepard Smith's Katrina coverage was terrific. Steve Harrigan's Arabia series, the first time that thing was used, about radical Muslims taking over Europe. Doug Kennedy reporting on the dangers of treating kids with antidepressants led to congressional investigations and new warnings from the medical community. So this sort of journalism goes on day after day at FOX News.

What I'd like to do is introduce to you a man who was going to be here, as I said, tonight. I think he's the finest anchor in primetime news anywhere in the country. He's been working pretty hard, and it's, I guess, ten hours later. He's in northern Israel right now. This is Shep Smith.

Shep, can you hear me? I think there's a four-second delay.

SHEPARD SMITH: I'm used to that one, boss.

ROGER AILES: All right, Shep. First of all, I'm going to throw it open to questions here, Shep, if you can handle it, but I think you've handled pretty tough audiences in your life. First of all, tell me what happened today, because I've been in meetings all day, and I heard you had an exclusive and some interesting things go on.

SHEPARD SMITH: We did, Roger. We went up to the border north of here from Kiryat Shmona, and we were first to speak with Israeli soldiers returning from the frontline just across the border in the village of Maroun al-Ras. That's a small formerly Hezbollah-held village where Israeli troops have gone in. They started with air power. Then they went in with ground forces in limited operations, special operations forces. Seven Israeli troops were killed there over two days. They eventually brought in more from the south and some of their more experienced troops from Gaza, brought them up there and have gone in, and after three days of fighting there, they hold that town. But no one had spoken, on television at least, to any of the soldiers who had come out of there, it's my understanding. Today, we did just that. They told of fire raining around them, of bombs and Kalishikov rivals in their faces, of a very tough enemy on the other side of the border. And we'll be airing some of that tonight on the "FOX Report" if any of you critics want to watch that.

In addition, we took a number of Katyusha rocket incoming here today in the north of Israel in Kiryat Shmona. More than 100, we're told, across the north of Israel and about a half dozen here as our troops yet again were running for cover. This particular town was, for a long time, called Katyusha City for -- in previous encounters with Hezbollah fighters. They have taken a lot in this town. It's been pretty rough going here over the last few days, the town behind me largely evacuated and the war continues. And, of course, the pictures coming from our correspondents on the other side of the border inside Lebanon are enough to shatter your soul. So many Lebanese citizens running for cover and the Israeli folks say over and over "We have no problem with the people of Lebanon." One of three -- only three democratically elected governments in all of this part of the world but yet caught in the middle there of Hezbollah which, of course, are part of that government and the terrorist attacks from them, from the guerilla fighters there, and the strikes back from Israel continue. It doesn't appear at least for now, Roger, like this thing is going to wrap up anytime soon. Of course, Condoleezza Rice arrive today. She's working on the diplomatic front, and I think those on both sides of the border hope they can figure out a way to stop the fighting and stop it soon.

ROGER AILES: All right, Shep, thank you very much. I'm going to open it up to some questions here in the audience. Please -- row three's got a mike. Go ahead.

QUESTION: Mr. Smith, Ellen Gray from the Philadelphia Daily News. We've had, in the last week or so -- it all blurs here, of course -- Charlie Gibson from the Mideast by satellite, Brian Williams just back from the Mideast. It seems that the anchor and anchor desk are more and more separated and you guys all have to be expected to move pretty fast. Can you talk a little bit about the value to you as a newsman of being able to get out there and also what it brings to the report that, say, just having your bureau people on the ground can't do.

SHEPARD SMITH: Well, it couldn't be more valuable to me, I tell you. I'm not one who runs off to every story that comes along. I don't think that's valuable. We have an incredible team of correspondents who know their regions and know their beats and producers and technicians along with them. But when you have a story like this where almost all of your evening newscast is centered on this one conflict, where the conflict itself is so diverse and the opinions about such a thing are so diverse, I can't think of a place more important for the anchor to be than here.

The most ridiculous thing any of us can do is fly off to some place, parachute in and just anchor your show there and not go out and do any reporting. We've hit the ground every day. Ours are 18-, 20-hour days just as are our correspondents'. And because of the time difference, it's daylight over here before our programs even come on, so we're able to go out in the field and grab stories.

Today, interviewing those soldiers right along the border just as they had come back from the other side. Understanding the feeling of Israelis on the ground and at the same time being able to talk to correspondents who are across the border who are experiencing the rocket fall from the Israeli rockets on the other side, so just being in here and being able to soak up the storyline. We have a bureau chief here, Eli Fastman who knows this region better than anyone I've ever met. And every day, I'm able to get briefings from him all day, his sources on the phone and our correspondents' sources on the phone. It's very valuable for me to be here. I think it adds some depth to our reporting. It allows us to get better analysis in there. I agree with you on just jumping in and out and flying in and reading a teleprompter from a far location. A lot of that is just sort of sound-stage activity. It's anything but that here, and I'm really glad Roger sent me here too, because there's a lot to be learned, and we're learning every day.

QUESTION: Well, then, following up with Mr. Ailes, do you see that a lot of people are sort of cutting back their foreign bureaus while arguing that they're maintaining foreign coverage. Sean McManus was here a while back talking about sending more correspondents to the Middle East. What are you doing to make sure that your bureaus stay in place, that you have experts on the ground when things happen?

ROGER AILES: When we started FOX News, I announced that I didn't think a bureau was 10,000 square feet of concrete and reporters waiting for something to happen. I believe that the technology had sped up the process greatly. When the tsunami hit, for instance, we were pretty light in that region. CNN was much heavier. We still got to the air first and, frankly, I thought we did great coverage out of there. It's a matter of anticipating and moving people and having enough people. We're actually beefing up our foreign coverage, not cutting it back, although admittedly we were thinner than CNN which has CNN Eye and some other people in place.

I think it's critically important to maintain it. I think the United States after 9/11 has become more interested in foreign news and, in fact, should become even more interested in it, because now we really have to deal with the world. So I'm not anxious to cut back foreign coverage anywhere. I'm anxious to beef it up, and I'm anxious to put all of our anchors and reporters in situations where they understand it.

SHEPARD SMITH: To follow up on that, if you don't mind. When particularly here in the Middle East, if you've been watching our coverage over the last few weeks, which I hope you have, you'll see that we have the technology that allows us to be live at scenes where our competition have not. As our competition were sitting in bureaus and reading about things that are happening out in the field, our correspondents were live at scenes. We were live when a missile came into Gaza just two weeks ago. We were live when a helicopter crashed just down the street from us. We've been out there reporting on scene and there's nothing more valuable than that. We have eight correspondents here and another half dozen across this region now. I think we're better situated right now to cover this story than any news organization here.

ROGER AILES: Okay. Down here in front.

QUESTION: About a year ago or maybe a little bit more than that, there was a lot of talk that FOX News would be spinning off a business news channel. What's become of that? We haven't heard about that in a while.

ROGER AILES: Well, I made several statements about it. Basically what I said is when we have the distribution in place, we'll go ahead with it. We are still looking at it. I've developed a business plan. We have not pushed it any further than that because you have to get the distribution in place and you have to negotiate that. So the only thing I can say to that is stay tuned. It probably won't happen this year. After that, it could happen. And we are in active negotiations on it.

QUESTION: I have a couple of questions for Shepard. One is: What are the particular challenges of this conflict as it's escalating so quickly to be able to cover it accurately and safely?

SHEPARD SMITH: I think part of the challenge is that you just never know when calm is going to turn to hell on Earth. That's happened to us and our correspondents a number of times. The other day, we were driving up -- well, we were in Kiryat Shmona yesterday and again today. And beginning our workday about 8 o'clock Eastern time this morning when the rockets began to fall, you have things that you want to be out covering. In addition, that's happened to our correspondents all up and down the region just as it's happening to the Israeli people. And I think there's a similar challenge on the other side of the border where our correspondents in Beirut and Tyre at this moment have dealt with incoming as well. You want to be able to go out and show the human suffering and the movement of troops and exactly what's being accomplished in that movement of forces. And at the same time, you have to keep yourself safe. It's a fine line there. The people with whom we work are very well experienced in this region. Many of them have been here for decades. We rely on them for their guidance as to where to go and what to do and what not to do. But the truth is, to cover this story, you have to occasionally put yourself in danger. We knew that when we signed up for this job, and that's a risk we're willing to take.

QUESTION: I have a follow-up. My follow-up question is: Watching in aggregate all of the different network and cable news coverage of this conflict so far -- I'm not asking you to speak for anybody else -- but it really looks as though there's this sense of doom right around the corner. Is that reading too much into it? Or what is your feeling as a reporter and as a person right there?

SHEPARD SMITH: Well, as a reporter who's been covering this from the very beginning on the ground, it was clear to us in the very beginning that Israel wanted to do this with air power and with artillery fire in the early going. When that didn't stop the Katyusha rockets from coming, they added special forces. When they added special forces the first night, two soldiers were killed and five were injured. The second night, three soldiers were killed. Then we found out that two more had been killed. And when that happened, they moved more troops up from Gaza, the more experienced troops, called in reserves and sent them down to Gaza, and now they're moving in in larger numbers. I think there is a wildly held consensus here that if Israel -- that Israel does not want to occupy territory on the other side of the border. But I'll tell you, as I've said to our viewers, the fact of the matter is they do occupy land there. Their plan is to expand that area which they control, and then their hope is to turn that over to a force as has been talked about today, most likely a NATO-led force with the French in the mix and some friendly Muslim nations in the mix to try and hold that area and create a buffer zone. If you look at Israel, when you talk about Syria, you have the Golan Heights, though there's no peace agreement there, but you have the Golan Heights as a buffer zone. Down in Egypt, there's a peace agreement and there's a buffer zone there. Israelis will tell you what they need for peace and stability in this region and to allow a democratically elected government inside Lebanon, only one of three in this region, to prosper and grow and be able to spread that sort of thing in this region, what you need is buffer zone.

Now, here is the fly in the ointment. There is no international force in place. That's the reason Condoleezza Rice is here to try to organize such a thing. The analysts and the experts with whom I speak say that could take weeks. The doom and gloom about which you speak -- and I wouldn't use those words -- but I think there is a great deal of concern that if that area is not held that Israel could end up in another quagmire and that the Israelis feel, from everything they've told us, that they could end up in a situation which they were in from 1982 to the year 2000 when they ended up leaving there and many -- and all around the world, including here in Israel -- saw that a victory for terrorism and very difficult days for Israel.

What all involved want to do is stop the fighting, get Lebanon back on a democratic foot, allow the people of northern Israel to sleep at night. Between the spot where we are now and the spot where we are then, there's a gulf. And the hope is that they'll be able to fill that gulf. Right now, there are some signs but there's nothing concrete, and I think that much of the world should probably be concerned about it.

ROGER AILES: Let's take a couple more questions here.

QUESTION: For Mr. Ailes and for Mr. Smith, I'm over here on your right in the third row. Could both of you talk about how FOX News was able to own the Natalee Holloway story and sort of what the process was and the resources that you devoted and how you decided to spend so much time on it?

ROGER AILES: Well, I can start by saying that Greta Van Susteren, who is exceptional at these kind of stories, particularly crime, legal stories, that sort of thing, did exceptional work. I mean, she went down there and really dug it out. She was able to take the victim's mother to the accused's house to sit down with the parents. That was just good street reporting. And more and more, when we broke the developments along the way on that story, people began to turn to us. But I give a lot of credit again to our journalists and to Greta.

Shep, do you have anything quick to add on that?

SHEPARD SMITH: Well, I mean, you can spin that story however you want from the critics, but the truth of the matter is the reporters from our channel -- and I wasn't one of them -- but those who went down there, and Greta included, broke details of that story all along the way. Just as we break stories in the Middle East, we break stories in the United Nations, and we break stories all across the United States. That was another victory for us.

ROGER AILES: I was going to say one other thing on that story, and that is that there was a lot of talk about "Well, you just single out one girl. Girls get killed all the time." And -- but we saw that partially as a family story, as a parents' story. Every parents' worst nightmare is a kid goes off for spring break or some graduation party and disappears. And so it became a kind of symbolic story for all parents, really.

QUESTION: Did you ever second-guess that -- or did you -- were there internal discussions that, "Okay, we're spending all this time on a missing girl in Aruba"? Now Shep is in Israel, but that's because the Middle East has exploded.

ROGER AILES: Well, but Iraq hasn't been in the news too much. It was in again today. What happens in the news -- and I think the point of your question is a good one. Do we tend to chase one story? And the answer is yes. Everybody does pretty much the same thing. The agenda shifts. You try to keep everybody up on all the stories, but when there's a new -- well, some people do breaking news more than others in terms of alerting the public to breaking news, but sometimes there really is breaking news, and you go back to that story. On the other hand, we tend to follow a story until a new story comes along and supplants it. I wouldn't deny that. 24-hour news started that.

QUESTION: Question here about the clip reel that we saw before you came out with some of the greatest hits of industry reporters covering this. You came out here ten years ago to introduce us to FOX News. And I recall that session being notable for how little was sort of communicated to critics about what the FOX News Channel would be. And I recently looked at some of the tapes of "The O'Reilly Report," as it was called back then, and things that I had stowed away. And it did feel to me like you didn't quite know what to do with the network right way. Were you just being cagey with us, or were you getting all of your ducks in a row, or did you in fact discover that this -- over time that this attitude was really resonating with viewers?

ROGER AILES: Probably a little bit of all three, but mostly I was getting my ducks in a row. I mean, I hadn't committed -- remember, we started with 25 percent of the resources of CNN, not a single person announcing that we would be alive a year later. I was trying to sign talent and attract talent to the network. I didn't want to tip off the competition exactly what I had in mind or where we were going. And a lot of the programming had not been really formulated. There was a belief at that time -- ABC was thinking of getting into the game, and MSNBC was going to launch -- or had launched immediately and so on. So it was a bit of a mishmash. And I'm reluctant, just like I'm reluctant to talk about business news -- I might as well -- I remember during the Gulf War, a colonel was standing on a beach when our troops arrived and grabbed a lieutenant colonel and said, "What time" -- "what exact time are they hitting the beach here?" And he said, "Why don't I just call Saddam Hussein and let him know when we're coming." There is a certain amount of competition in all of this that you don't want to talk too much about.

QUESTION: Okay, understood. Now, with regard to the local news operations that you've recently taken control of, is this -- I'll give you an opportunity here to say that you're not going -- that you're not in that same mode with them; that is, you start to introduce morning news and revamping the local news that these guys do, that you're not planning to inject it with that same FOX attitude.

ROGER AILES: What are you worried about? That we're going to do fair and balanced reporting at the local stations, or what is your exact question?

QUESTION: Well, a lot of FOX stations have focused on local news reporting without -- I mean, something closer maybe to the Sinclair News Channel experiment that --

ROGER AILES: That -- we have nothing do with that. I mean, I have no problem with fair and balanced reporting anywhere it's done. I don't worry about our competitors particularly doing it. I noticed when CNN came out here that John Klein said he'd reached all his goals. We're very, very happy about that --

(Laughter.)

-- that he's reached all his goals. We believe in fair and balanced reporting, but basically stations do local news, and that is what they're supposed to do, cover their community and let people know what's going on. Now, rather than ask me a question, I'll take one more question for Shep because he's got to get some sleep

QUESTION: Yeah, Shep, you've spent a fair amount of time in Iraq. I was wondering if you could compare how these two stories that you're covering -- how are they similar, and how are they different? Not just from the perspective of trying to report the story, but also kind of the American role in it? And frankly, since American audiences are very interested in "what does this mean for us," are you having to kind of tell a story from the Middle East differently than the one you tell from Iraq?

SHEPARD SMITH: Well, I think that you come about -- come to all stories with sort of the same idea: Try to fill in the gaps historically speaking that will allow viewers to understand better what's happening today. I mean, I think along the way, you touch on the war in 1967. You touch on what happened in 1982 and '83. You touch on the highs and lows of experiences with Hezbollah across the border, and you try to point out areas where the Hezbollah have seen to terrorize people in the north and where Israel, as some of its detractors would say, have overdone things to the north. And I don't see a lot of parallels as far as the way you cover the story. We can get to the border from this side, and from the other side our reporters can come down to the border, but you don't cross that border, for one side or the other may hit you. Iraq was a war contained within a country. This is one country fighting against another.

And I can't tell you what it's like to stand at the border of Lebanon and see 19-year-old, 18-year-old boys come back, boys who were 12 years old when Israel first came out of Lebanon, who had heard the stories of what it was like to fight the Shiia, the same Shiia who, in 1979, were sent by the Ayatollah Khomeini across a wide-open field to step on land mines -- a million people died in that -- where the same Shiia who blew up bases in Beirut where more than 400 Americans died over a period of a few weeks and sent the United States running out of there and the world in horror that suicide bombers had made the scene. And now with these young soldiers, who had only heard all of those stories, now living it. And to see them come out of there and say, "I've never even thought of a fight this difficult. I never realized that it could be this hard." One man said to me today, "We are children. This is hard for us." And I wonder how difficult it was for that young soldier, who is so well-trained, to look a correspondent from halfway around the world in the eye and say, "We're children." But there was a lot of reality happening on that border. And as difficult as those stories are to see, and of babies on the other side and mothers and daughters who have been hit by shrapnel because of Israeli fire as they try to take out Hezbollah, those are all learning experiences. And if those experiences that are through the television lead our viewers to learn more about the history that brought us to this point and the actions that were taken and those that worked and didn't work, the better we all are with analyzing what's happening here and forming our opinions and voting for people who agree with our thinking on such things.

There's a real possibility that across that border now, that the democratically elected government could at some point become a Hezbollah-dominated government. And that would mean very difficult times for the Middle East and, I think, very difficult times for the rest of the world. So Iraq aside, I think we're -- I said the other day I think we're crouched on a page of a history textbook that won't be written for 20 years, and the question is whether it's a page or a chapter. And I don't think we know yet. And it's fascinating to see and difficult to watch, and I'm so glad to be here and telling the story and that we're doing so in a fair and balanced way.

ROGER AILES: Shep, thank you very much. Tell your team over there everybody keep your head down. We need you, man.

SHEPARD SMITH: I will, Roger. Thanks, boss.

ROGER AILES: Get some sleep.

I want to introduce Jennifer Griffin. She's our chief Middle East correspondent. I'm not going to take a lot of questions because it is the middle of the night over there, but I want to just thank her. Jennifer, you're doing a great job. How is everybody over there? Are you all right?

JENNIFER GRIFFIN: Thank you, Roger. Everyone's doing fine, everyone's doing fine. I think what's surreal for our Israeli team here, Roger, is that we remember being up here on this very border in this very town exactly six years ago when the Israeli troops pulled out, they withdrew after 18 years of occupying south Lebanon. We were standing there as the last troops came across, the soldiers hugging each other up on the border. I remember distinctly doing an interview with a Hezbollah fighter on the border then. They were celebrating on the other side. They felt like they had kicked the Israeli army out. And he told me they weren't going to stop fighting until they made it to Jerusalem. Now, six years later, we're up here, the celebrations that we saw that day in 2000 up on the border here were very similar to the victorious celebrations that Hamas fighters had last summer when we were covering the disengagement from the Gaza Strip, another unilateral withdrawal by the Israeli army. What's striking to me is that Hamas is now the democratically elected government of the Palestinians, and as Shep said, it's a very real possibility that Hezbollah will simply gain popularity over in Lebanon because of the Israeli strikes and become even stronger as part of the democratically elected government in Lebanon. Roger.

ROGER AILES: Let me just ask you one question: Does it look like a race against time for the Israelis and the Hezbollah is trying to slow it down so that eventually this thing is going to end up in a shoving match and then stop, or do you think this thing is getting worse and could blow wide open?

JENNIFER GRIFFIN: Well, my feeling, Roger, and from what we've been seeing, is that it's going to -- what the Israeli officials are telling us -- that this is going to go on for as long as it takes to clear out about 14 border villages in the southern part of Lebanon so that then an international force with some teeth, a NATO-led-type force, can come in there and make sure the Hezbollah fighters don't get within 12 miles of the border. They'll create a demilitarized zone. The only fear, of course, is that somehow this spreads beyond Lebanon, somehow the Syrians get involved, or somehow the Iranians try to get involved. At this point in time, I don't see that happening, but that is the fear, that Hezbollah has some secret weapon that they'll launch against Haifa or they'll hit the petrochemical plant in Haifa and create what is essentially a chemical bomb, and that could be the unexpected event that could occur. My prediction is no, we're going to see probably several more weeks of very strong fighting in this border region, but it's going to stay limited between Lebanon and Israel, and then they're going to try to demilitarize that zone.

ROGER AILES: Jennifer, get some sleep. Tell Eli great job. We're all proud of you over here.

JENNIFER GRIFFIN: Thank you, Roger.

QUESTION: Mr. Ailes?

ROGER AILES: Yes.

QUESTION: Okay. Look, everybody here knows FOX News is now part of the popular culture. You've exceeded many expectations. You also have still many detractors, including Keith Olbermann here the other day. Can you talk a bit about kind of this long, strange, winding trip from ten years ago to where you are today?

ROGER AILES: Well, you know, I think it seemed stranger and windier to others than it did to us. We sort of decided that the context for the news was important. I think one of the important things about our journalism is in ten years we haven't had to fire our executives or our reporters or our anchors or anybody else for making up the news. We actually go out there every day, just like you saw, and dig it out. Now, some people have biases against us, and we understand that. They were unhappy that we got in the game. Maybe we were a little too in-your-face at times. But basically what we do is we go to work every day, we cover the story, and we haven't been forced to eat our words because we're actually telling people what's going on. And sometimes there's more than one point of view to that story, and we try to reflect that. So it's actually been from people literally laughing at us in the first press conference to where we're out there every day beating the competition and, I think, building some of the greatest news careers in the history of television. The two people you just saw, for instance, and many others are just great journalists. And so it's -- you know, it's not quite as odd as it might appear from the outside to us who go to work there every day and try to deliver the goods.

QUESTION: And just quickly, since, as you know, Olbermann was here just the other day, he was speaking to all the critics here, do you want to rebut him in any way? Do you care one way or the other?

ROGER AILES: Look, I'd be tempted to say something, a wisecrack or something, but the truth is clearly he has no viewers except those he gets when he attacks FOX News and particularly has made himself committed to attacking -- continuing to attack Bill [O'Reilly] and, therefore, his family. And I really think that's over the line. I don't really want to comment on it. I don't believe in giving the guy any more oxygen to do this sort of thing. It just seems like the use of corporate assets for personal vendettas, which strikes me as odd. But you know --

QUESTION: Can you -- just sort of asking you the local station question again. My understanding is that as you come on to head the stations, that you want to go to more news and informational direction with them. Why do you think at a local level that's something that will draw more viewers to your stations, and what do you plan to do with the local news that you think will be more compelling than what perhaps the stations are already doing?

ROGER AILES: Well, let me answer the first part of that. The stations depend greatly on either syndicated programming they can buy or programming they produce. I think with all the expanse of networks and cable networks and everything else, a great deal of news is still local. And to a large extent what happens in those local stations and at local websites is going to be particularly interesting and will keep the stations commercially successful going forward, because I don't know whether you know, but as "Two and a Half Men" and "Family Guy" and some of these series end up, there is not much in the pipeline in terms of syndicated programming going forward. Trying to line up a station so that you have audience flow from syndicated programming, from a game show to a talk show to this or that, it is clear that the more we can become self-reliant within FOX with our programming, the better off we'll be going forward. That said, I just think every time you have a program, you can improve it. There are many ways to look at production, whether it's graphics, which people have said over the years that the FOX News Channel sort of set the standard which other people are now following, or more information to the screen or the talent you hire or the producers and how you teach them. Too, fair and balanced; that's one of the elements of it, but it's only one. Basically you want to tell the truth because if you don't tell the truth, somebody's going to come along, you're going to have to take it off the air, and then you're going to be embarrassed, and it's going to be a mess. So all those things make for better newscasts. All I've said is we're going to improve the local newscast and do more locally produced programming and more news and information.

QUESTION: Just a follow-up. If you could just talk about, also, further syndicated acquisitions you might make that you think fit better into that overall vision for the stations.

ROGER AILES: I really can't talk about that because it's not good if we're in the middle of negotiations on the thing. I will say that we announced the other day that we're going to produce a new morning show with Mike Jerrick and Juliet Huddy. We will produce that ourselves because we're -- at the moment our local morning shows are doing pretty well. They're going to give us a good lead-in into that 9:00 a.m. period. We'd like to develop a national show. We have the station base to do it. We have the inclination to do it. And we have the lead-in to do it. So it makes sense to give it a shot. And that's really all I can say.

QUESTION: And you don't know whether you will syndicate that show?

ROGER AILES: Well, it will be syndicated, yes. I mean, it will go out through 20th Century. It will be on the FOX stations, but also available to others.

QUESTION: Mr. Ailes, the expression, the slogan "fair and balanced" has been a flashpoint for critics and things. How do you define fair and balanced? Is it -- like on radio talk they define it as across the whole day, you'll have a conservative voice, a liberal voice, or a show like "Hannity & Colmes" -- you have one of each -- or there are voices that aren't heard elsewhere, voices from the right. Which of those or any of those or all of those --

ROGER AILES: Probably all of those. Fair and balanced is a matter of common sense, being fair to every point of view, trying to let everybody have their say. I always say to our journalists, "When you're doing a story, be sure there's some point of view in there that you don't agree with because if all you're doing is the story you agree with, you have no chance of being fair and balanced with it." So this is a great country. There are two parties who have several points of view. We have Ralph Nader more than anybody else in the presidential elections because I've known Ralph for 35 years. I think he has interesting things to say. We did the Democratic primary debates with the Black Caucus, Black Congressional Caucus, a very liberal organization, because we felt that -- first of all, they were trying to figure out where they could reach the American people. And I went and met with them, and they thought that the FOX News Channel delivered the biggest audience to their point of view. And we cleared time, spent a couple million dollars producing those debates and getting that done. So, you know, I basically believe everybody ought to be able to defend their point of view, and they need a place to defend it.

QUESTION: Mr. Ailes, I'm just curious if you could answer -- it seems to me that -- and maybe this is just a function of your viewership -- that all the missing women -- or a lot of the missing women are pretty blondes. And I just don't see compelling stories or maybe -- I'm just curious, is it because the audience isn't interested in women of color who disappear? Is it that their stories aren't as compelling? Does the audience not respond to those kind of women? Because it seems like it's always blondes, attractive brunettes, wealthy women who seem sort of entitled or have a place in society, but yet other women don't seem to be represented in that circle. Is that a function of the audience?

ROGER AILES: Well, I think you make a good point in that, you know, there are more -- actually more missing people, boys and girls, in minority communities. We did two this year of African Americans, actually, one somewhere in the Midwest and one in Philadelphia. Both stories sort of ended tragically, I think, pretty quickly. But we covered both of them for, you know, as long as the story went. I must say we didn't get probably the same amount of e-mail or traffic that you get on -- I think part of it is what I said. I think parents were freaked out about a senior trip or a graduation trip or something. So I'm not sure that was just because she was a pretty blonde girl. But you know, as with everything else in society, some people have it more fair than others. And you know, one of the great tragedies of the children in this country is that they're being forgotten. And Bill O'Reilly has been the primary champion of children, forcing some states to change

their predator laws by never getting off that story, despite the criticism. So he takes a lot of heat, but like everything in the world, you ought to give the good with the bad. And he feels strongly about that and has done well with it with, you know, basically putting judges on the screen who are not protecting citizens.

QUESTION: Mr. Ailes, do you have any plans for more on-air promotion of your journalism, if you're so proud of it? And I'm also wondering, is part of the problem that your primetime news stars sort of grab most of the attention when it comes to FOX News Channel?

ROGER AILES: Well, primetime has generally higher ratings, so they tend to get written about more. You know, we try to do as much promotion as we possibly can. We haven't spent $20 million marketing a single star, as one of our competitors has, although not their top-rated star, which I found interesting. You know, outside marketing money is hard to come by. We don't spend a lot on that. We try to do the journalism day to day. It's interesting that we're the Number 1 news channel and we don't do that particularly well or particularly expensively. So somebody is watching our news and saying, "I'd rather watch these guys." Now, we've had some reporters write that that's because the American people are stupid. Actually wrote that. And we just actually don't believe that. So therein lies the difference, I guess.

QUESTION: Recently the New York Times and the Washington Post were challenged by the U.S. Government for writing and allowing to be revealed certain information in news stories that appeared in their newspapers. And it caused a huge hue and cry from the ACLU and other organizations, and I was wondering, first of all, if you could comment on that situation; and number two, whether or not you also are under pressure to keep certain stories that are newsworthy under wraps.

ROGER AILES: No. I think all news organizations are aware when there are certain stories there. I don't know that we've ever been pressured. After 9/11 the news -- the heads of news got together to discuss taking Osama bin Laden tapes immediately to air without analyzing them and so on. And my argument was that we shouldn't do that because at that time the CIA and everybody else didn't know if he was signaling people, there were more attacks. If you were in Manhattan at that time, you weren't sure what was happening. My argument was we wouldn't take a video news release from the American Tractor Association and just put it on the air without slowing it down and analyzing it. I didn't believe being first with that was necessarily good journalism. So there are times that I think that being first is not necessary.

That said, on the New York Times the other thing is you have to look at -- you have to figure out where people are coming from. If you believe we are in the beginning of a worldwide war with militant Muslim terrorists, then you could take the FDR position. We need an office of censorship. We need holding camps. We need serious -- you know, FDR and Abraham Lincoln were wartime Presidents who believed they were in war, and as commander in chief, they had a responsibility to protect the nation. And they did some things that today would get them impeached probably. If you don't believe that, then obviously the public's right to know information is paramount, and that's why we have freedom of the press. In that particular story, the thing that interested me about it is that the Times did not report that anything the Government was doing was illegal. And therefore I would have looked at that and said, "Who does this story help? Does it help the citizens of New York, who already have 3,000 dead bodies lying down there, to put out this information because we're worried the Government might be doing something we don't know about, or does it help the terrorists to let them know what we know about how they're moving money?" That's how you have to weigh that. And I think that many people felt that there was no clear and present reason for the New York Times, in a time of war, to do that. But I would argue that under freedom of the press, they certainly have the right to do it. And it's -- you know, you can decide whether you want to maintain your subscription or not. That's why we have a free country.

QUESTION: Right here. However you feel about CNN, and I think we know how you feel, but it's pretty hard --

ROGER AILES: I like it. I think it's great.

QUESTION: One thing -- they're not Number 1 in the ratings anymore, but they have always had that one key CNN moment which was --

ROGER AILES: Angelina Jolie. That was their great moment.

QUESTION: The first Gulf War, which, you know, that will last in lore forever as the thing that kind made them, that brought them on the scene. Does FOX News have the same thing? Do you think that there's a FOX moment when you kind of --

ROGER AILES: We have very steady growth all the way. There were peaks and valleys with news events, and what we found on any news event that we held -- there's always audience decay. After an event's over, the audience goes back to whatever they were doing. We held more of the audience after the major news events than CNN did. So what happened is an event comes along. More people sample. They're flipping around, and they decided to stay with FOX. So over time -- and I've seen this on a chart -- we held more of the audience. So there was no single event.

QUESTION: Does that -- do you almost wish that you did, that there was one thing that you guys could always point to and they would make a movie about and that type of thing?

ROGER AILES: No. I think CNN had that defining moment in the Gulf War. They had zero competition in cable news. They were the only people around doing 24-hour news at the time. So they were very fortunate. MSNBC and we and -- operate in a world of competition. The world's changed dramatically, so I'm not sure that would happen. I think people flip through and see who they like and stay with who they like. I know that will always be.

QUESTION: Roger, I have a couple questions. One is about something that concerns a lot of us in our room, and that's the aging of our audience. One of the areas in which your competition feels you might be vulnerable is in demographics where they point to your ratings and say that you tend to, particularly on primetime, load up on older viewers who are outside the demographic and that your lead over them in the key demographics that really drives revenue isn't as great. Does that concern you?

ROGER AILES: It concerns me, but keep in mind the real numbers. The real numbers are 5- or 6-to-1 or 4-to-1 or whatever, and when you take the demo factor in, we are still 3-to-1 over them. So you can't get killed jumping out of a basement window. We have more viewers, therefore, we can go down a little further when there's a hit in the demos. I think what's interesting is younger people are not turning to news, newspapers, television and what have you, and it's interesting to see. You know, we also have some issues with Nielsen, which we are in debate over, because suddenly some of those people just got up. Nobody left. They just got up and gave their seats to their parents.

We don't believe that happened any more than we think the local people made the thing happen with Fox Broadcasting. So I think that Nielsen is trying to sort -- I think they're sincerely trying to sort out some of these issues, and we're in discussions with them now. All that said, younger people are becoming less interested in news; although they seem to be watching -- going to websites and so on. Nobody knows quite what they're picking up, but that's going to be the big question for the next couple years probably for all of us.

QUESTION: Quickly, a couple of policy things. You mentioned the video news releases. And before you took over FOX Television News Stations Group, seven of your stations, I believe, were criticized in a report more than any other station group for carrying a video news release without disclosing to the viewers that this had been supplied to them. Have you addressed that?

ROGER AILES: Yeah. The key phrase there before I took over, because I don't believe -- I think you have to disclose public relations for what it is. And the stations have been told. Will they always do it? Do they always do it? Who knows? The answer is yes. We have that policy. We don't put PR releases on and pretend they're news.

QUESTION: And what have you told your staff about Tony Snow and about --

ROGER AILES: Tony is a very, very nice man.

QUESTION: Can I follow over here on the other side of the room --

ROGER AILES: Sure.

QUESTION: -- on the public relations issue? I see you're talking to David Browder again after two years. There are still several reporters that never get their phone calls returned by FOX News. Can you explain why that policy exists and how you select which reporters do not get their phone calls returned?

ROGER AILES: I don't have any policy like that at all. I will talk to anybody that my media relations people suggest that we talk to. There are times that, you know, if we're treated totally unfairly and people come in with a total bias, and there's no use talking, that I suppose that could happen. You know, I don't know anybody I wouldn't talk to, and I think most reporters know that about me.

QUESTION: All the other news organizations come here virtually every press tour. You come every two and a half, three years. Can you explain your motivation for coming today?

ROGER AILES: It's our ten-year anniversary. We are celebrating ten years in the pit, and I was told it would be helpful for me to kick off the tenth year because we're going to be at our ten-year anniversary in October, for me to show up, and I have other meetings in Los Angeles, and I said, "What a great plan. I miss all my good friends here in this room," and I was hoping I would get a chance for a reunion. So I came. It's pretty simple. There's no nefarious strategy here whatsoever.

QUESTION: Have you seen any evidence in your audience of Katrina fatigue? I'm way back here on the far right. Any audience evidence of Katrina fatigue, and do you think that's a problem?

ROGER AILES: I think there's always story fatigue on every story, and that's one of the reasons you move on. Sometimes people stay with a story too long. Sometimes they don't stay long enough. You know, audiences tire of the same story regardless. You know, as long as it's relevant, you try to cover it. We are going back and trying to figure out what happened, and looking at how the money is going to be stolen for those levees next time. But, you know, it's a sad story and people who, because of United States policies, were in the condition that they couldn't even get out of there, they were in such poverty. I don't know how they depended on the United States for 100 years and someone suddenly thought they were going to be saved in 24 hours. I think we need to address the underlying issues here of how do you help these people as well as rebuilding the levees, but that's what we are trying to do with so much coverage.

QUESTION: Talk about --

ROGER AILES: I am told I've got two more questions. That's it.

QUESTION: Way in the back here. On and off throughout the years and most recently talk of maybe going into the fray against your competition at 6:30 Eastern time with a mainstream network newscast perhaps anchored by Shepard Smith, what are your feelings on that now, particularly after talking about the audience erosion? ROGER AILES: It's a complicated issue. Would I like to do it? Sure. I basically am competitive, and I have great confidence in our people and great confidence in Shep Smith. But there is not a great demand for another newscast at 6:30, and you now have three, you know, important people doing those newscasts, and the FOX stations do better with other types of programming at that time. With that said, it's unlikely, and there's nothing on a fast track to do that. Do I think Shep would do well? You bet.

QUESTION: Far back -- given that television is an industry that chases success, why do you think more media outlets have not emulated FOX News? Is it that they don't quite understand what makes FOX News successful, or is it that this is much harder to do than they might assume, or is it that they're just sort of stuck in their old ways?

ROGER AILES: I don't know the answer to that really. I wish I could give you an answer to it. I think they have tried to copy in some ways, but superficially. I think that some people, they have their own view of what the news is, and, you know, they want to do it their way, I guess. That's fine. When the war broke out in Lebanon, you have Hezbollah and Israel in a death struggle, families being bombed on both sides, Iran and Syria looking over their shoulder, United States trying to figure out what to do, completely desperate situation that could end up in World War III.

One of my competitors spent three days on Cyprus trying to find somebody who didn't like the government because the plane was four hours late and they didn't get a candy bar in line. I thought that was not where the story was. I thought the story was in Lebanon. Those are choices that are made every day by news people. And why people make the choices, I think I can defend the choices we make if asked, and I assume they can defend their choices.

QUESTION: One more. Is that it?

ROGER AILES: One more. That's it.

QUESTION: You mentioned that at 6:30 that the landscape is already full. So why get a morning show, and is it because you see an opportunity? It's kind of a two-parter. You see an opportunity to compete --

ROGER AILES: I see 6:30 is full, so why am I doing a morning show?

QUESTION: Right. You said the landscape was full on that end. So why do a morning show after your local affiliates?

ROGER AILES: I'm not sure the morning landscape is as full as -- if you've got Katie and Charles and Brian up there at 6:30, that's a pretty full landscape. The morning show landscape at 9:00 a.m. may be a little more open than that. But it's -- a lot of money can be made in morning television. And in the end, these are capitalistic ventures, and they make money because then they get to pay people and journalists get to work and we're all happy.

QUESTION: Why do it in January and not in the fall?

ROGER AILES: That's an interesting question. We did look at it in the fall. That's what's called a hard-launch in the fall or soft-launch in January. The hard-launch gives you time to put together more sophisticated marketing materials and line up stations and build up a big hype and do all that. I didn't hype the FOX News Channel coming in, and I'm not hyping this show coming in. I don't hype things coming in. I just say we are going to try to do it.

And so I felt that -- my own view is once a decision's been made, execute it as quickly and confidently as you possibly can. It's just a style issue more than anything else. There are advantages to launching the show in the fall. There are advantages to launching more quickly in January. There are disadvantages to both. But once I make a decision to go, I just go. And, you know, whatever happens, happens.

QUESTION: Any chance you might take more than one question?

ROGER AILES: Okay. If it isn't --

QUESTION: You only come every 10 years.

ROGER AILES: That's true. This one's for the next time. This will be the first question in my next session, three hours. Go ahead.

QUESTION: You mention video news releases. It doesn't sound like you think they should just be put on without being labeled. How do you feel about taxpayers' money being spent to produce things that were obviously meant to be aired without too much explanation?

ROGER AILES: Give me an example. You must have something in mind.

QUESTION: There were things that different departments in the federal government were issuing as sort of video news releases. These aren't all corporate products.

ROGER AILES: But the government is the same. If they're putting out a video news release for the Department of Agriculture or whatever, it's still a news release from the government. I don't think media works as a tool of the government. I think we have a tool to resist -- we have a responsibility to resist in an honest way the government. I happen to be a guy who doesn't get up every morning hating my country because I just don't want to live in Somalia. And I think we have it very good here, and I think we have a responsibility to treat our country the same way our country treats us, which is to assume that they are innocent until proven guilty. I have no problem airing anything once they're proven guilty, and I have no problem investigating to see if they're guilty, but it's just an attitudinal difference about freedom of the press. Freedom of the press didn't invent democracy. Democracy invented freedom of the press. Democracy guarantees a free press. Freedom is dependant totally on a fair press so that people can hear everything and make up their own minds. So, you know, I'm the last guy that would get pushed around by the government, I would assure you.

QUESTION: I was thinking more philosophical. Is this how you would want money --

ROGER AILES: I don't want taxpayer money spent on a lot of things that they're being spent so, so I'm sure that is one that I think is probably not useful. On the other hand, if the taxpayer's money is going to put out how to handle yourself in the next terrorist attack, that might be a good use of taxpayer money from some government agency. So I think it's always a case-by-case basis. Thank you all very much.