Inside Fox News, morale is sinking. “It’s the worst I’ve seen it,” a female manager said. Employees don’t know when the harassment and racial-discrimination lawsuits will stop. “I have people asking, ‘Are we having budget cuts to pay for sexual-harassment lawsuits?’ ” the manager told me. Employees wonder why Murdoch is allowing the slow drip of negative headlines to continue when he could answer them with a major change in management.

Murdoch’s advisers argue he is making positive changes, appointing a new head of HR and hiring female executives to head the finance and advertising departments. Employees now must attend “sensitivity training” sessions. And Ailes’s pantsuit ban has been lifted. According to sources, Scott has taken it upon herself to encourage women to wear pants on air. Ailes loyalists continue to be moved out: Last week, Fox’s longtime head of graphics, Richard O’Brien, left when his job was eliminated in a reorganization…

Some wonder if a kinder, gentler Fox News can replicate the ratings success that Ailes’s authoritarian culture maintained for 20 years. Under Ailes, Fox anchors and executives marched in lockstep, keeping off-camera drama out of view and working together to sell Ailes’s point of view. Now Hannity takes to Twitter to accuse a colleague of plotting to get Bill Shine fired, and competition from the left and the further-right has left Fox News with a programming challenge. The Murdochs are quietly looking for a new programming executive to run the network. According to sources, James wants to recruit David Rhodes from CBS News (Rhodes is under contract). Rupert is interested in Wall Street Journal editor Gerry Baker, or Rebekah Brooks. One source said Rupert’s daughter Elisabeth is also being discussed as a candidate.