With your purchase of Newsweek, you've now joined the ranks of the vanity mogul, that restless breed of fat cat who, upon consulting his net worth, decides that he'd like to burn tens of millions of it to join the mug's game that we call journalism.
So far, Mr. Harman, you're acting exactly like the vanity moguls—Arthur L. Carter, Richard Mellon Scaife, Mortimer Zuckerman, Harvey Weinstein, Philip Anschutz, Bill Gates, David Bradley, convicted felon Rev. Sun Myung Moon, et al.—who came before you. According to the New York Times, you picked up Newsweek for pennies but have assumed more than $50 million in liabilities. It lost almost $30 million last year and will likely lose that or more this year.
Even so, you're promising to keep the majority of the staff—the staff that may be wonderful but has failed the market test. You're mouthing platitudes about preserving the magazine's "legacy" and declared it a "national treasure."
Worst of all, you've announced, "I'm not here to make money, I'm here to make joy."
Oh, the joy you'll have until it all comes crashing down on your head.
When last I visited the subject of the vanity mogul in 2004, I charted the life cycle of the vanity mogul as a warning to Philip Anschutz, who had just purchased the ruins of the San Francisco Examiner for $20 million. Assuming you didn't read that piece, I offer here a summary of the vanity-mogul life cycle:
Stage 1: The vanity mogul announces that he'll return the publication to its former glory but says he doesn't need to make money right away. Quality, he says, will attract readers. (That's you, today.)
Stage 2: He replaces the editor with a journalistic star, redesigns the publication, expands editorial and art budgets, moves it to better quarters, and muses about parlaying his single title into a publication empire. (You're writing that memo now.)
Stage 3: As fresh red ink flows, the mogul hires "name" writers to compose columns that will be talked-about and to get invited onto television to build buzz. (I see it in my crystal ball.)
Stage 4: Still losing money, the mogul grumbles, "I'm not running a charity here!" He eliminates employee perks, increases the price of the product, and reduces frequency of publication.
Stage 5: The losses make the mogul want to bail, but can he abandon the rise in social standing that the publication has given him? He wonders how much budget cutting he can do without being compared to Mort Zuckerman, who has amputated and bled U.S. News & World Report to the point of homicide. He sacks the troublesome "star" editor and hires a pushover.
Stage 6: Panic. The mogul does everything that Zuckerman did to U.S. News. Cuts medical benefits. Skips issues during the summer and the holidays. Closes the cafeteria. Reduces the staff to bare bones. Shutters the bureaus. Makes staffers give plasma and confiscates the proceeds. Fires the pushover editor for a paper shuffler.
Stage 7: He finds a new sucker to buy the publication. And we return to Stage 1.
It's not my role to tell you how to flush your millions, but if you're going to waste them on journalism, a world of headaches and annoyances, let me be your guide.
Avoid thinking that you're a journalist. Almost every vanity mogul makes this mistake. Things that important people tell you at cocktail parties are not news, so don't bother your editor with these tidbits. The ideas you come up with while reading Paul Krugman columns are not news, so keep those to yourself, too. Your business colleagues at Harman International aren't journalists, either, nor are your friends, so don't let them write for the magazine. If you want to be a journalist, put your clips together and call me. I'll get you an internship and some freelance assignments.
Allow Newsweek to savage your herd of sacred cows. Nobody who reads your magazine will respect it unless you do. You're a philanthropist who has dumped millions into the arts—the Shakespeare Theatre Co.'s main stage is named after you. During the Carter administration, you served as deputy secretary of commerce. You're a member of the Council on Foreign Relations, a fellow at the American Academy of Arts and Sciences, and a trustee at the Aspen Institute. If you were any more dialed into the establishment, you'd be a rotary phone. Newsweek journalists must scrutinize—and savage where necessary—your business partners, your philanthropies, and your foundation/think-tank/color-guard buddies, or you'll be the most laughable mogul since Sun Myung Moon.
You're not getting any younger. Yesterday was your 92nd birthday. According to this Social Security actuarial table, you have about 3.3 years to live. Not to be morbid about it, but you probably won't live to see your magazine thrive. This puts you in a bind when it comes to hiring. Unless your heirs are as committed to Newsweek as you are, nobody is going to want to sign on for the long haul as an employee. You need to establish a plan for Newsweek that can be activated once the big magazine vendor in the sky cancels your subscription on earth.
There must be more money. Rick Edmonds of the Poynter Institute explores the notion of setting Newsweek up as a wing of a nonprofit educational foundation. To do so would be to announce that you're giving up. Now, I'm all for nonprofits like Mother Jones and Reason, but they serve important niches. It makes no journalistic sense to set up a philanthropic organization to compete with profit-making mags like Time, the Economist, andthe Week. A Newsweek trust or an endowment would signal your support from the grave, but trusts get broken and sometimes go broke. If you're in this, Sidney, you should be in this to win. Spend like crazy, as if you're going to make money off of Newsweek. You can't take it with you.
Your wife problem. Your beloved, Jane Harman, a Democrat, is a permanent member of the U.S. House of Representatives. She's also 65 years old. As your primary heir, is she the one we should be talking to about Newsweek's future, not you? Additionally, if you can't see the problem of your spouse making policy while you make a magazine, I can't explain it to you, other than to say you don't want Jane to be to you what Rep. Clare Boothe Luce, R-Conn., was to Henry R. Luce.
Although Jane Harman was accomplished before she married you in 1980, her political career is partly of your making. According to the New York Times, much of the $16 million she spent in her disastrous 1998 campaign for the Democratic nomination for governor in California was "family money." So it's not enough for you to have said of Jane, "I've never told her how to run the government and she's never told me how to run the business." Nobody but a moron believes that the king doesn't listen to the queen. As a Shakespeare buff, you've obviously seen Macbeth. Can you avoid making her a sacred cow? (See above.) If only you could put her in a blind editorial trust. As the elephant in the room, she must be quarantined or persuaded to resign from Congress or divorced. Deal with her.
What is Newsweek? For as long as I've been alive, Newsweek has defined itself in terms of its rival Time. While that might have made sense long ago, for better than a decade the Time-Newsweek axis has been under assault bythe Week (a quick digest of the news), the Economist (a pompous British take on the world), People, the Web, cable news, and even TheNew Yorker and New York magazine. Under Editor Jon Meacham, Newsweek imagined itself the Economist, which it wasn't, and following Meacham's love of history it ran covers featuring Lincoln, Churchill, and Lincoln. In its current incarnation, Newsweek has abandoned news for an essayistic treatment of current events. The sooner your new editor answers the question of what Newsweek is, the sooner you can feel good about losing your money on it. If only New York's Adam Moss were available, you'd have a fighting chance.
Do you have enough money to own Newsweek? According to congressional financial disclosure records filed by your wife for 2008, your combined worth was between $112 million and $377 million. If Newsweek continues to lose $30 million a year, you'll be wiped out in four to 12 years. Too bad you're not a billionaire, because chump change like yours won't keep Newsweek publishing in the style to which it's become accustomed. For that reason, you must recant the promises you've made about retaining up to 270 of the 350 or so employees you're inheriting and take back your assertion that you're not in it to make money. The point of your purchase of Newsweek isn't to save jobs; it's to save a magazine. If that's your goal and you don't have the funds to accomplish it, do the right thing. Sell it to the next vanity mogul.
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