By Jessica Toonkel
(Reuters) - Roger Ailes, who built Fox News into a profitable ratings powerhouse, and Twenty-First Century Fox Inc <FOXA.O> are in negotiations over his departure from the cable news channel following allegations of sexual harassment, a person briefed on the discussions said Tuesday.
A Fox statement said a legal review into the accusations was ongoing and that Ailes was working. Ailes' attorney, Susan Estrich, told CNN that there was no deal yet and any announcement on an agreement would be made by Twenty-First Century Fox.
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An exit would represent an unexpected turn of events for the 76-year-old media executive who advised several U.S. Republican presidents, including George H.W. Bush, and built Fox News into the most-watched U.S. cable news channel.
Conflicting reports of an imminent departure for Ailes played out at the sidelines of the Republican National Convention in Cleveland, including tweets from conservative political commentator Matt Drudge saying the Fox executive had in hand a $40 million exit package.
Former Fox News anchor Gretchen Carlson sued Ailes earlier this month, claiming sexual harassment. Ailes has denied the charges. Fox hired the law firm of Paul, Weiss, Rifkind, Wharton & Garrison to conduct an internal investigation.
New York magazine followed up with reports of other women who said they had been harassed by Ailes as far back as the 1960s. On Tuesday, the magazine said that star Fox News anchor Megyn Kelly had told investigators hired by Fox that Ailes "made unwanted sexual advances toward her" about 10 years ago.
According to the report, which cited anonymous sources, lawyers for 21st Century Fox Inc, gave Ailes a deadline of August 1 to resign or face being fired for cause.
Ailes had long been a confidant of 21st Century Fox Executive Co-Chairman Rupert Murdoch, who named Ailes founding chief executive of Fox News Channel in 1996.
But as scrutiny over Ailes increased in recent days, Murdoch and his sons, James and Lachlan, came to agree that he should leave the company, according to New York magazine.
Drudge on Tuesday tweeted an image of a page from a document purporting to be Ailes’ separation agreement with Fox that was later taken down.
The document was replaced with an unattributed statement that said, "Roger Ailes has never sexually harassed Megyn Kelly. In fact, he has spent much of the last decade promoting and helping her to achieve the stardom she earned, for which she has repeatedly and publicly thanked him.”
Ailes' lawyer could not immediately be reached for comment.
Ailes departure with no apparent successor will raise questions about the future of Fox News, known for a lineup of politically conservative commentators. The network was the most-watched basic cable television channel with an average of 2.2 million prime-time viewers for the year through June, according to Nielsen data.
(Reporting By Jessica Toonkel; Writing by Anna Driver; Editing by Cynthia Osterman)