Autumn of the Moguls

My Misadventures with the Titans, Poseurs, and Money Guys Who Mastered and Messed Up Big Media

Michael Wolff

HARPER PERENNIAL

for Alison

Contents

Cover

Title Page

Prologue

Book ONE: Spring and Summer 2002

1 THE COMEDY

2 MY TABLE

3 LUNCH

4 THE POWERS THAT BE

5 THE PARTNER

6 MY THEORY

7 THE BALLAD OF JEAN-MARIE

8 IN THE SAME BOAT

9 BOB PITTMAN—A DIGRESSION

10 NOT GETTING IT

11 BARRY BUFFETT

12 AND THEN THERE WAS MURDOCH

Book TWO: Autumn

1 THE LIFE OF THE PARTY

2 AILES AND TRUMAN

3 MY DINNER WITH RUPERT

4 THE REHEARSAL

5 THE OTHER PANEL

6 THE FIRST DAY

7 THE MISSING (MEL AND SUMNER)

8 CHARLIE AND MICHAEL

9 MORE MICHAELS

10 KEN AND STEVE

11 MORE MICHAELS AND MORE DINNER

12 KURT AND HARVEY

13 TERRY, PETER, AND JEFF

14 THE MAN UP THERE

15 UNREAL PROPERTY

16 THE BIG EVENING

17 THE GUEST LIST

18 Martha

19 TINA

20 AND STILL MORE COCKTAILS

21 PINCH

22 THE FINAL DINNER

23 BARRY TRIUMPHANT—SORT OF

24 WALTER

EPILOGUE: WINTER AND SPRING

INDEX

Notes And Acknowledgments

About the Author

By the same author

P. S. Ideas interviews & features …

Copyright

About the Publisher

PROLOGUE

A flashback, already

On the tenth day of the new millennium, Bruce Judson, a former Time Inc.-er, left a long message on my machine. Judson, who had formerly been an assistant to various high-ranking Time Inc. ministers, was making a joke, which I only half listened to, about some meeting we had been at together.

Judson and I—with Time managing editor and future CNN chairman Walter Isaacson—had sat on a committee at Time Warner that had decided to recommend that the company not buy AOL in 1994. But why was Judson talking about this now? I wondered as I got into the shower.

It was only in very slow motion that Judson’s message started to seem coherent in a more or less breathtaking way.

Indeed, it is almost impossible to convey now, from several years’ remove (even knowing the ultimate outcome), the unlikeliness, the utter disconnect, the lunacy of the entire far-fetched scenario: that AOL would buy Time Warner, that Time Warner would let itself be bought.

Nothing, perhaps, in business history, had ever been this … farfetched.

Jumping from the shower, dripping wet, grabbing for a towel, I flipped on CNN.

A moment later, I got a call from Caroline Miller, the editor in chief of New York magazine, where I wrote a weekly column about the media business. She seemed both aghast and excited at the same time.

“What do you want to do?” Caroline asked, balancing the mundane and the momentous.

In fact, holding my towel, I was not at all sure what to do. I felt small and inconsequential.

“I don’t know,” I said. “I guess I better get over there.”

As I might run out to cover a fire, I threw on some clothes and caught a cab over to the news conference where they were getting ready to announce the merger.

What was the proper affect here? Were we supposed to regard this as just a business story? Market reach, share price, boardroom stuff, instead of alignments, power shifts, and virtual geopolitical moves? The auditorium was filling up with business, media, and technology reporters, which for a second seemed surprising—why were they here? Where were the reporters from the national desk? The foreign desk, even? (Is this just my bias, not thinking of business reporters as real reporters? And technology reporters as an even lower order?) We’re going to miss the meaning of this story, I started to think, because the right desk doesn’t exist. Perhaps there should be a corporate-state desk. In that light, the AOL—Time Warner merger might be up there at some Munich Pact—Suez Canal—League of Nations level, or an entirely new kind of corporate-historical concept.

Something else: Reporters at other kinds of events—political events, disasters, crime scenes—are always nosing about, kibitzing, asking each other what they’ve got, but at this event, everyone just sat down and waited to be told what was what.

For a black-helicopter moment, a power move so amazingly tectonic that history would be written from here, this joint press conference was pretty bland.

The long lenses and porta-video packs were down in front of the auditorium when Time Warner CEO Jerry Levin, looking professorial and rumpled in what would be much-analyzed chinos and open shirt, came onto the stage, followed by AOL chairman Steve Case, in J.C. Penney-ish gray suit, then CNN’s Ted Turner, then the new co-COOs Bob Pittman (from AOL) and Dick Parsons (from Time Warner), and then Mike Kelly, AOL’s CFO. Everybody but Case sat down on the Dating Game— like chairs. Case opened, forcefully. But did this mean that he was the big cheese or just that he was introducing Levin? Levin indeed turned out to be the real presenter. He gave the details, such as they were, of the deal, and the philosophy, such as it was, and sent the clearest signals, to the extent that any were clear, about what was actually happening here.

It was not a businesslike presentation at all—none of the overload of information that is customary at merger announcements, the charts and bullet-pointed handouts—but, befitting a moment of at least as much political as commercial significance, a wholly symbolic tableau, although all the symbols were carefully veiled.

To do justice to the many conflicting and various unuttered messages that were being sent here, it was, I thought, probably best to look at this the way we used to look at the lineups and hierarchies and seating positions on May Day in Red Square. But the press, much of which was now owned by the merged company and therefore suddenly (as long as I am in this metaphor) something like the Soviet press, took the most literal of views.

In this view, all mergers are good mergers. Or, if not, they are superseded by even larger mergers. Mergers, in other words, are inevitable—and therefore, in some sense, unchallengeable.

Indeed, just a few months before, in what was then the biggest media merger, CBS had combined with Viacom. (The CBS and Viacom merger and now the AOL and Time Warner merger received more column inches of coverage than any other mergers before them—not least of all, of course, because they were about the media itself.)

Win-win was the most popular instant analysis. I wonder if we were this brain-dead just because we were so caught off guard, or because we or our colleagues had, instantly, made so much money off the deal (nearly 2,000 Time employees made, at the moment of the merger, $1 million or more, estimated the New York Post) that it was hard to think through the euphoria or jealousy, or because, as business reporters, the whole point is just to analyze with respect to up-and-down and not with an eye toward character, or consequence, or forest-for-the-trees.

It was not just the biggest deal that had been done by any company ever—the capstone of twenty years of more and more outsized business mergers—but it was a statement of philosophy too. This is how the world will be; this is the future. Indeed, all big deals had always portended more big deals—you were just upping the size of the big-deal measure.

As I sat in the auditorium, I was pretty sure nobody was thinking about how we had reached this point.

It took an odd person to be able to remember all the deals that had led us here.

Indeed, part of why we were here was that Time Inc. was a terrible deal maker.

All but faded from corporate memory was the name Temple-Inland, a paper mill that Time Inc. had bought in the seventies—though, arguably, the paper mill had bought Time Inc. Forest products became a third of the Time Inc. business, and the Temple family, from Diboll, Texas, among Time’s largest shareholders. This hilarious combination was undone not too many years later in a deal that led Arthur Temple, who, in effect, was given his company back, to remark (apocryphally or not) that he felt like a whore—he sold what he was selling but got to keep it too.

But then you had Warner’s Steve Ross, who had converted his father-in-law’s chain of funeral parlors into a controlling interest in a parking garage enterprise, which in turn he had traded into a talent agency and then acquired the fabled, but mostly moribund, Warner name—and, virtually overnight, reconstituted an entertainment empire.

And yet, being a good deal maker did not necessarily mean you did successful deals. Because a great many of the deals that Steve Ross did were lousy. There was, for Ross and Warner, most memorably, and in a weird foreshadowing of what happens when old guys get enamored with technology, the Atari deal. In 1976, Ross acquired the go-go technology enterprise, and, in short order, it brought Warner to the edge of bankruptcy.

Indeed, most deals, we learn from the fine print of the history of mergers and acquisitions, turn out to be lousy deals.

But there are good lousy-deal makers and there are bad lousy-deal makers.

The Time Inc. guys were historically bad lousy-deal makers.

The good and the bad in this context most often emerges from what is called company culture.

The Time culture (which does not exist anymore at Time) was aloof and clubby. Working at Time was a higher calling than other professions. It was avocational more than vocational—you worked there because you were better than the people who were not working there.

If you looked a certain way, had a certain sort of Ivy League, good-sport-jacket, furrowed-brow assurance, the elevator crowds would really part for you at the Time Life Building. The secretaries and salespeople and whoever else worked there expressed an almost physical deference to the true Time man. And you always knew who he was, as clearly as you would a priest among the functionaries at the Vatican.

Much of this culture—this aloofness from the real world—came from Time founder Henry Luce himself: the son of missionaries, inheritor of Wasp rectitude and old-money Republicanism, he valued assorted snobberies more than mere money.

Hence, Luce’s corporate offspring, or the offspring of his corporate offspring, were, or feared themselves to be, corporate weaklings.

They were, for instance, afraid of Steve Ross. And, out of that fear, admired him.

Because he did deals.

But it wasn’t only gonifism on the rise, the triumph of the vulgar Hollywood Jews over the buttoned-down Wasps. It was not just a philosophical or temperamental tide, but a technical one as well.

You had to understand deals not just as the process of putting companies together to make bigger companies, but as a process of using money in a way that increased your ability to use more money.

Leverage was the thing.

Media was a financing game. Media was like real estate.

One asset was meant to mortgage another.

The more you mortgaged, the more you could mortgage.

The more deals you did, the more deals you could do.

It had been said before: If you borrow a little, the bank owns you; borrow a lot and you own the bank.

This required a head for numbers and hubris too—somebody with a big ego who could count. (Although there were many failed instances of men who tried to step up merely on the basis of hubris.)

Such men became the instruments for the creation of vast companies that were—sometimes to a fully realized degree, other times frustratingly falling short of their radical idea—not really companies at all, not collegial enterprises, not thematic expressions, not coherent functions, but extreme reflections of themselves and of their ability to do deals.

Simply, moguls led media companies. If you didn’t have a good mogul, you didn’t have a good media company.

The entire Darwinian process of the media business was not about the winnowing out and promotion of good media, or good companies, but the natural selection of good moguls.

And the whole game was the rise and fall of these sui generis, savantlike beings—around them, you might argue, the business itself became something of an afterthought.

And so, in the nineties, there was the Time and Warner merger. Then there was the deal under which—to hold down the massive debt incurred from the Time and Warner deal—a piece of Time Warner’s entertainment and cable companies was sold to John Malone, another of the media business’ great lousy-deal makers. Then CNN was acquired (ruining that company). And along the way there were hundreds of other transactions, bigger and smaller. Then, on January 10, 2000, Time Warner announced it was merging with AOL. (Days before the announcement, I was flipping channels and paused for a moment on a CNN show that had on its panel Jerry Levin, Isaacson, media and culture commentator Kurt Andersen—also a former Timer—and the New Yorker’s mogul-fanzine writer Ken Auletta, talking about the future of the media. Suddenly, in the discussion, Levin, who probably knew he was soon to announce the largest merger in history, started to talk about governments‘ fading and some new sort of corporate city-states’ rising and how the world would be mediated in some vaguely sci-fi-ish New Agey Rollerball digital way.)

The Time Ivy Leaguers (grown weary and depressed through the nineties), the Warner Hollywood heavies (many of them alter cockers now), and the ever-more-furious Ted Turner were married to some suburban database hucksters from Dulles, Virginia.

There was certainly no sense in the auditorium that this was the last merger. That this deal might define a level of overreach and prompt a turnaround.

After all, deals had always gone wrong, and we all still had jobs.

But, in fact, no deal had ever gone wrong like the AOL—Time Warner deal was in short order going to go wrong. This would be the worst deal ever made, defining not just a level of bad deal making, or of inimical corporate cultures, but of the profound lack of science in any deal. Not just a tissue rejection, but a whole set of doctors who had no idea what they were doing. Forevermore, in every media deal, this would have to be an operative question: Do they know what they are doing? Do they know what they are talking about? What planet are they on? And what do they smoke there?

Nobody knew it yet, but we had commenced a new phase, a whole new era, of resistance and revision.

January 10, 2000, was the beginning of the end.

Book ONE

1
THE COMEDY

The media business is collapsing. The structure is caving in, like a monarchy, or colonial rule, or communism.

The handful of companies that control the consciousness of our time are trembling and heaving, about to fall victim to internal weakness and external obsolescence.

If by the spring of 2002, this seemed obvious to many logically minded people, what logic did not account for were the moves and countermoves, as well as the pure denial, that delayed the inevitable end. Logic was up against the kind of powerful men, progressive business theories, public relations resources, and mountains of financial analysis—not to mention lots of charm and brutishness—that make most reporters and columnists end up believing that the moguls and their henchmen who run these businesses really do know what they’re doing and that the next big deal is the big deal that will bring about a perfectly realized, synergistic business condition.

Now, it is not just spin and spreadsheets that obfuscate the real predicament of these colossuses, but the media culture itself. The media, like all social and political systems, works on its own behalf. The social reality—to be a player in the media is to be among the most powerful people of the age—belies a contrary business reality, that the business barely supports itself.

We are in a novel of manners—the pretense is the thing.

Therefore, to tell the story of the media, you have to tell the story of the rituals and conceits and behavioral norms and notions of propriety that hold it up.

Instead of a purposeful business story, it should be something more like a drawing room comedy—not a story about corporate success and failure as much as one about individual need and weakness and, of course, opportunism.

How to reduce such vast companies and so many divergent players to a small stage? How to bring such outsized men with their praetorian retinues into the same room?

The task was to find these people in their element, to move among them seamlessly. To be of them—but not employed by them (or, even worse, sucked up to by them—because their charm is not ordinary charm).

How to find the functional equivalent of a weekend at an English country house with a representative set of mogul kingpins as the guests?

Indeed, if business is the center of the modern world, which most certainly it is, then we have to find the dramatic context in which to reveal its true character.

Let us wait for such an opportunity.

2
MY TABLE

In the spring of 2002—in the year of the autumn in question—I received an official, even ceremonious, invitation to have lunch with two journalists I knew from the Internet years (already sounding like some druggy past, or a best-forgotten unpopular war). They had a proposal to discuss. We want to bounce something off of you, one of them said in an email.

And so we met at Michael’s. To have lunch at Michael’s seemed specifically part of their point here.

You step into the door on West 55th Street, in a building once owned by the Rockefellers, and get a greeting from Michael himself (when he’s in from the Coast—Michael’s has a sister restaurant in Santa Monica), in brilliantined hair (recently he’s been sporting a new floppy cut), or from one of the oddly nurturing (“You look great today”) front-desk people. Then, from the top of the few steps leading down to the spacious dining room with good art and many flowers, you see everybody else in the media business who wants to be seen.

I have a table. It’s table No. 5, which is a very good table very near the front of the room. Its sight lines go directly to the entryway, and its back is secured by the east wall (in view of table No. 1 in the bay with Caroline Kennedy playing with her hair or Mick Jagger drumming his fingers or Bill Clinton monologizing his luncheon companions). Among the things I have never expected or wanted to achieve is a table of my own (like Winchell at the Stork Club). Still, this takes nothing away from the satisfaction of having gained a contested piece of turf. (There is a menacing back room at Michael’s where faceless people are led every day, never to emerge.)

Before Michael’s was Michael’s, it was the Italian Pavilion, which in a former heyday of media life had a serious following among advertising and network types. My father was in the agency business and once took me to lunch here and pointed out Bill Paley, the chairman of CBS and the most powerful and elegant man then alive.

I think this is part of the Michael’s attraction: It recalls the other, more salubrious, three-martini era (occasionally, someone will even have a martini at Michael’s), when media was the easiest game in town, when the world was made up of a passive audience and eager advertisers, when the money flowed like gin—as opposed to now, with media being a tortured, hardscrabble affair. A bleak, unpromising, Darwinian struggle.

I sometimes think this is part of the running joke. When you’re making a lunch date and say to someone, “Michael’s?”—they’re in on it. The joke is that all these media bigs show up for lunch and pretend everything is just fine and still supporting these incredibly expensive meals, while waiting for the person at the next table to break down in tears (at any given moment, everyone knows who will likely be crying next).

In other establishments like this—the Four Seasons, for instance—there’s a certain sort of pretense. People in a gated community pretend that they live the lives of people outside the gated community, or pretend the gated area is normal life.

But Michael’s isn’t like that. Everybody is open about being on the inside. It’s like a prison yard.

We’ve crossed the existential Rubicon from social and economic anxiety to an oddly pleasurable self-loathing.

If there once was a media Eden, we are its wastrel and prodigal children with bad work ethics who messed it up and were cast out of the garden. In another sense, we are just unfortunate children, who, through no fault of our own, inherited overplanted fields and poisoned air and changing weather conditions. Whatever.

I have another metaphor, which is Vichy. This makes Michael’s a kind of Rick’s Café Americain.

Pushing this metaphor, the media business, through this last twenty years, has become occupied territory.

The media business used to be run by insiders. People who grew up in those businesses, and people, who by virtue of a certain New York-ism were of a family. But then outsiders, not-of-our-class outsiders, took over.

In a twenty-year period, virtually every media company and every sector of the media industry—book, newspapers, magazines, radio, television, movies, music—came to be controlled by people from outside the clan.

The mogul invasion began—not just your usual business types, but a whole new class of rougher, ruder, preternaturally cunning businesspeople.

A sense of insider resentment or snobbishness or rebelliousness would occasionally express itself. But the stronger sensation was clearly a desire to adapt. Resistance in this situation, where economic ownership passes from one regime to another, is, strangely, almost unknown. Ownership is granted a kind of moral standing. There is no model for saying we will not submit to capital. (When Rupert Murdoch bought New York magazine in 1977, the staff walked out—but that really may be the last time there was clear resistance, and, of course, it was pointless.) It isn’t like, for instance, France. Even though these are cultural industries, you can’t talk about cultural patrimony—or a cultural exception. Although there have been federal rules that regulate exactly this, that notion—that there is something here that transcends the marketplace—that this is a special and fragile area, seemed feeble and pantywaist. For a while book people said it, but then nobody said it anymore.

The world is as it is. The idea of having no place in it became the scariest thing. (We all knew people, too, who came to have no place in it—from people at the Village Voice, to correspondents in a network’s foreign bureaus, to old New Yorker writers—who fell outside a sense of economic with-it-ness. Indeed, there are long mastheads of the missing.)

Therefore, we became collaborators: the quisling media.

Collaboration is, of course, a complicated emotional predicament, in which you often come to root against yourself—root for our own ruin. That’s the Michael’s patois. Who is going down. Who is fucking up. Whose ridiculousness will finally be exposed.

It is this self-consciousness and self-loathing that forms not only the subtext of Michael’s conversation (this is a highly verbal and analytic bunch) but the subtext of the media’s view of the media itself.

We are all here every day working to chip away at whatever is left holding up this insupportable business.

Which is why lunch is so satisfying.

3
LUNCH

NOW, my lunch companions that spring afternoon were both accomplished men—ambitious, high-end achievers who had become significant figures of the great boom.

They had transformed themselves from striving hacks into men of wealth and affairs. They were not just journalists, but had become players in the media business, working the levers of association and finance and business theory.

So of course when they unexpectedly faltered in their transformation—when the reinvention seemed to be reduced to mere overreaching—a certain degree of pathos and Sammy Glicksterism quickly attached to them.

This was, I suspect, part of the reason I was on their lunch list. I, too, had overreached—my Internet business had risen and fallen—but had, surprising nobody more than me, come back from the edge.

The media business—at least if you knew how to work the media business—turned out to be regenerative. The notoriety that attached to you going down could become, with a little craft, the added notoriety that was needed to take you back up.

John Heilemann, a journeyman magazine writer who had gotten himself a million-dollar advance for his first book, and John Battelle, who a few years after graduating from journalism school had become the CEO of a multimillion-dollar publishing company, were now just two unemployed guys in the middle of a nagging recession in more or less urgent need of a paycheck.

At the same time, they were, I didn’t doubt, planning their rehabilitation and resurgence.

Lunch with me, I was not displeased to sense, was part of their plan.

Heilemann was the more forceful of the two, although, interestingly, the more dependent—he needed Battelle to be the business guy, the feet-on-the-floor guy. Heilemann was the showman.

He was major-sport-athlete size—although he obviously wasn’t an athlete—with a stud and two hoops in his left ear. He seemed like something of a sight gag: Too big to be smart, too big to need to be smart. Like a blond bombshell in kludgy glasses.

He’d already had, by the age of 30, an impressive journalism career, first at the Economist, then at the New Yorker, and then at Wired magazine, writing about media, politics, and technology—but all the time seeming way too large for those jobs. Those were for intelligent scriveners, whereas Heilemann was taking his measure not against other writers, but against the big men he was writing about.

In 1997, as the decibel level of the great boom had unmistakably begun to build, Heilemann wrote a profile of John Doerr, the greatest of the Silicon Valley venture capitalists, for the New Yorker. It was one of the first formal introductions of Doerr and of the Valley financial phenomenon (“the greatest legal creation of wealth in history,” in Doerr’s famous, and regrettable, phrase) to the East Coast audience. On the basis of the Doerr profile, Heilemann had gotten his million-dollar advance to write the story of Silicon Valley. Heilemann promptly moved to San Francisco and almost immediately became a prince of the Valley himself, a celebrity second only to the highest levels of Valley celebrities themselves—indeed, he courted and was in turn courted by those same celebrities, famously, ostentatiously, consorting with Doerr and cohorts up and down the Valley.

Once, during the boom, at a party in San Francisco—and during this time everything was a party in San Francisco—Heilemann was telling a small group of people, confidentially, that he had just met with Jim Clarke, the co-founder of Netscape, who had confided something startling to him. Should he take Clarke seriously? Heilemann was wondering aloud. I, who had already failed as an Internet entrepreneur, said obviously not. Heilemann, from his great height, said, with what I remember as quite impressive scorn, that he was certainly inclined to give a man who had founded two billion-dollar companies the benefit of the doubt.

I’d been reduced to a sour-grapes sort, and Heilemann elevated to part of the new, muscular, elite corps of technology intellects—and for several years we didn’t like each other very much.

But then the boom ended (without Heilemann having finished his book—indeed, Heilemann’s lack of writing had become legendary too) and since then there had been no reason for us not to get along. It was possible that some of the same kind of credit that Heilemann awarded Clarke for founding two billion-dollar companies now accrued to me for getting out (even if by failure) of the technology business before the bust.

If Heilemann was too large and imposing to be a mere journalist, his cohort Battelle—Heilemann and Battelle were often billed as a Stan and Ollie or Lewis and Martin combo in Silicon Valley—was too handsome. He was distracted, it sometimes seemed, in the particular way of a too-handsome person—concentrating on people looking at him, rather than concentrating on other people.

Partly because of his distraction, and his failure to ever make eye contact, I had no real insight into whether he was secretly thoughtful or genuinely obtuse. His pure momentum, the imperviousness of the way he moved ever forward, might mean there was another dimension here—or not.

If there was anyone who had been close to achieving a version of professional perfection, even in an era when so many people had been close to achieving that, it was Battelle.

He had lost his no-hitter on the last at-bat.

He’d come out of journalism school at Berkeley in the early nineties to become the number two on the launch of Wired magazine. After a period of wild success, when Wired was thought to be worth many hundreds of millions of dollars and Battelle himself worth various millions, he had then started the Industry Standard, a business magazine about the Internet, promoting himself from mere editorial type to CEO and publisher. I cannot recall anyone initially thinking the magazine had any promise. (I briefly wrote a column for the magazine, while at the same time thinking it had no promise—and figuring that, as soon as I could, I had better find something else.) But the Standard promptly became the most successful magazine of all time in the quickest amount of time, before it, too, crashed—with Battelle being arguably responsible for both its great success and inevitable failure.

Heilemann and Battelle were badly beaten up—but standing. Their wounds contributed to a certain dashingness (a lasting stiffness in the leg, and hint of a limp).

At any rate, here they were, both of them fully aware that everyone else was aware of their hubris and fall, formally calling on me, someone they had reason to believe might be taking some pleasure in their circumstances.

Heilemann began the specific business presentation.

Heilemann is an inarticulate monologist. He can’t stop talking, can’t find a clear way to an end point. He is always restating. There’s a constant quest for synonyms, for adjectives, for new ways to emphasize. It’s a form of buildup, of preface, of drumroll:

He and Battelle were going to hold a conference.

They had together staged some of the most grandiose gatherings of the technology boom, and now… drums… they were back, planning the biggest, the best, the mother of all media conferences. The greatest meeting of media moguls and bigshots ever!

It was nearly Barnum-esque in the telling.

Now, I have been to so many conferences—as many as twelve a year for as much as fifteen years—and there have been so many more that I have managed to avoid going to (while conferences were built on the idea of exclusivity, their sheer numbers made it really hard to make the exclusivity argument anymore—although, of course, conference organizers did), that I was not, at that moment with Heilemann and Battelle, thinking the conference, this conference, might be the perfect setting for my weekend of media moguls.

Instead, I was thinking, Not another fucking conference.

Of course, I knew what was in it for Battelle and Heilemann.

The money could be very good. In the boom years, you could do four or five or six hundred people at a conference like this, for three or four or five thousand dollars a head, with your talent, your presenters, your headliners even, getting nothing whatsoever—which was, I knew, the deal they were going to cut with me (the economic principle was that participants benefited from the same association that everyone else benefited from, that a good conference supplied new and valuable connections to everyone who went). Indeed, if you got a conference going, got on people’s schedules, a once-or-twice-a-year sort of thing, you had a sure multimillion-dollar annuity.

What’s more, there was an opening in the market niche. For twelve years, the TED conference (technology, entertainment, design), held in Monterey, California, had been a vital date on the media-technology-communications complex calendar. It was the big one, regularly attracting nearly a thousand people, at $4,000 a head, with sponsors covering many of the underlying costs—and a staff, functionally, of one. Richard Saul Wurman, a Sydney Green-street figure, ran the conference and every year collected the $4 million or so; the educated guess was that his profit margin might have been as high as 75 or 80 percent. But now he had sold the conference—and whether or not the new owners could do it as well was far from clear. If you could take that place, you could build yourself a powerful base of operations in the media world.

This is where Battelle stepped in. He explained the money part.

It occurred to me that that’s what Battelle did now. That this was perhaps all that interested him: the deal. He knew, better than most—as well as any banker, or mogul—that you lived and died on the basis of the deal. The deal was the force.

The deal was this: Quadrangle, a New York—based investment fund specializing in the media industry, was backing the conference, to be called Foursquare, which would be a partnership among Heilemann and Battelle and Quadrangle. And while, ideally, this was to be a moneymaking enterprise, Quadrangle would absorb any deficit. (Of course, I knew that if Quadrangle was accepting the losses, it was a far from equal partnership, if it was a partnership at all.) What’s more, Quadrangle was contributing its influence to attract the desirable level of speakers and participants.

This made sense. If no one at all paid to attend, if everyone became an invited guest, this was still an acceptable marketing cost for Quadrangle. Everyone they’d ever want to do business with would be a captive audience for three days. The Quadrangle guys would be able to strut their stuff.

But lest this appear to be just a marketing ploy, bankers sucking up to prospective clients, Battelle argued the opposite point:

“This isn’t just schmooze. There’ll be schmooze, but this is an editorially driven conference. We want to tell a story. What we want is for journalists to be interviewing and questioning the seniormost executives in the industry. So this isn’t just guys, like in most conferences, giving sales pitches and the usual patter, this is people with information being questioned by people who know how to get information.”

This is the pitch, I realized, they had sold the Quadrangle people. It was a serious affair—a serious affair with money.

“So what do you think,” Heilemann asked, “is going to happen? Go wide. What are the trends? What’s the—”

“I think everything is going to collapse.”

“Everything? Beyond AOL Time Warner?”

“Certainly Disney and Vivendi are totally fucked.”

“Messier,” said Battelle, naming the Vivendi chairman, “is on board to speak at the conference.”

“Really?” Messier was surely doomed, yet I was impressed that they had gotten him. I had been wanting to meet him. He was even more interesting, I thought, a greater “get” because he was out there in free fall.

“And Viacom is obviously an armed camp and can’t last after Sumner—” Sumner Redstone, Viacom’s 79-year-old chairman and controlling shareholder, was in a standoff with his handpicked successor, Mel Karmazin. “The same thing for News Corp.—it’s not a company that makes any sense whatsoever without Murdoch.”

This hypothesis—predicting the inevitable collapse of the five megamedia-opolises which dominated the industry—was as workable a theme as any.

It was 1914 in Europe.

“What about Bertelsmann?”

“Totally fucked.”

It was some measure of both the peculiar nature and commonplace self-loathing of the media business that you could hold an industry conference and be relatively nonchalant about proposing that the industry was going to implode. On the other hand, it was part of the conceit here that this was a kind of true congress, at which representatives would converge and we would discuss the future of media nations.

“Can we interest you? Who would you like to do? If you did a one-on-one, an interview on stage, who would you like to do?”

It was a time to grab a big enchilada. It was certainly no time to be modest. There weren’t that many enchiladas.

It was Diller or Murdoch.

Because more mystery attended them, more cult of personality, more secret of success, more mogul history, the interviews with Murdoch and Diller would be the big draws of the conference. What’s more, if you could do it right, cannily and subtly, and have them reveal themselves—that would be a score.

Their existence, it seemed to me, had never been adequately explained. Murdoch certainly had held more power longer than anyone else—from his arrival in the U.S. in 1976 to now, he had just kept growing, just kept becoming more and more significant. As for Diller, he may just have defied more conventions of power than anyone else. And it often struck me he was doing this with a certain humor or irony, which might be the ultimate defiance of the power convention.

“If I could face either Diller or Murdoch I would certainly be interested—definitely count me in.”

4
THE POWERS THAT BE

Possibly, I’ve thought, I’m something like an old-time Washington columnist—Drew Pearson, James Reston, even Walter Lippmann—in this new kind of ultimate power scene.

They dealt with matters of state and with the egos and idiosyncrasies of statesmen. I deal with the consolidation of the global media’s power and with the strange and compelling men who control much of the world’s information supply. Lippmann’s interest in Bernard Baruch might be, with a little critical interpretation, not all that different from my interest in Barry Diller.

After all, the media has replaced politics. The media is the root of consensus; it’s the organizational motor of society, now that media demographics define us; it’s the place you go if you have a cause, or a gripe, or desire for reform. It’s a great patronage machine too; loyalists and courtiers and suck-ups are rewarded with immensely valuable publicity. The media, surely, is a more influential force in our lives and in the world’s changing beliefs than politics or government ever was. Certainly, more people participate in the media than ever participated in democratic politics or government. Media is the currency of our time—the less access you have, the poorer and less successful you are. Likewise, the highest order of power and prestige is to be in the media yourself, or to control people’s access to it; people may say they hate the media, but just let their mothers see them on television. Hence, moguls became the political barons of the age. And we, the mogul underlings, became the officials and ward heelers and apparatchiks and bureaucrats of the new communications-technology complex that runs the nation.

Media has become not just the political system but the biggest industry too (a convergence which, like fascism before it, has been most comically demonstrated in Italy, where the head of state is also the head of the country’s media monopoly).

It is almost impossible to find a business that does not see itself as in some part a media business. In a transformation of vast and meretricious proportions, everybody plunged into the media game. Recognition, connection, meaning, transcendence, was something sought by even the dullest men.

Westinghouse became CBS; France’s biggest water company got reborn as a media megalopolis; GM enjoyed a period as the nation’s major television satellite company; Microsoft again and again lost billions trying to develop media savvy. And GE’s flagship business moved from lightbulbs to NBC.

You even had media companies creating other media companies to promote their core media company. The more media you owned, the more you could promote the media you owned. (Disastrously, Disney and Miramax created Talk magazine, for a time rationalizing their investment as a marketing instrument for the companies’ movies and executives.) Indeed, the modern notion of brand is really about access to media rather than the older notion of brand, which was about habit and dependability.

Every American knows the secret of success: more media. The more media, the more recognition, the more value, the more power, the more influence—the greater claim on, well, the media.

I don’t believe any greater power has ever existed.

So I began to think it could be for me just like it was for Lippmann in Washington during the thirties and forties, observing the transformation of the U.S. into the world’s great consolidated megapower.

Of course, I was no Lippmann. And I wasn’t the only one in the media business who had a clearly nagging sense of disappointment, of being less than the circumstances ought to have made us.

As big as the media got, as central as it had become to everyone’s dreams, almost nobody took it very seriously. In fact, the bigger it got, the less seriously it was taken—even though one of the reasons it got big was precisely so that it would be taken seriously.

Jerry Levin may have thought that the creation of the AOL Time Warner monolith would see him became a great man, a creator of worlds. But, as was apparent to all but the people closest to it, Time Inc., a company which used to be reasonably well thought of, became sillier and sillier as it grew larger and larger in its successive incarnations.

No matter how big media companies became, they just could not transform themselves into stately, or even manly, enterprises.

Politics and government, even though they are explicitly about power, have, or at least used to have, a carefully developed rationale for the need for power—they are, in a sense, about that rationale.

The media isn’t so remote—isn’t so Waspy. In the media business, everybody’s motivations are clear. Every aspect of the enterprise—from the back office side to the talent side to the news side—is about achieving notoriety. The media is, in fact, in the business of being noticed by the media.

The more insecure and narcissistic you are, the better equipped you are to rise in the hierarchy. And because there is no limit to insecurity and narcissism, the hierarchies are always being remade.

Let’s say it: The media business at its most exalted level attracts emotionally needy, attention-demanding, nerdy guys. And worse, unlike a former generation of media people, who reveled in their personal excesses, the present generation is uptight about its desperate desires.

But, in fact, they’re here because they’re dissatisfied with being just business guys. They aren’t, or don’t feel they are, temperamentally suited to just counting stuff. In fact, the media suits who are always derided as just being bean counters, don’t, in fact, count beans so well. They have quixotically higher ambitions for themselves.

But they’re not good-looking or funny enough or imaginative enough to be the talent either. They’re stuck in the middle ground: They’re not the talent, but they can’t stand to be so far from the talent that there is no chance for the spotlight to ever hit them.

So they puff up their businessman mission.

Media business talk is among the most serious business talk there is. It’s all about being a serious person—a visionary businessman.

No sane person (at least no sane person not on a mogul’s payroll) who has ever sat down with one or another of the halfwit overlords of the feudal media states and listened to the rationalizations for the twenty-year rise of the media cartel system has ever had any idea what these people are talking about. The patter—about content and distribution and scale and outlets and platforms—masks wild personal needs.

I can’t do justice to the true asynchronous pitch of halfwit-overlord talk. But I think I can say what they are actually trying to say—which, even if they could say it properly, would still be ridiculous. Also, I think I can analyze why they have so much trouble saying it clearly.

At the root of the blather are some basic case-study-type business principles. Great industries are built on the concept of commoditization. You take something expensive and by making lots of the same thing you make it cheaper, and, through a larger distribution system, you make it more widely available. Cars, for instance—like the Model T.

Now, part of the premise here is that the thing you’re selling, because of the more efficient standardized process you’re using to create it, becomes more and more like the thing everyone else is selling, a mass-produced, unspecialized product. And therefore, you as the business guy—the person who knows how to do things more efficiently than the next guy—become all the more valuable to the process.

The media, like all other advanced industries, was going to begin trafficking in commodities. Content was going to become commodified. Therefore, gaining the business advantage was going to be about how the organization could most efficiently create the product and bring it to market. It was going to be about management.

Plus, it was going to be about value. Or value added. When you commodify something you devalue it, but if you manage to convince people (using, of course, the media) that your cheap-shit commodity is the better cheap-shit commodity, then you’ve won their hearts and minds. In a world where everything is the same because everything has been commodified, the only way to distinguish what you sell from what everyone else sells is to create certain neural stimulators that make buyers think it’s different. This is called brand.

There’s a precious irony here. The value of the media used to be that it could create that illusion of difference, that value distinction, for a whole range of products—from soap to cars to nail polish. But now media people were saying, Why don’t we use the power of the media to create the illusion of difference for mass-produced media! Why should we give somebody else the advantage that we own? Damn! Accordingly, as the media commoditized and devalued itself, and then turned around and overhyped itself, this made it increasingly difficult to create illusion and distinction for the products and producers (the soap and cars and nail polish) that were paying the bills.

Naturally and logically, the consolidation that happened to all other great-industries-which-shaped-history would happen to media too. (Anybody who went to business school, or, for that matter, has ever read a business magazine, will tell you that there were once hundreds of automobile manufacturers, which became three.) Of course you would go from a large number of disorganized, independent, mom-and-pop media companies to a few professionally organized supercompanies. You would cons olidate. (This really is among the sexiest business words—it is, after all, in the process of consolidation, the making of deals and trading of assets and the cost of recombination, that the vast and immensely profitable financial services industry makes most of its money.) You would combine many businesses doing the same things inefficiently to realize one business doing the same thing efficiently, hence creating a more-widely-available-less-expensive product that would be adopted by billions of people everywhere, changing human behavior and the course of history!

Making you, the person who did the organizing, a historically significant person.

One obvious problem here, however, is that the media business is nothing like a business. No mutuality. No common function. No similar objectives.

It’s a made-up concept, media. In all the huffing and puffing about the media, we forgot that media doesn’t mean anything. The entire industry is a fluke of semiotics.

In the fifties or so, ad agencies gave media its first use as a singular construction. “What’s the media?” “What media are we using?” Meaning the literal paper or film or tape or billboard.

From there, it became a salesman’s word. I sell media.

My dad ran an ad agency during the fifties and sixties in Paterson, New Jersey. One of the guys who used to hang out there was a young radio salesman named Mel Karmazin, who, when he grew up, would buy radio companies, then television, and eventually joust for power at the Viacom cartel. At any rate, in those days, Mel, as a callow youth, was called a media sales guy. He was selling space, and the space was called media. Media was the thing that the advertisers bought. It was the space between what you listened to the radio to hear or turned on the television to see.

There was too, during this time, the growth of media as an arcane academic word. Media was about the abstract function of communication. Mass media. It was sociological. Large numbers of people were getting the same information in the same way—this must mean something; this must be having a societal effect. There was too this other element of academic self-consciousness, of the media being the mediated thing. This was McLuhan. The media was the go-between, the intermediary. This was, obviously, a point of philosophy rather than business. There was much talk about the media as a distortion field. There was real reality, and then media reality.

Then there was a thing called multimedia—a sixties thing related to drugs, mostly. The Joshua Light Show at the Fillmore East was multimedia. (In some sense, the concept of multimedia would have its finest expression as PowerPoint.)

And then, suddenly, emerging in the 1970s, you had something called media companies. This was just inflation. A useful bastardization of an already obtuse word. It was a Wall Street thing. We’re more important than we were yesterday because we’re no longer a broadcast (notice how old-fashioned that word sounds) company, we’re a fucking media company.

But at no point in the development of the word and of the concept of media was there an assumption that the television business and the magazine business and the radio business and the billboard business and the music business and the movie business were the same business—that they should be run by the same person, that they required the same talents, or would, even, logically have the same investors or the same stars or the same audience.

Indeed, for a while, there was even a kind of formal resistance to the word—and to the notion. One day, shortly after I went to work as a copyboy at the New York Times in the early seventies, a memo appeared on the copydesk bulletin board, advising reporters and editors that, in fact, there was no such thing as the media per se. There were newspapers and magazines and television and radio and movies, and to group them under one very vague umbrella was, at best, a lazy usage.

It’s as ridiculous as if someone had come along and invented the “transportation” business and, within the same company and under the same management, because they were all somehow related to the same word, put car companies and train companies and ship companies and airlines together.

You get the exact opposite impression of the media business from The Powers That Be, David Halberstam’s epic 1979 book about the media industry. Instead of assholes run amok, in Halberstam’s version the media is a rational, smart, competent, inspired enterprise: the pivotal force in the rise of the civil-rights movement, the opposition to the war in Vietnam, and the investigation of Watergate and the end of Richard Nixon.

Halberstam’s media people not only have vast social and political clout, but they have businesses that throw off great amounts of cash and which have increased in value as significantly as any businesses ever have.

It’s a golden age chronicle: The media from 1925 to the late seventies (just as Murdoch is coming to America).

For a few years our kids went to school together. Halberstam was a lugubrious presence at the school, trotted out for benefits and lectures.

On the one occasion we had lunch together, I found myself thinking of him as a missing link. He’s a certain, stuffed-shirt, media establishment type—which really doesn’t exist anymore, except in some kind of martyred form.

He believes in the worthiness and primacy of civic institutions—the nineties idea that politics may have been replaced by the market, and politicians by entrepreneurs, is sacrilegious for him. He believes in owners—proprietors—over managers and opportunistic entrepreneurs.

He believes in lots of prose (anathema in modern media) and discursiveness. He’s all long form—ceremonious even.

Pop culture dismays him. Celebrities don’t interest him.

He certainly does not accept the new financial-media-technology power structure—the American Establishment as it is, for instance, annually described by Vanity Fair. (“Do these people really influence society?” he asked, and answered, at lunch. “No, not at all. This is just a scorecard of who made the most money.”) He has a different idea of power, who should have it, how they should use it, and who might challenge them on its use. The quick and the glib are not at the center of his power grid.

At a dinner shortly after Barry Diller formed USA Networks (his disparate collage of television stations and cable channels) in 1998, Halberstam stood up and, in his deep voice—with such an undifferentiated bass range that it’s often hard to understand him—asked Diller what USA Networks planned to do in the area of public affairs.

That must have quieted the crowd: You can hear the rustle of embarrassment.

The creation of media power is, in Halberstam’s telling, the creation of civic power. The Paleys and Meyers and Luces aren’t press barons (marginal, corrupt, eccentric figures). These are true American enterprise figures, as large in his telling as the Rockefellers and Henry Ford and the Kennedys. (Indeed, the Kennedys would not have been the Kennedys without the aid of many of the people in Halberstam’s book.)

Before the advent of these people and their organizations, the media was vaudevillian. Here, midcentury, the media, with its ever-expanding reach, becomes both a vastly powerful voice and amazingly lucrative business.

This is, however, the news media.

There is no entertainment in Halberstam’s media view. Movies, rock and roll, prime-time, celebrities, as late as 1979, when Halberstam’s book is published, have no place in a serious discussion of the media landscape. Even Paley’s great sitcom-and-variety-show empire is overshadowed by the position and power he acquires through his news division. The focus in the book is the American commonweal, rather than the media commonweal, political culture rather than pop culture.

Serious men engaged in serious matters.

It would never have occurred to Halberstam or anyone else he profiles and mythologizes in his book that the media industry would, over the next generation, become the nation’s largest industry because, in part, it would provide escape from this boring civic world. (People magazine, launched in 1974 by Henry Luce’s company—after Luce died—and which becomes the most successful magazine of all time, surely helps invent the new, alternative, celebritified, noncivic power structure.)

And yet while Halberstam misses the soon to be inescapable and elemental point about the media business, he nails another fundamental point: The media has suddenly become a really great business. He gets the hunger for media. People are eating this stuff up. It’s totally hot.

You can’t read The Powers That Be and not start to think, That’s where it’s happening.

It’s like the West: free land.

The romance of Halberstam’s world is not only in its cleverness and toughness and even nobility, but also that it’s so easy. Anybody could do this. Anybody could be this kind of success.

It’s the first structural analysis—who knew this person and who knew that person and how the web of connections and being in the right place at the right time intersected with the nation’s changing education levels, its advancing aspirations and the laws of supply and demand—of a media career. And it’s the first time that the media business is considered as not just the story of newspapers or magazines or television, but in the aggregate, cross-platform sense which makes it all so much, well, bigger.

Everybody I know of a certain generation in the media business read The Powers That Be and took it ever so seriously. Many of us, I’ll wager, came into the media business, rather than, say, government or academia, because of The Powers That Be.

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