O'Reilly-Fox deal shielded star from firing over allegations

Former Fox News star Bill O'Reilly had a deal with the 21st Century Fox network that he couldn't be fired over unproven harassment allegations, a fresh revelation that casts doubt over corporate-governance standards at Rupert Murdoch's media empire.

O'Reilly's contract said he couldn't be dismissed based on an allegation unless it was proven in court, Jacques Nasser, an independent Fox director, told U.K.'s Competition & Markets Authority, according to a summary published Wednesday. O'Reilly, the former host of The O'Reilly Factor, has denied all wrongdoing.

Fox has been dogged by criticisms over its handling of sexual-harassment claims made against O'Reilly and the late Roger Ailes, former CEO of Fox News. While Fox made changes to governance and policies, the controversy has weighed on its $15.3 billion (11.7-billion-pound) bid for Sky Plc. Competition regulators are reviewing the deal for factors including its impact on media plurality and the Murdochs' adherence to U.K. broadcast standards.

"It's another nail in the standards coffin as far as Fox is concerned," said Steven Barnett, a professor of communications at the University of Westminster. "It speaks volumes about the nature of a company if you can pile up multiple accusations and be protected by such a clause."

Fox declined to comment.

Contractual clauses such as the one described by Nasser are coming under scrutiny as sexual-harassment claims sweep through Hollywood and beyond, following the downfall of Harvey Weinstein, the movie mogul accused of rape and other wrongdoing at the studio he ran.

Weinstein's contract at the Weinstein Co. said that as long as Weinstein covered the costs of settlements and judgments for misconduct including sexual harassment, he could keep his job, according to a report by TMZ, which cited the 2015 contract. Weinstein has denied any non-consensual sexual activity.

Nasser, at a hearing with regulators on Oct. 25, said that when the board was informed of sexual harassment allegations against Ailes, it reacted quickly and he left the company within days. But with O'Reilly, it was advised that the situation was different due to the terms of the employment agreement and because the evidence was uncertain.

Board members debated the timing of O'Reilly's dismissal, Nasser said. Some wanted to dismiss him immediately, while others wanted to wait for his contract renewal, he said. The board didn't know the value of settlements O'Reilly had made with various accusers, Nasser said, in line with public comments from Fox Chief Executive Officer James Murdoch.

When Fox renewed the contract, it included protections for the company aimed at harassment, including that O'Reilly could be dismissed if the company was made aware of other allegations or if additional relevant information was uncovered in a company investigation, Fox has said.

Fresh allegations of misconduct against O'Reilly surfaced in April, following a New York Times report that five women had received payments from Fox or O'Reilly for agreeing not to sue or talk about their allegations that O'Reilly verbally abused them, subjected them to unwanted advances or made lewd comments.

Fox News announced his departure on April 19, referencing a "thorough and careful review of the allegations."

In hindsight, there could have been better governance structures in place at Fox News to ensure the board knew of the allegations at an earlier stage, Nasser, a former Ford CEO, told the U.K. competition regulator.

Oversight of Fox News was also addressed by Nasser at the hearing with the CMA. Critics of the Sky takeover have warned of the risk of a "Foxification" of Sky News, alluding to Fox News's reputation as a network more sympathetic to right-leaning viewpoints, though others have pointed to regulatory commitments that would prevent that. Fox News, which stopped airing in the U.K. in August, was faulted by the U.K. communications regulator this week for prior biased reporting.

In the U.S., the public has already made up its mind which political party it will support and therefore news media is unlikely to influence voting decisions in that country, Nasser told the CMA, according to the summary.

Anousha Sakoui contributed to this article.