Autumn of the Moguls

by Michael Wolff

  Now Messier became not an exception, but a kind of example of the inexorable forces that work on all moguls—the need to be bigger and bigger, to grow beyond proportion, to be transformed.

  I live On the Upper East Side of Manhattan, on the margins of the neighborhood where the great moguls live. You’ve got Barry Diller and the former Mrs. Sumner Redstone (Mrs. Redstone threw out Mr. Redstone) at the Carlyle Hotel (and Mr. Redstone nearby). You’ve got Mort Zuckerman on Fifth Avenue. You’ve got Michael Bloomberg on East 79th Street. You’ve got Sean “P. Diddy” Combs on Park and 75th Street. You’ve had Edgar Bronfman Jr. in the East Sixties (he recently sold this home). Michael Eisner grew up just a few blocks away. And Rupert Murdoch always kept a place here before moving to a younger neighborhood with his newer and younger wife (I used to see Murdoch jogging around the reservoir in Central Park; I’d follow steps behind him—a small man in a too-dapper running suit—thinking how fragile he looked and how powerful he was and how easy it would be to snatch him away). And, of course, all around the East Side you’ve got the bankers and lawyers who do the media deals.

  Then—and you know how the realtor must have sold him the property, telling him all about Barry and Sumner and Edgar and P. Diddy—we got Jean-Marie Messier, who moved into a $17.5 million Park Avenue apartment that the company paid for (even on Park Avenue, $17.5 million is a lot of dough for an apartment).

  At the height of Messier’s reign, I was walking on Madison Avenue in my mogul neighborhood with my son Steven, who was shopping for an ice-cream cone, when we saw a figure who prompted Steven to exclaim, “Look at that guy!”

  There was, languorously moving up Madison Avenue, a small man, with a coat cast capelike over his shoulders and the most pleased-with-himself expression I have ever seen on an adult, whom I recognized, after the slightest moment of surprise, to be Jean-Marie himself (I quite doubt anyone else recognized him). He occupied a wide swath of the sidewalk, with a strut to the left and then a strut to the right, nodding and smiling, or rather bestowing blessings, on passersby, who gave him wide and incredulous berth. He seemed to see himself as some combination of Pope and maestro—his idea, I suppose, of an American mogul. (Not something, of course, you could see yourself as, if what you are is a CEO of a water and sewer company.) I do not think he would have considered spontaneous applause to be out of order.

  I would have thought that this was it. I could even make the argument that Messier is the final flowering of the mogul. That, with the arrival of Messier and Vivendi—the overnight international media conglomerate—it suddenly became clear to everyone that the jig was up. That the long joke had reached its anticlimactic punch line.

  But if the media puts a vast premium on association, it also has a special talent, and keen appreciation, for disassociation.

  He is not one of us. That was only his delusion—his overreach.

  What’s more, one mogul’s failure is another’s success.

  The market is speaking.

  And then, in a complex social realm—Edith Wharton’s New York updated—there have to be morality plays. You cannot have an inner circle of the influential and powerful if people are not regularly, and dramatically, expelled from it.

  8

  IN THE

  SAME BOAT

  After Messier Was fired, Thomas Middelhoff, the über manager’s manager at Bertelsmann, bought the farm; then Bob Pittman, the COO at AOL Time Warner, got the shiv only months after AOL Time Warner CEO Jerry Levin’s sacking. In the summer of 2002, three of the six largest media companies, almost in tandem, dismissed their CEOs and top managers. When any big company throws out its management, you know something pretty extreme is going on—it’s akin to a coup in a mostly stable nation. But when half (to date) of the leading companies of one of the nation’s leading industries all at once begin firing their leaders, it’s destabilization on a continental scale.

  And too, in the summer of 2002, it seemed increasingly possible that Martha Stewart, that symbol of media wholesomeness and ubiquity, was going to go to jail.

  This was all, of course, against the background of Enron and WorldCom.

  It seemed highly problematic for Heilemann, Battelle, and Rattner—they were going to celebrate the media business just when there wasn’t one. They had called a meeting of the crown heads of Europe in 1915.

  We appeared to have gotten to one of those historically precarious moments when any catastrophe that you predicted was sure to come true. Anyone could go for it: What’s your most satisfying darkness-at-noon vision? Who do you want fired and humiliated? Who do you want convicted?

  Indeed, what if, after thriving for twenty years, the business culture itself—the broad social power of private enterprise, the no-guilt thrill of making vast amounts of money, the inevitability of an ever-increasing net worth, the great art of the transaction—was finally over? Kaput?

  Thinking just this, on a fine Manhattan summer evening, as WorldCom was collapsing and Messier was getting the boot, I found myself on the Forbes family yacht—once a very potent symbol of upper-class American capitalism, before capitalism got hijacked by the arrivistes and entrepreneurs and spreadsheet accountants.

  It was one of those meet-and-greet affairs that magazines are always hosting for advertisers and other media people. Forbes, the capitalist tool, had once had an advantage in this kind of promotional thing because of the yacht, the Highlander. But in the age of G4s or even larger personal jet transport, the boat seemed quaint.

  Still, if the business culture really was kaput, I was thinking, we could well go into a new era, or back into an old era, in which one could not be self-respecting (that is, a self-respecting liberal-type person) and be on the Forbes yacht. The Forbes yacht might again stand for something other than what it stood for now, which was just a promotional thing; it could, possibly, go back to being a resented symbol of wealth, class, and exclusivity.

  Now, I like Tim Forbes—son of Malcolm, the over-the-top father and protomogul, and brother of Steve, who keeps running for president—who is a kind of counter media mogul. He’s a self-effacing, none-too-hip, always somewhat-pained-looking anomaly of a modern media executive. Tim might be, you suspect, a lot happier having inherited a more anonymous sort of business—for instance, a water utility—but he seems dutifully to make the best of his fate. In fact, this aura of dutifulness, rather than ego gratification, may be one of the reasons that he seems popular among his staff—something unusual for most ego-charged media executives.

  We sat together at one of the little tables on the yacht, eating the catered dinner and marveling at this whole breathtaking moment of corporate humiliation.

  Now, we were both old and jaded enough to appreciate that in all likelihood this was just a periodic blip. Various deserving people would be pilloried and hung out to dry, and there would be a requisite shocked, shocked, moment of sanctimony and contrition, and then the markets would get going again. This made sense.

  “It’s very hard to imagine the end of this,” said Tim.

  The business culture was just way too ingrained in careers and aspirations and relationships to be undone by what was, relative to the vastness of the American economy, just rounding-error-level corruption. We shared a moment’s amusement about the recent Wall Street Journal story naming this business era as the most corrupt since just before the Great Depression.

  And yet that the Journal, of all places, could so easily be caught up in the antibusiness fever—partly, of course, trying to distance itself from the current mess—was precisely the point. It really could happen. It really could come apart. And not just the economy, but the central organizing faith of our time: that personal ambition, relentless salesmanship, financial savvy, and, well, greed were the most efficient and even liberal agents of societal advancement and harmony. All of that, almost in the blink of an eye, could go back to being not just uncool but really nasty stuff. Quite possibly, business would return to being the province of only bores and bad guys.
Certainly, people everywhere were rushing for the doors (our M.B.A. president himself has seemed to be frantically searching for an exit from any identification with the business culture).

  But Tim Forbes seemed much more awestruck than depressed by this possibility.

  While such a turn of events, an epochal rejection of the business culture, might be a deeply dispiriting notion for his colleagues at Fortune and BusinessWeek and the Journal (not least because many of these people would want to participate in the repudiation), for Tim Forbes there was the possibility that this might be very good news.

  “You know, we have always been,” Tim said, with a certain twinkle, “the magazine for true believers.”

  If you go back twenty years, it would not at all be a prosaic thing to say I am a capitalist or I believe in unfettered markets or Government is too big. Rather, saying something like this would have defined you as a contrarian or country club member and, quite likely, a Forbes reader. I remember my own grim fascination with the Forbes motto, “Capitalist Tool”—it seemed so brazen and taunting.

  To be a Forbes reader was not to have any sort of liberal or youthful or ambivalent impulses whatsoever. Dick Cheney surely read Forbes. Certainly, there wasn’t any greater cheerleader for the Reagan revolution than Forbes. Deregulation, laissez-faire capitalism, hands-off government, pro forma anticommunism, was Forbes stuff. Caspar Weinberger, Reagan’s secretary of defense, even became—and in some preserved-in-amber state remains—the ceremonial chairman of the company.

  Nor was there any greater voice in the eighties for the sheer joie de vivre of wealth. Forbes’s “400 Richest Americans” issue, which debuted in the early Reagan years, may rank as a seminal work of the business culture. For one thing, it vividly established a new benchmark of riches—there were really, it turned out, a whole lot of people who had achieved mythic levels of dough. Absolute-freedom money. Start-your-own-nation stuff. For another, it was a folksy instruction manual. Anybody, apparently, with a head for business and a modicum of audacity could make a few hundred million bucks.

  And then there was Malcolm himself. He was a Reagan complement. While each man represented stiff and conservative and un-emoting constituencies, they were both showmen. Hollywood was, ultimately, the point (Malcolm Forbes’s 70th-birthday party in Morocco, with Elizabeth Taylor on his arm, was a pivotal Hollywood-business-culture moment). Both men helped foster the most profound transition of our time: making business sexy, expansive, embracing, even polymorphous.

  But this left Forbes, especially after polymorphous Malcolm died, as an awkward cultural fit. That it neither acquired nor was acquired; that it remained in private hands; that the company was known for a yacht instead of a G4—all of this suddenly made it seem quaint and fragile. The fact that Forbes remained an independent company was not so much an accomplishment as an eccentricity—and probably a costly one. (If the business magazine Fast Company, an unproven title with limited revenues, sold for nearly $400 million, how much would that have made Forbes worth—$2 billion or $3 billion? How could the Forbes family, if they had any head for business at all, not have taken the money and run?)

  So much about the magazine seemed out of sync. The brothers, with their odd primogeniture plan (Steve, by dint of first birth, got the top title and biggest share of the business). The crotchety old editor, James W. Michaels, on the job for decades, only to finally retire and be replaced by another lifelong veteran of the magazine, William Baldwin (just a somewhat younger icon of crotchetiness). And then you had the magazine’s uplifting quotations and mini-sermons and ritualistic pomposity. And, of course, there was Steve Forbes’s loopy quest for the presidency and efforts to restore the Republican Party to its place as the party of the pants-pulled-up-too-high set.

  Like all business magazines in the nineties, Forbes raked it in. But as business became the big media subject, and one of the great media revenue generators, Forbes also got roughed up by the competition.

  Forbes may have remained the magazine of true believers, but Fortune and BusinessWeek (and so many other New Economy comets) became the must-reads of the yuppies and entrepreneurs and opportunists and faddists and marketers and digital schemers and reconstructed radlibs. These magazines were not fundamentally about business but about celebrity, heat, fashion. They were the new business culture. Forbes was the old.

  But both old and new in the summer of 2002 were in bad shape. Fortune and BusinessWeek were certainly no fun anymore. And at Forbes, for the first time, they’d had to lay off staff, sell from the collections (those preposterous Fabergé eggs!), even ask senior execs to take pay cuts.

  So, what if? What if the market didn’t soon recover? I couldn’t help wondering—my anticipation was growing. What if we continue to see corruption behind every boardroom door? What if I and other chattering sorts get to be socialists again? What if the pendulum has really swung as dramatically as that?

  This was exciting: the collapse of monoliths, the end of business talk, a return to a cottage media industry (oddly, not unlike the Forbes company itself), the rise of new (old) values to complement a falling GDP (this really will be weird), and a new, widely shared antipathy for CEOs and fat cats everywhere (Cheney and Halliburton—ha!).

  And it might well be, I thought, an exciting possibility for Tim Forbes (and for Steve and their brothers, Bob and Kip).

  “If the world becomes more hostile to business, it just makes our job easier,” Tim said, with something like irony.

  I would not say that there was, on the Forbes boat, exactly a mood of giddiness (or that the Forbeses have ever been giddy). But, possibly, something was in the air: a sense of renewed mission. Dennis Kneale, the Young Turk (at 44) who was brought in from the Wall Street Journal a few years ago as managing editor to liven things up, was energetically announcing a “Free Martha” campaign. There was a not unhappy sense of this being time to circle the wagons, of capitalism having to be defended once more from the hoi polloi.

  “I do believe we do things right in this country,” Tim remarked, with, for him, a fair degree of passion.

  It will, of course, not be the business culture that Forbes is defending but, rather, business itself. The Forbeses, too, may well take some pleasure in the collapse of monoliths, the end of business talk as a popular pastime (business talk, business secrets, should be the province of businessmen), and an affirmation of their own, standalone business model.

  It occurs to me that while subscribing to the Forbes attitude might not have made businessmen more ethical, it would certainly have been wise on everyone’s part to play it, Forbes-style, a little more conservatively. Businessmen get into trouble not just because of accounting tricks but because they think they’re something more than faceless businessmen—whereas at Forbes, a businessman plays it close to the vest.

  Yes. The arrivistes and wannabes screwed things up, but now the natural order may be righted.

  On the yacht, you’ll have the true believers in capitalism (in their madras jackets), and on dry land, everyone else—hurling insults at them.

  I began an email to Heilemann and Battelle on how this conference could be the first postbusiness conference. That that should be the subject here: What replaces business? What is the new energizing, organizing force?

  What would all the ambitious guys do now?

  9

  BOB PITTMAN—

  A DIGRESSION

  I Was sorry there’d be no Bob Pittman at the conference. He had become—at least for a moment—one of the media business’ most significant entities.

  This has to do with a certain cult of personality—he has a kind of suaveness which makes everybody else feel so small-time—but it also had to do with function. There was, everywhere, this sense of corporate limitations. As corporations got bigger and bigger, as indeed they all recommitted themselves to getting bigger and bigger still, there came the simultaneous understanding that bigness was paralyzing too. While you might be unassailable, you were also immovable.
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  Pittman was wily and foxy and came to be thought of as the person who could move the modern corporation. This wasn’t just because he was a smart manager or a brilliant salesperson (and he was the latter), but because he was rumored to have the touch.

  To understand, in a way other managers did not, pop culture.

  Certainly, he had the bona fides.

  He was attended by the magic of being from out of town. He was a heartlander—not a medialand dweller. This implied a kind of oneness with the great rolling public out there. Indeed, he had an actor’s look—and what is an actor, if not a sculpted every-man?

  He was almost Elvis-like. He came from the South and had come out of radio. There was no more basic American media than radio: teenagers and ad space.

  Plus he had social abilities. More important even, he had media abilities. Great press surrounded him.

  Social abilities, of course, were not necessarily distinct from media abilities (arguably, media abilities had become social abilities): Pittman and his wife would live for a period on Central Park West across the hall from Steve Shepard, who would become the editor of BusinessWeek. Shepard would come to conclude that Pittman was an exemplary manager and grant him favorable coverage for years to come, including the crowning cover story in BusinessWeek after the AOL Time Warner merger was completed.

  And then, most of all, there was MTV.

  Pittman either single-handedly invented the notion of a cable channel that would air (at no cost to itself) the promotional videos which had become popular for music acts, or he did not.

  This has become like the scholarly wrangle that surrounds certain not-precisely-authenticated works of art. The dispute does not so much discredit Pittman as put him at the exact center, even if its details are disputed, of the most brilliant media development in postmodern memory.

  After MTV was bought and Pittman exited, he founded the kind of enterprise that would become popular later: a no-company company, or a no-function company. Its product was Bob Pittman. We have Bob Pittman and you come to us with opportunities for Bob Pittman. It was like a Mafia thing. People lined up outside the door of Bob Pittman’s Quantum Media and were granted audiences with Pittman and, if he agreed to cooperate, then various terms were discussed wherein Bob Pittman lent you his approval.