From the living room of Barry Diller’s Manhattan apartment in the Carlyle Hotel, it is possible, on a clear day, to see the Midtown skyline, where the Condé Nast building rises like a ziggurat from the Gilded Age of magazine journalism. The view was an appropriate one for a man who in the autumn of 2010 was about to pour millions of dollars into the dead tree business.
Diller runs IAC, a portfolio of Internet companies that includes Match.com, OkCupid and Vimeo. His tolerance for risk is such that his friend David Geffen once described the fireplug of a billionaire as having “elephant balls.” Diller’s bets often pay off. He owns one of the biggest sailing yachts in the world. His neighbor is Mick Jagger. Print journalism, though, would be a different kind of gamble for him.
Joining Diller in his living room was 92-year-old stereo magnate Sidney Harman. A few weeks earlier, Harman had paid $1 to buy Newsweek from the Washington Post Co. The once-proud magazine was in a death spiral, having lost more than $70 million in the previous two years, after various failed efforts to save it had only resulted in circulation plunging to half of what it had been a few years earlier, an exodus of marquee writers and a full-fledged identity crisis. Harman—who had taken on what a well-placed source told me was nearly $75 million in liabilities for his $1—needed a turnaround artist.
And there she was, perched next to Diller, legs crossed, a perfect tousle in her blond bob: Tina Brown, the legendary former editor of Vanity Fair and the New Yorker. Famous for generating “buzz,” Brown had remade the magazine business in the 1980s and 1990s. By 2010, she was editing the Daily Beast, a two-year-old online magazine owned by Diller, which had generated much buzz while losing $10 million a year. Now, they were talking with Harman about a merger of the two money-bleeding properties. It made a certain kind of sense: Newsweek’s print advertising still fetched far more money than online ads, while the Beast presumably had the digital savvy Newsweek lacked, if no business model to speak of.Already, Brown had met with Harman in the Hamptons to eat quiche and talk shop. She was intrigued by Harman’s merger idea and responded to it with a long letter laying out her vision for Newsweek. By the time they met in Diller’s home, Harman had taken to calling her “princess” and “my beauty.”“Tina really, really wanted this thing,” says a person with knowledge of the negotiations. “She wanted one last stab at a print magazine.”Her previous run at a magazine had ended famously in 2002, after she bombed through some $50 million in 2 1/2 years on a doomed monthly called Talk. In 2006, she had tried, and failed, to land the top job at Time. Now, venerable Newsweek represented a chance to restore luster to her career. “I think the business plan was that Tina was going to be fabulous,” says the person familiar with the negotiations. “I literally don’t think there was ever a different plan.”
Thursday, May 1, 2014
Fourth Estate: How to Lose $100 Million, The Undoing of Tina Brown
From Politico Magazine:
