We in the journalism racket would like to welcome Colorado billionaire Philip Anschutz to our inner sanctum of power and influence. Anschutz, the primary owner of Qwest Communications who owns entertainment properties, real estate, and chunks of the Los Angeles Lakers and Los Angeles Kings, just paid $20 million for the company that owns the San Francisco Examiner. It sounds like a lot of money to pay for the doomed No. 2 paper in a market dominated by the San Francisco Chronicle, but it's a smaller percentage of Anschutz's net worth ($5.2 billion) than $119 was of my net worth ($4,100) when I invested that sum in a Smith Corona manual typewriter to gain entry to the same business 30 years ago. Welcome, Philip!
And a friendly howdy to Bruce Wasserstein, mergers and acquisitions wizard and head of Lazard, who needs no introduction. Wasserstein joined the journalism cult while in college, working on the Michigan Daily, and even slummed at Forbes one summer while pursuing his MBA and law degree at Harvard. Bruce returned to his first love in the late '90s after making Wall Street millions by purchasing the American Lawyer, other legal publications, and launching the M&A tip machine, The Deal. Wasserstein just won New York magazine at auction for $55 million, a magazine that made only $1 million last year on revenues of $43 million, beating old-school vanity press mogul Mortimer Zuckerman (real estate, U.S. News & World Report, the Daily News, and a couple of years ago the Atlantic Monthly). Even though Wasserstein has been a bit of a tightwad at the American Lawyer—compared to former owners—we priests at the temple of journalism give him our blessing: May all your deadlines be happy, Bruce!
Multimillionaire money managers Roger Hertog and Michael Steinhardt (Herthardt to you) bought their way into the New Republic in 2002 at the bottom of the market, partnering with vanity-mogul-by-way-of-his-wife's-inheritance Martin Peretz, who still holds an interest in the publication and the editor in chief title. Peretz, you may recall, flopped in his labors to mogul his way to media riches (Washington Weekly, the Electronic Newsstand, Journal of NIH Research, and TheStreet.com). Herthardt also owns a chunk of that vanity of vanity newspapers, the New York Sun, and Hertog serves as chairman emeritus of the Manhattan Institute, which publishes the wonk mag City Journal. "There's no fear they'll go broke doing this," Michael Tomasky wrote in 2002, in deliberate understatement. Long may Herthardt publish, or at least until a bigger spender comes along!
What's their Rosebud? What possesses such wealthy gentlemen as Anschutz, Wasserstein, Hertog, Steinhardt, and all the rest—David Bradley (National Journal, Atlantic Monthly), Bill Gates (Slate), convicted felon Rev. Sun Myung Moon (Washington Times, Insight, World & I, UPI), Richard Mellon Scaife (Pittsburgh Tribune-Review), Paul Newman (The Nation), Leonard Stern (former owner of the Village Voice chain of alt-weeklies), Harvey Weinstein (Talk), John Warnock (Salon), Arthur L. Carter (New York Observer, one-time owner of The Nation), Adam Hochschild (Mother Jones), John F. Kennedy Jr. (George)—who've made their money in bird seed, software, consulting, Hollywood, Wall Street, real estate, inheritance, banking, religion, and other enterprises to stray from their ultra-profitable fields into ours?
Don't get me wrong. We journalists celebrate whenever non-publishers move their money from the security of blue chip stocks into the volatile world of publishing. Without the vanity posse, scores of vital newspapers and magazines might fold tomorrow, reducing the size of the inner sanctum, which would be a very bad thing for us.
Typical vanity moguls are confident beasts but most wear their publications as emblems of their insecurities. They usually join the game because they're already bulging at the seams with profitable investments and are bored with their yachts, airplanes, mansions, sports franchises, race horses, and priceless works of art, and they view publications (correctly) as exciting diversions from their conventional holdings. Some vanity moguls buy into journalism for ideological reasons (Scaife, Hochschild, convicted felon Moon), hoping their investment will move the public debate in their direction. For others, the attraction is political: They're frustrated politicians who don't have the time, patience, talent, or résumé to sell themselves to voters (Hertog, Peretz, Zuckerman). Michael Bloomberg of Bloomberg News is the rare publisher, vanity or straight, who practices politics rather than preaches them.
Other vanity moguls are frustrated reporters who want in the game (Bradley, Wasserstein, Zuckerman again). Bradley and Wasserstein may fancy themselves journalists, but both accept that pounding words into a keyboard is a financial waste of their time. This maxim is lost on Mort Zuckerman, who skanks up both U.S. Newsand the Daily Newswith his pitiable column. (Note to Mort: Spend more time on your pieces—or at the very least hire a better ghost than Harry Evans. With a net worth of $1.3 billion, you can afford it.)
Never underestimate the intellectual currency one can extract from owning a piece of the right publication (Peretz, Herthardt, Bradley, Carter at The Nation). With the exception of Gates, every moneybags who invests in a publication becomes a more fascinating person overnight, acquiring cachet beyond their millions. Press moguls get talked about and written up in gossip columns. Civilians hang on their every utterance, politicians seek their counsel, and party-givers stroke them. For the very rich, buying a publication is the cheapest form of ego enhancement.
Every now and then, a vanity press mogul makes a go of his venture. We salute publishing heir Rea Hederman (New York Review of Books, Granta, a book division), who purchased and developed his properties with few grandiose notions about acquiring power and prestige. Genuine press moguls occasionally play vanity mogul—newspaper barons Rupert Murdoch (New York Post, Weekly Standard) and Conrad Black (Spectator, New York Sun) come to mind. But whenever they purchase or launch low- or no-profit vanity titles, they seem more accepting of the fact that the only income they'll earn from these publications will be psychic.
But in most cases, the vanity mogul's life cycle is every bit as predictable as that of a butterfly.
Stage 1: The tyro vanity mogul comes in with grand plans about restoring the publication to its former glory. He makes few noises about the immediate need to make money but hints that profits won't be hard to find because he brings the Midas touch to all of his investments. Quality, the mogul proclaims, will attract readers and advertisers.
Stage 2: He fires the editor and replaces him with a star (Michael Kelly, Shelby Coffey, Adam Moss), orders a redesign, and drops an expensive direct-mail package to recruit new subscribers. He expands the editorial and art budgets and moves the publication to better quarters, upgrades the paper stock, and thinks about building a publication empire, not just a stand-alone title.
Stage 3: Whoops! As fresh red ink flows, the mogul makes a few course adjustments, steering slightly away from quality to hire "names" who will write talked-about columns and during their TV appearances get the magazine's name chironed at the bottom of the screen.
Stage 4: Still losing money, the mogul reverts to his original economic instincts. "I know how to make money!" he mumbles. "I'm not running a charity here!" He cuts costs, eliminates employee perks, loses dead wood, cheapens the paper stock, increases the price of the product, reduces frequency of publication, and tightens everybody's shorts. David Bradley's Atlanticis sailing into such a space.
Stage 5: The mogul begins to doubt whether he can make money in publishing but realizes that the social standing that came with the magazine will evaporate if he cuts the budget too deeply or overmeddles in the editing. Some moguls, such as Mort Zuckerman, don't care if they become the laughingstock of the industry and proceed apace. Mort usually overcomes his depression at not making any money by firing his editor and hiring a new one and firing him, too. Already he feels better! Fire and hire again!
Stage 6: As the mogul cracks the cocoon, he must decide whether to fly or crawl or hold. Zuckerman usually crawls. At U.S. News he's cut medical benefits, closed the cafeteria, reduced the staff to bare bones, sacked the older (more expensive) employees, taken away the Christmas ham, and closed bureaus. "What Would a Slumlord Do?" guides Zuckerman. Recently, Zuckerman did what a slumlord would do, shopping for a new estate, New York, while neglecting his condemnable property, U.S. News.
Stage 7: Sometimes, just sometimes, good things happen to struggling moguls. Convicted felon Rev. Sun Myung Moon maintains a direct line to God through which he receives a steady stream of $100 bills that keep his Washington Times alive. Times officials confided in 1997 that the paper had lost $1 billion since its 1982 launch.
Stage 8: Before his losses reach the $1 billion mark, the average vanity mogul who has tired of his toy looks to unload his property on an entry-level mogul (Zuckerman to Bradley in the case of the Atlantic).
As the wheel of life turns, the cycle begins anew.
Editor/writer with ambitions to build publishing empire seeks vanity publisher with unlimited funds. Send proposals to firstname.lastname@example.org. (E-mail may be quoted by name unless the writer stipulates otherwise.)