As the New York Times' David Carr noted last Sunday, the recession has taken its toll even on the once bottomless pockets of the Condé Nast empire. Its business model, based on spending money to bring in money, is taking a hit as the media conglomerate struggles to bring in luxury-product advertisements. In 1997, Slate's David Plotz's chronicled the gratuitous profligacy of those with Condé Nast expense accounts—an era that could soon be history. The article is reprinted below.
During a typical lunchtime at the Royalton Hotel restaurant in midtown Manhattan, TheNew Yorker's Tina Brown might be installed at her usual table, and Vogue's Anna Wintour might be at her usual table (chewing on her usual meal—a $25 hamburger). Vanity Fair's Graydon Carter might be there, too, although he has transferred his main allegiance to a place called Patroon. Filling out the room are other editors, publicists, and writers from these magazines and GQ and House & Garden and so on. And one man, who probably isn't there himself, picks up every tab. Some of the lesser fry may even utter the Condé Nast mantra—though it is hardly necessary at the Royalton—as they grab for the check: "Let Si get this."
S.I. "Si" Newhouse Jr. and his younger brother, Donald, control Advance Publications, one of America's largest privately held companies. (Estimate of their combined wealth: $13 billion.) Donald tends to Advance's hugely profitable newspaper, radio, and TV holdings. Si runs the less profitable but more glamorous properties. These are the 15 Condé Nast magazines, including (in descending order of fabulousness) Vogue, Vanity Fair, GQ, Condé Nast Traveler, House & Garden, Allure, Details, Self, Mademoiselle, and Glamour; The New Yorker; and Random House.
The expense-account lunch is a hallowed journalistic tradition. But consider a day in the life of an editor working for Si Newhouse. (Donald's editors are a different story, as they will be happy to tell you.) It's a closed economy where almost all human needs and desires can be gratified with a miraculous, unlimited currency called the Si.
A Lincoln Town Car is waiting outside your door in the morning to take you to work. The car, which costs $50 an hour, is written into your contract. First stop, breakfast with a writer at the Four Seasons. The check may be as little as $40. When you reach the office, you realize you're out of cigarettes. No problem—you send your assistant to buy a pack for you. She gets reimbursed from petty cash ($3). (Could be worse for the assistant: She could be forced to pick up her boss's birth-control pills, or her boss's pet from the vet, or presents for her boss's children—regular duties for Condé Nast underlings.)
You've forgotten to return the video your kids watched yesterday, so you have a messenger take it back to Blockbuster. Si spends $20; you save a $1.50 late fee.
Then there's lunch. The magazines account for more than a quarter of daytime revenues at the Four Seasons and the Royalton. A modest lunch for two at the Royalton (no fancy wine or anything) might cost $80. But Si's generosity extends to even assistants and sub-sub-editors, dining on sushi at their desks. If you spend $10 or less on lunch, and claim you were working, Si pays. At Vogue and Vanity Fair, almost everyone has a "working lunch" every day. An editor at Allure says that "working lunches" there are limited to 10 a month.
Back at the office, you hear that a friend at another Newhouse magazine has been promoted, so you send flowers. The tab: $100. Si pays. (One of my favorite Condé Nast stories is of an editor who had just been promoted to an extremely senior job. His office was jammed with congratulatory flowers and cards. All had been sent by fellow Condé Nast staffers. All had been billed to the company.) Four o'clock, and it's snack time. Your assistant joins the mob in the lobby newsstand. She bills your candy bar, juice, and cigarettes (as well as her own candy bar, juice, and cigarettes) to the magazine ($15). After all, it's a "working snack." Later, there's a birthday party for your assistant. You order champagne and a cake—on the company, of course, and present her with your gift—a Prada wallet ($200). Later, she submits the expense sheet for it. Finally, after a Random House book party at Le Cirque 2000 (estimated cost to Si: $35,000), your car ferries you home.
Newhouse expense stories are a staple of New York literary-journalistic conversation. Stories about the $10,000 in expenses that a New Yorker editor billed for a single month. About the interior-decorating costs for the fashion-magazine editor who likes to have her office photographs rearranged every few months. About the hotel tab for the big-name New York writer who spent three weeks in Washington's Hay-Adams (basic room: $285 a night) researching a Vanity Fair story that will never run. About the Vogue editor who has furnished her summer house from items purchased for fashion shoots—beautiful furniture, designer pillows, coffee-table books. Vogue assistants have nicknamed the house "Petty Cash Junction."
None of the 39 past and present Newhouse employees I spoke to for this story would talk on the record, for obvious reasons. And the nature of the subject makes it hard to separate apocrypha from the truth. Did Condé Nast pay, as sources insist it did, hundreds of thousands of dollars in back taxes on behalf of an editor who didn't bother to file tax forms? Did an editor really expense $20,000 in a weeklong trip to Paris? The people who pay the bills are not talking. But every example of excess cited here was told to me by at least one source (and usually more than one) in a position to know.
Need a facial? Treat yourself and bill it to Si. This is what is called "scouting." It is also a great way to get free haircuts. To be fair, Si doesn't pay for all such treats. There is also a much-honored tradition of accepting tribute from companies that Condé Nast magazines cover. One magazine exec reportedly got so much loot last Christmas—Cuban cigars, "crates of wine," designer suits ("It was like a Spanish galleon")—that he needed three cars to cart it home. At yuletide, even midlevel fashion-mag writers and editors are inundated with "cashmere sweaters, Versace pillows, coats ...," recalls one ex-Vogue staffer wistfully.
At the top of the masthead, the perks are perkier. His Si-ness (their joke, not mine) does not expect his editors in chief to actually live on their seven-figure salaries. He also gives them clothing allowances (up to $50,000 a year). He buys them cars of their choice and hires chauffeurs to drive them. He offers them low- or no-interest home loans. GQ editor Art Cooper reportedly received two $1-million loans, one for a Manhattan apartment, the other for a Connecticut farm. Tina Brown and her husband, Harold Evans, former president of Random House, reportedly just took a $2 million boost to buy a $3.7 million Manhattan house.
Si's favorite courtiers lead lives of jaw-dropping privilege. When she was editor of British Vogue, Wintour commuted between London and New York—on the Concorde. Another Si confidant decided his office didn't feel right, so he hired one of the grandmasters of feng shui to rearrange it. Some editors prepare for trips by Federal Expressing their luggage to their destination. Why? "So you don't have to carry your bags. No one would be caught dead carrying a bag."
Condé Nast has also created a class of mandarin journalists, writers who live much better than they ever could if they wrote only for normal magazines. One freelancer tells of building much of a summer traveling with her husband in the West and Europe around a couple of Condé Nast assignments. Last summer, TheNew Yorker sent a staffer to Venice to cover the Venice Film Festival. The weeklong trip, which must have cost thousands, resulted in a short piece.
Writers, of course, are nowhere near as profligate as photographers. Stories of wasteful shoots abound: the matching seaweed that had to be flown from California to the Caribbean for a fashion photo; the Annie Liebovitz Vanity Fair cover shot of Arnold Schwarzenegger that reportedly cost $100,000; the Vogue shoot in Africa in which, an ex-Vogue editor claims, the photographer and his huge entourage wined and dined to the tune of "hundreds of thousands of dollars."
And then there are the parties. Last month TheNew Yorker spent—and this is not a joke—$500,000 on a two-day "Next Conference" at the Disney Institute in Florida, in connection with a special issue on the same theme. In order to get Vice President Gore, who was traveling in California at the time, TheNew Yorker paid for him and his entourage to fly Air Force Two from California to Florida and back. And vice presidents are not the only things that Condé Nast flies in for parties. TheNew Yorker once shipped silverware from New York to Chicago for a dinner. ("What, they don't have silverware in Chicago?" asks a New Yorker staffer.) Vanity Fair toted food from New York to Washington for this year's party on the night of the White House Correspondents Dinner. (What, they don't have food in Washington?)
That annual Washington do has grown from an after-dinner gathering for drinks at a contributor's apartment to two huge blasts—before and after the dinner itself—at a rented embassy. VF's annual Oscar-night party has become a similar institution in Hollywood. In addition to the parties themselves, Si also naturally pays to fly in VF staffers and to put them up at top hotels. (What, they don't have editors in Washington or L.A.?)
Some Condé Nast parties are so ridiculous that even other Condé Nasties make fun of them. This week's New Yorker, for example, mocks a recent Vogue party in honor of food writer Jeffrey Steingarten. According to TheNew Yorker, Wintour so detested the carpet at Le Cirque 2000 that she ordered the florist to cover it with autumn leaves (handpicked, of course).
The apogee of party absurdity is Vanity Fair's sponsorship of an annual London dinner for the Serpentine Gallery in Hyde Park. As one observer puts it, "Vanity Fair, an American magazine, pays more than $100,000 to a British art museum solely so that it can sponsor a dinner where Graydon Carter gets to sit next to Princess Diana." The princess was the museum's patron.
Actually, paying $100,000 for face time with Princess Di may not have been a foolish investment for a magazine so dependent on peddling her image. And Condé Nast's excess has other plausible justifications as well.
Some top editors may earn their perks. Vogue and GQ make millions, according to industry analysts. Vanity Fair is enjoying banner years, and while it probably hasn't made back the millions Newhouse lost in starting it up, it is certainly in the black. TheNew Yorker loses money—how much may even surpass perks as a topic of Newhouse gossip and speculation. On the other hand, TheNew Yorker is the most talked-about magazine in America, and Tina Brown is the most talked-about editor. That is worth something.
Public media companies such as Time Warner (or, for that matter, Microsoft) can entice and hold journalists with stock options. Advance is private, so Newhouse uses other golden handcuffs. He runs a lifestyle prison. Top editors stay because they could never afford to live in a house as nice as the one Si's interest-free loan bought them or to host parties as nice as the ones Si's party planners throw for them.
Condé Nast's magazines are all about glamour, wealth, prestige. To uphold that image, magazine editors need to circulate at the top of New York society. But the top of New York society consists of people who make far more money than magazine editors do—investment bankers, corporate chieftains, and fashion designers. Million-dollar salaries aren't enough to mix as equals with the Trumps and Karans. Si's perks are equalizers.
And they say it's not as good as it used to be. In 1992, according to Thomas Maier's biography of Newhouse, the editor of Self held a birthday party for Si Newhouse's dog. (Owners ate caviar; dogs drank Evian.) The lowliest assistants used to take car services home. But new Condé Nast CEO Steve Florio has restricted cars and catering. Editors who used to fly the Concorde now fly first-class; those who used to fly first-class now fly business. Expense accounts are scrutinized. Even so, today's Condé Nast is economical only by Condé Nast standards. The belt is tighter, but it's still hand-tooled, hand-tanned, and fashioned from the finest Italian leather.