Sarah Palin recently declined a new contract offer from Fox News to continue her role as occasional on-air contributor, a position she's held since January of 2010. I've not seen much speculation about why she left the network, but from publicly available information it was probably a mutual decision to part ways. There's been no leaks about the size of the new contract that Fox offered to Palin compared to previous one, which leaves us with few possibilities, some more likely than others.
* Fox offered Palin a larger contract in order to keep her with the network. Unlikely, given the former Governor’s declining entertainment value and her already non-existent political value. None of the cable networks really cares about politics beyond the national level, and Palin has no national political experience to drawn on for commentary. Nor does she have any unique views or ways of presenting them, like Glenn Beck did. The McCain campaign's attacks on Barack Obama as not being experienced enough for the White House is ironically a major drawback in the value of Sarah Palin contributing anything of substance to Fox News on national issues.
* Fox offered Palin a smaller contract either to keep her with the network in a reduced role, or to "softly" fire her to prevent a PR incident like the one that they had with Glenn Beck. This scenario is about as likely as any, and it true, we'll probably read about it in a book in a year or two. If we don't see that, then it probably didn't happen.
* The contract offer is PR, a small glimpse at a round of failed negotiations in which one side eventually walked away unhappy and with a grudge. Very unlikely. Given the character of the Palin camp and Fox News, I'm sure one of the two would have leaked unflattering details from any failed negotiations by now.
* Both sides were ambivalent about the relationship and neither really cared about keeping it going. Regularly contributing to Fox News would have meant that Sarah Palin either had to install a costly miniature TV studio with at least one HD camera somewhere on her property, capable of talking to FNC's satellites, and then pay a small crew to operate it, or she had to regularly travel to a remote studio capable of that every time she was to appear on the network. I'm only somewhat familiar with how these things work, so I don't know how likely it is that such a remote studio location would be available to Palin within a reasonable distance of her home. It's possible that she was only able to contribute when she was somewhere in the lower 48 states, which is the situation that Glenn Greenwald finds himself him living in Brazil by writing almost exclusively about American politics, or that she had to travel significant distance within her home state.
My guess would be ambivalence. I doubt Palin's contributions were valuable enough for Fox to offer her a larger contract, and obviously they weren't of such a low value that Fox wasn't interested in bringing her back at all. In all likelihood, Palin probably decided that for the money she was getting, the travel and hassle just wasn't worth it, and Fox while looking at the numbers on their side didn't see it as any huge loss to end the relationship.
So what's her next move?
Don't count on Palin running for the U.S. Senate against Democrat Mark Begich in 2014. Alaska is like many states in that it has a bit of a schizophrenic personality. It liked Palin for Governor at one time, giving her a job approval of 89-93% in the spring of 2007 and it elected her Lt. Governor, Sean Parnell, to replace her who is ideologically similar. But her job approval ratings steadily fell during and after the 2008 election and kept falling until direct polls were ended when she quit halfway through her first term. By the summer of 2009, her approval was down to 59%. Another poll in November of 2011 found Palin's favorable rating (different than job approval and usually higher than job approval) to be just 29%.
The last available poll from early 2011 found that Begich's job approval rating was 57-33%, which if it holds, should make him a strong favorite to win reelection. Begich is the polar opposite of Palin in ways other than ideology. Whereas Palin is a lightening rod for attention due to controversial statements (but not necessarily views), Begich has been working under the radar since being elected in 2008. If Palin runs against Begich, she'll soak up all the attention and money on the Republican side which should easily clear the field, but she'll be at a distinct disadvantage after that. It would probably be to Begich's benefit to have to run against Sarah Palin, as opposed to another Republican that is popular in the state -- perhaps from within the state government -- which could give us a re-run of the 2012 race in Massachusetts where reasonably popular moderate Scott Brown ended up losing to an acceptable liberal candidate in a state that obviously likes liberals.
The state has also shown an appreciation for moderates and some disdain for ideological hardliners. Tea Party favorite Joe Miller defeated Lisa Murkowsi in the 2010 GOP primary 50.9 to 49.0, only to lose to Murkowski in the general election when she ran as a write-in candidate. If Murkowski couldn't be beaten by a popular Tea Party'er in a year that should go down as the most favorable ever for a Tea Party candidate, chances are that Palin won't be able to unseat her either. And with Republican momentum from 2010 already reversed in 2012, it's likely that the Tea Party brand has already reached its maximum benefit, politically.
Given the way she left office and her awful favorable ratings, it's likely that there's no political job attainable for Sarah Palin the state of Alaska. At least not for many years. Her popularity is much greater in the lower 48 states and some of those states do present opportunities.
It was rumored a few years ago that Palin would move her family to Arizona, which may have been her largest base of support after the 2008 election, as a home base to launch a 2012 presidential campaign. But that never happened, and any carry-over support she might have had from the 2008 election has now almost surely evaporated. She'd also have to deal with the changing demographics in Arizona that favor Democrats: a growing Hispanic population. Arizona will be looking more like Nevada every year, more Hispanic and more liberal.
The state may even become a battleground state most similar to North Carolina within the next four to eight years, initially going for a Democrat seemingly out of the blue -- perhaps rising star Julian Castro, the current Democratic Mayor of San Antonio, Texas -- before just barely voting for a Republican the next election. But like North Carolina, Arizona may be destined for battleground status, before turning a conservative shade of blue. John McCain may remain viable, but Jan Brewer (who is about to be termed out, but can run again later) may find the state increasingly challenging down the road. (All things considered, remember that Brewer's predecessor was current DHS Secretary and Democrat Janet Napolitano.)
Texas may hold some promise, being an oil state like Alaska and deeply conservative in many areas. Very recent polls show that Rick Perry is almost certainly done as Governor in 2014, which could present an opportunity for Palin if she moves there very soon. Her dealings with Big Oil in Alaska would be an asset in Texas and that is probably just about the only thing she has to offer any state at this point. But if Texans are done with Perry, how likely are they to replace him with the ideologically similar Palin?
Palin's prospects for 2016 are hard to judge. As a "true conservative" (read: social conservative), she may have an easier time winning the primary after the successive losses of two moderate Republicans, John McCain and Mitt Romney. But you have to remember that Romney defeated candidates far more conservative and inflammatory than Sarah Palin, like Rick Santorum and Michelle Bachmann, and McCain arguably beat more well known candidates like Rudi Giuliani.
It's also important to understand how Palin's brand of social conservatism could be an asset in the next GOP primary and a liability in the next general election. Palin is opposes same-sex marriage in a country where a majority now wants it legalized, and supporting it for the first time in history became an asset instead of a liability for a Presidential candidate (Barack Obama). She also opposes abortion in all cases, including rape and incest, which will make her deeply unpopular with many conservative women and Independents, especially when polls have found that a majority of Americans now support the right to legalized abortion. Her support for teaching creationsim in schools, which is illegal in the United States, and skepticism of the scientific consensus on global warming isn't going to help her practically anywhere.
It remains to be seen if Palin's opposition to an assault weapons ban will help or hurt her, because we don't yet know how the gun debate is going to play out in the four years between now and the next presidential election. Though it is worth noting that public polls routinely show support for banning assault weapons by a 2-to-1 margin. Her open advocacy for preemptive war with Iran is also likely to be quite unpopular.
Perhaps the most important issue would be that of immigration reform. Palin advocated some pretty draconian measures to deal with illegal immigration during the 2008 campaign, like closing the border with Mexico, and she supported Arizona's controversial SB-1070 immigration law, some of which was struck down as unconstitutional after her endorsement. She has tempered that somewhat by supporting a path to citizenship for undocumented immigrants who haven't violated any federal laws (presumably other than immigration laws), but opposes the very popular (outside of Washington) DREAM Act.
Palin's best bet would be to do what she just did: jettison her public persona and lay low. Ideally, she should wait until a Republican is in the White House and hope that she can work her way into a low profile appointment, a job that won't bait her into making any controversial statements, but would still give her much needed experience within the federal government. That should open her to many opportunities as a lobbyist, a job she could then take and keep forever it it suited her, and allow her to craft an entirely new image, one of a serious politician and a power player in Washington. It won't take much more than that to ingratiate her with the GOP establishment, which she'll need to build and run a viable campaign for public office later on, and her personal popularity outside of Alaska should make her a formidable fundraiser in her own right no matter where she goes.
Or she could return to the private sector. I'm not sure what she'd do there, because her Big Oil experience only makes her valuable as a lobbyist in Alaska. But I'm sure she could find something.