Tucker Carlson's abrupt exit from Fox News is likely to hit short-term ratings but could nudge more mainstream advertisers to consider a network they have snubbed for being too partisan, investors and analysts said.
News of his departure on Monday wiped nearly $1 billion from the market valuation of the network's parent company, Rupert Murdoch-controlled Fox Corp. The stock also closed lower on Tuesday.
"It's a huge deal," said Matthew Tuttle, head of Tuttle Capital Management, an investment firm that is betting against Fox shares.
"The 8pm slot is important and they will lose viewers in that spot. They need to find another Carlson, that is going to be the problem. They need to pull a rabbit out of the hat."
The conservative-leaning Carlson's prime-time show was the highest-rated cable news program in the key 25-to-54 age demographic on Fox News - the most-watched U.S. cable news network. It averaged nightly viewers of around 3.4 million in March, according to Nielsen.
A company spokesperson said Fox News has been number one for 22 years and that Monday's show was not only top across the board, but grew from the last show hosted by Carlson, pointing to Nielsen data that showed it pulled in about 2.6 million viewers.
Fox News is in "rebuilding mode" and it will likely take time for the stock to recover as viewership takes a hit, KeyBanc Capital Markets analyst Brandon Nispel said. The market valuation drop "seems fairly high" though, he added.
"We wonder what Fox is going to tell advertisers. It's likely that advertisers who were seeking that audience may have limited other options for conservative news viewership without skewing too conservative."
Carlson's exit could, however, prompt more mainstream advertisers to consider the network.
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