How Fox Is Making Hay from Tea Parties

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His ultraliberal rants were one reason MSNBC saw its first-quarter ratings jump by 22% in prime time. Olbermann draws 1 million folks every night at 8 p.m. and another 635,000 for a repeat at 10 p.m. Better yet for MSNBC, its new liberal voice Maddow goes glib for glib with the venerable Larry King at 9 p.m., beating him as often as not.

The payoff for all this politics on the tube, of course, is ad revenues, the Holy Grail of TV. With liberalism pumping up MSNBC's ratings, media analyst SNL Kagan figures its ad sales will grow by about 4% this year, to $235.9 million—no mean feat, coming at a time when the rest of the media world is expected to see ad sales fall. Let's not cry for Fox News, however. It's still a monster, with projected 2009 ad sales of $563.7 million, total revenues of nearly $1.1 billion, and a profit margin of nearly 44% that most media properties would die for. (Do I need to explain further why news channels are so important to their corporate parents?)

Oh So Lucrative

As for CNN, it seems perfectly happy to let its two competitors slug it out. "We're happy to let Fox and MSNBC stake out their positions on the left and right," says Jonathan Klein, president of CNN's U.S. operations. "We're going to do what we have always done, provide the objective, quality news that our audiences come to expect from us." What CNN has is a killer brand name, of course. That's helped it to double its earnings over the last five years, to what SNL Kagan estimates to be around $455.5 million last year—just shy of Fox's $467.3 million—by heavily selling its news to overseas markets. Its ratings are up by 17% this year, but dropped by 10% in the lucrative prime-time hours (and a staggering 22% among the 25- to 54-year-old news watchers that advertisers target), so you have to wonder if the bean counters at CNN's parent Time Warner have started to sharpen their pencils.

Still, there is some good news on the dial as well for CNN, only at its smaller sibling HLN, formerly known as Headline News. HLN's ratings jumped by 62% in the most recent quarter. The big winner there is Nancy Grace, whose 8 p.m. show jumped by 82% in the most recent quarter, to 1.1 million viewers. (Better yet, it nosed ahead of Olbermann in the key 25-54 age group.) Of course, Grace doesn't exactly read the news, either. Her forte is racy crime stories. Ah, yes, even at CNN it seems, the winning formula can boil down to offering up a little news with the entertainment.

Grover is Los Angeles bureau chief for BusinessWeek.

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