The mogul empire

Earlier this month, the news sites DNAinfo and Gothamist were abruptly closed by their owner, the billionaire Joe Ricketts, after their staff voted to join the Writers Guild of America East. Ricketts, who founded Ameritrade and controls the Chicago Cubs, took down the home pages of both publications—including, temporarily, their archives, which made it hard for their suddenly jobless reporters to even access their own clips—and replaced them with a letter stating that the sites hadn’t been successful enough “to support the tremendous effort and expense needed to produce the type of journalism on which the company was founded.” Back in September, however, Ricketts wrote a blog post, “Why I’m Against Unions At Businesses I Create,” that cast his decision in a somewhat different light:

In my opinion, the essential esprit de corps that every successful company needs can’t exist when employees and ownership see themselves as being on opposite ends of a seesaw.  Everyone at a company—owners and employees alike—need to be sitting on the same end of the seesaw because the world is sitting on the other end. I believe unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed.  And that corrosive dynamic makes no sense in my mind where an entrepreneur is staking his capital on a business that is providing jobs and promoting innovation.

Of course, his response to his newly unionized employees, who hadn’t even made any demands yet, wasn’t exactly conducive to esprit de corps, either. As a headline in the opinion section of the New York Times put it, Ricketts, who supported Donald Trump after spending millions of dollars in an unsuccessful bid to derail his candidacy, seems to have closed his own businesses entirely out of spite.

And this isn’t just a story about unionization, but the unpleasant flip side of a daydream to which many of us secretly cling about journalism—the notion that in the face of falling circulation and a shaky business model, its salvation lies with philanthropic or ambitious billionaires. We’ve seen this work fairly well with Jeff Bezos and the Washington Post, but other recent examples don’t exactly inspire confidence. In 2012, The New Republic was acquired by Chris Hughes of Facebook, who cut its annual number of print issues in half and revamped it as a “vertically integrated digital-media company,” leading to the resignations of editors Franklin Foer and Leon Wieseltier. (Foer rebounded with a book pointedly titled World Without Mind: The Existential Threat of Big Tech, while Wieseltier has suffered from unrelated troubles of his own.) Go a little further back, and you have the acquisition of the New York Observer by none other than Jared Kushner, which went about as well as you would expect. As Rich Cohen writes in Vanity Fair:

The Observer was a hybrid—tabloid heart, broadsheet brain. A funny man in a serious mood, a serious man with a sense of humor…Kushner either did not get this or did not care. Millennials have a thing about broadsheets. They’ve grown up reading on phones, that smooth path of entry. They can’t stand unwieldiness—following a piece from front page to jump, and all that folding, and the ink stains your fingers.

Kushner took the Observer to tabloid size, discontinued its print edition, and even fired Rex Reed, turning the paper into a ghost town. He and Hughes are at opposite ends of the political spectrum, but they both seized a vulnerable publication, tried to turn it into something that it wasn’t, and all but destroyed it. Ricketts, who shut down Gothamist a mere eight months after buying it, simply took that process to its logical conclusion. And these cases all point to the risk involved when the future of a media enterprise lies in the hands of an outside benefactor who sees no reason not to dismantle it as impulsively as he bought it in the first place.

Obviously, there are countless examples of media companies that fared poorly after an acquisition, but I’ve been thinking recently about one particular case, in which The New Republic also figures prominently. The American News Company was the distribution firm and wholesaler on which many magazines once depended to get on newsstands, and its collapse in 1957 is widely seen as an “extinction event” that caused a meltdown of the market for short science fiction. (For additional details, see this post, particularly the comments.) Here’s how Frederik Pohl describes it in The Way the Future Was:

ANC was big, mighty, and old. It had been around so long that over the years it had acquired all sorts of valuable property. Land. Buildings. Restaurants. Franchises. Items of considerable cash value, acquired when time was young and everything was cheap, and still carried on their books at the pitiful acquisition costs of 1890 or 1910. A stock operator took note of all this and observed that if you bought up all the outstanding stock in ANC (a publicly held corporation) at prevailing prices, you would have acquired an awful lot of valuable real estate at, really, only a few cents on the dollar. It was as profitable as buying dollar bills for fifty cents each…So he did. He bought a controlling interest and liquidated the company.

The truth is slightly more complicated. The American News Company had been on the decline for years, with the departure of such major clients as Time, Look, and Newsweek, and its acquirer wasn’t a “stock operator,” but Henry Garfinkle, the wealthy owner of a newsstand chain called the Union News Corporation. There were obvious possibilities for vertical integration, and for the first year or so, he seems to have made a real effort to run the combined company.

Unfortunately, in the face of falling sales for the industry as a whole, his efforts took the form of a crackdown on small niche magazines that were having trouble sustaining large audiences, in a cycle that seems awfully familiar. (As one contemporary account stated: “The American News Company found that the newsstand demand for some of the more intellectual magazines like The New Republic, Commonweal, Wisdom, and Faith was so small that it was profitless to carry them.”) His brutal tactics alienated publishers, including Dell, its largest client, which filed a lawsuit for restraint of trade. More magazines left, including The New Yorker and Vogue, which, combined with an ongoing antitrust investigation, was what finally led Garfinkle to cut his losses and liquidate. Yet there isn’t much doubt that Garfinkle’s approach played a role in driving his clients away, and he had plenty of help on that front. He had started his empire with a single newsstand that he bought in his teens with a loan from a generous patron, and when he took control of the American News Company, the transaction was masterminded by his general counsel, who had joined the firm the year before. As one author describes this attorney’s “hardball legal tactics”:

[He] later claimed to have engineered Garfinkle’s successful coup. At the publicly held company’s annual meeting in March 1955, Garfinkle headed a dissident group that eventually forced the management to resign. This bold move allowed Garfinkle to gain control of the ninety-one-year-old company, which called itself the world’s oldest magazine wholesaler. Garfinkel revamped the ailing company, renamed it Ancorp National Services, Inc., and gained a near stranglehold on the distribution of newspapers and magazines in the Northeast.

This passage appears in Thomas Maier’s biography Newhouse. The benefactor who gave Garfinkle his start was Sam Newhouse, Sr., and the general counsel who oversaw the takeover—and remained at the company throughout all that followed—was none other than Roy Cohn. I’m not saying that Cohn, on top of everything else, also killed the science fiction market. But if history has taught us one thing, it’s that publications should watch out when a buyer like this comes calling.

The Wrath of Cohn, Part 3

On December 4, 1983, the readers of Parade magazine were treated to the cover story “How to Stay Fit” by President Ronald Reagan. In the article, Reagan, or his ghostwriter, described his fitness and diet regimen, which included “the cutting, hauling, and stacking of the wood” at his ranch, and finished:

I don’t want to be be overbearing about the need for exercise, but I would encourage each of you reading this article to think how you could get a little more physical activity into your life. I guarantee that you will feel better both physically and mentally…The next time they report I’m out riding or chopping or otherwise getting the old circulation going, why don’t you get out there and enjoy some exercise yourself? If all of us do, America will be in better shape, too. I’ll be thinking of you. Good health to you all.

In retrospect, it’s hard to read this without reflecting that it appeared at the exact moment that the Reagan administration was studiously ignoring—if not actively mocking—the AIDS crisis. It must have seemed odd to many people even at the time, and its backstory is even stranger. The attorney Roy Cohn had met with Ed Rollins, Reagan’s campaign manager, who was concerned about public perception of the president’s age and health. Cohn recalls in his own autobiography: “I thought about it, and I said it seemed to me that a well-placed magazine article showing the president’s physical prowess would be the best answer. The obvious magazine was Parade…The article served its purpose. It was widely received and acclaimed.”

Parade was “obvious,” needless to say, because it was published by Cohn’s good friend Si Newhouse, and everyone in the Reagan camp was pleased by the result, including Nancy Reagan, who, according to Roger Stone, “thanked [Cohn] profusely for it. She knew that Roy could get things done, and she respected and used people who could get things done.” Stone, like Ed Rollins, later worked on the Trump campaign, and much of Cohn’s advice, particularly on the media, has been passed down to the current administration. In all of the profiles about Cohn’s relationship with Trump—which often mention Rupert Murdoch, but not Si Newhouse—it’s this aspect that strikes me the most. Jonathan Mahler and Matt Flegenheimer wrote last summer in the New York Times: “Among the many things Mr. Trump learned from Mr. Cohn during these years was the importance of keeping one’s name in the newspapers. Long before Mr. Trump posed as his own spokesman, passing self-serving tidbits to gossip columnists, Mr. Cohn was known to call in stories about himself to reporters.” And in Vanity Fair, which has seamlessly pivoted to attacking Trump after decades in which it glorified him, Marie Brenner wrote:

Another of Cohn’s tactics was to befriend the town’s top gossip columnists, such as Leonard Lyons and George Sokolsky, who would bring Cohn to the Stork Club. He was irresistible to tabloid writers, always ready with scandal-tinged tales. “Roy would be hired by a divorce client in the morning and be leaking their case in the afternoon,” New Yorker writer Ken Auletta recalled. Columnist Liz Smith said she learned to distrust most items he gave her. A similar reliance on the press would also become a vital component of the young Trump’s playbook.

And when Trump heard of Cohn’s death, according to the Times, he said to himself: “Wow, that’s the end of a generation. That’s the end of an era.”

Roy Cohn would receive his most famous afterlife as the most vivid character in Tony Kushner’s Angels in America, in which he dominates the play to an extent that seems to have troubled even his creator. (In an interview with Adam Mars Jones, Kushner said: “I’m a little worried that in the process of figuring [Cohn] out I’ve overdone it and he’s maybe too sympathetic a character.”) It’s a stunning portrait, and it resonates even more deeply today. Reading it over this week, I was most struck by the speech in the first part, Millennium Approaches, that Cohn delivers to his doctor, Henry, as his body is ravaged by AIDS:

Homosexual. Gay. Lesbian. You think these are names that tell you who someone sleeps with, but they don’t tell you that…Like all labels they tell you one thing and one thing only: where does an individual so identified fit in the food chain, in the pecking order? Not ideology, or sexual taste, but something much simpler: clout. Not who I fuck or who fucks me, but who will pick up the phone when I call, who owes me favors. This is what a label refers to. Now to someone who does not understand this, homosexual is what I am because I have sex with men. But really this is wrong. Homosexuals are not men who sleep with other men. Homosexuals are men who in fifteen years of trying cannot get a pissant antidiscrimination bill through City Council. Homosexuals are men who know nobody and who nobody knows…I have clout. A lot. I can pick up this phone, punch fifteen numbers, and you know who will be on the other end in under five minutes, Henry?

Henry ventures his best guess: “The President.” Roy shoots back at him: “Even better, Henry. His wife.”

This has the ring of authenticity, and the speech itself reflects what Cohn evidently believed about himself. (In a profile written a decade ago by Jeffrey Toobin in The New Yorker, Roger Stone said: “Roy was not gay. He was a man who liked having sex with men. Gays were weak, effeminate. He always seemed to have these young blond boys around. It just wasn’t discussed.”) Toward the end of Perestroika, the second part of the play, the ghost of Ethel Rosenberg says to the dying Cohn:

They beat you. You lost. (Pause). I decided to come here so I could see could I forgive you. You who I have hated so terribly I have borne my hatred for you up into the heavens and made a needlesharp little star in the sky out of it…I came to forgive but all I can do is take pleasure in your misery. Hoping I’d get to see you die more terrible than I did. And you are, ’cause you’re dying in shit, Roy, defeated. And you could kill me, but you couldn’t ever defeat me. You never won. And when you die all anyone will say is: better he had never lived at all.

I don’t know if Kushner ever really believed this—one of Cohn’s last lines in the play is “I win!”—but it doesn’t seem true now. Cohn wasn’t defeated at all, although the extent of his victory took thirty years to become manifest. On the day after the election, Stone told Vanity Fair, Trump mused: “Wouldn’t Roy love to see this moment? Boy, do we miss him.” And when I think of Cohn today, I remember these lines from Kushner, and I know that the play isn’t over:

Roy: I’m immortal, Ethel. (He forces himself to stand) I have forced my way into history. I ain’t never gonna die.
Ethel Rosenberg: (A little laugh, then) History is about to crack wide open. Millennium approaches.

The Wrath of Cohn, Part 1

Not long ago, I was browsing through Peter Manso’s enormous oral biography Mailer: His Life and Times, which has been one of my favorite reads for years, when I came across a passing reference to Norman Mailer’s friendship with the attorney Roy Cohn. Mailer and Cohn couldn’t have been less alike in their politics, but they found each other useful, and they were linked by the late publisher Si Newhouse, who passed away just last month. Cohn doesn’t figure prominently in any of Newhouse’s obituaries, but the two of them first met as teenagers at the Horace Mann School in the Bronx and remained lifelong friends. In the book Newhouse, Thomas Maier explains the Mailer connection:

With Cohn’s help, Norman Mailer was convinced to become a contributor to Newhouse’s Parade magazine and later to sign a lucrative book contract with Random House…Si [had] expressed a desire to sign up Mailer, hoping to add that lustrous name to his publishing house’s stable of well-known authors…Cohn relayed this version of Si’s intentions to Peter Manso, a writer who then was close with Mailer and would later write a biography about him. Si Newhouse wanted Mailer to write a magazine piece about his views on capital punishment, Cohn told Manso…”He’ll pay cash,” Cohn told Manso about the Newhouse offer. “We’ll give him seven thousand dollars for the piece.”

Maier doesn’t mention how the two men happened to know each other, but they had evidently met when Manso was assigned to interview Cohn for Playboy in 1981—which is a detail that I’ll explore further in a moment.

Cohn took obvious pride in serving as a power broker, with what Maier describes as a talent for “making things happen,” and he systematically cultivated his famous contacts. After Mailer wrote the article on capital punishment and another piece on Russia, the two men became friendly, despite what Cohn saw as Mailer’s Soviet sympathies. Maier writes:

“I think Norman was always a little embarrassed about his association with Roy—he didn’t want to be too public with it,” said Peter Fraser, Cohn’s companion during the early 1980s when Roy’s personal life became an open secret. Cohn became involved in other business matters with Mailer. He rented a small cottage for himself and Peter Fraser in Provincetown, Massachusetts. The house was owned by Mailer and was next to a larger house where Mailer’s family stayed during the summer. On some summer evenings, Cohn and Mailer would hold court at a large dinner shared by family and friends.

Manso, who was living with Mailer at the time, goes even further, recounting that Cohn wanted to join their plan to turn the house into a condo, securing an interest-free loan of $300,000 from Si Newhouse for “all of us.” When Manso told Mailer about the deal, the author responded: “It’s about time I had a patron.” This is already pretty good gossip, but it gets better. In 1985, according to Manso, the Mailers attended Cohn’s fifty-ninth birthday party, which had a guest list that included Si Newhouse, Roger Stone—yes, that Roger Stone—and Donald Trump. After Cohn died the following year, the Mailers didn’t go to the memorial service, but a number of other prominent friends did, as Manso relates: “Donald Trump sat in the audience weeping with Cohn’s lover, Peter Fraser, and the ubiquitous Si Newhouse.”

There’s obviously a lot to unpack here, but I want to focus for now on the thread between Newhouse, Cohn, and Trump. Cohn’s mentorship of Trump has been closely scrutinized, including by Peter Manso, who wrote a reminiscence for Politico last year about a party at Cohn’s house in 1981, at which he found himself seated next to “the boyish-faced real estate mogul, habitué of Le Cirque and staple of Page Six.” (In Manso’s account, Trump inquired of him: “Roy says you live on the Cape, and that you’re writing a book about Norman Mailer. Norman’s smart but a little crazy, right?” He then asked Manso whether or not he should do an interview with Playboy, which he eventually did, kicking off what became a long association between him and the magazine.) What’s more surprising is that Newhouse’s friendship with Cohn and its obvious relevance to Trump hasn’t received more attention. Last year, a profile in The New Yorker—which Newhouse still owned at the time—highlighted the publishing magnate’s role in the writing of The Art of the Deal. As the reporter Jane Mayer relates:

The idea of Trump writing an autobiography didn’t originate with either Trump or [ghostwriter Tony Schwartz]. It began with Si Newhouse, the media magnate whose company, Advance Publications, owned Random House at the time, and continues to own Condé Nast, the parent company of this magazine. “It was very definitely, and almost uniquely, Si Newhouse’s idea,” Peter Osnos, who edited the book, recalls. GQ, which Condé Nast also owns, had published a cover story on Trump, and Newhouse noticed that newsstand sales had been unusually strong.

Cohn’s name isn’t mentioned here at all. Yet it’s hard to believe that he didn’t have anything to do with what turned out, in the end, to be a far more significant literary deal than the one that he had pulled off a few years earlier by luring Mailer to Random House.

For a connection that exists in plain sight, this angle remains strikingly unexplored. The only reference to it that I can find online is a tantalizing quote from Thomas Maier himself, who said last month in an interview with Bloomberg: “Newhouse’s fondness for Trump, the link with Roy Cohn and the way in which the Newhouse publications promoted Trump over the last twenty years really helped make him a nationally known figure and is one of the great unknown stories of the Trump rise to power.” I can’t help but agree, and while it’s tempting to suspect that Newhouse’s influence kept the story from being fully investigated during his lifetime, it’s also possible that the subsidiary players remained genuinely unaware of it. Mailer’s case provides an instructive parallel. After describing Mailer’s big contract with Random House and how his first novel with Newhouse, Tough Guys Don’t Dance, was excerpted in the resurgent Vanity Fair, Maier writes:

None of the Newhouse editors, however, were aware of Si’s guiding hand or the help of Roy Cohn in securing Norman Mailer’s services. “Upon reading the manuscript it was my idea, purely my idea, to buy it for Vanity Fair,” insisted Leo Lerman, then Vanity Fair’s editor, in describing how he decided to run excerpts of Tough Guys after talking with Mailer’s Random House editor, Jason Epstein.

Cohn was content to remain in the shadows, and he had reason to take satisfaction in the service that he had rendered to his friend and new neighbor. Mailer had suffered from money problems for decades, and the deal with Newhouse offered him an important source of stability, as his editor Jason Epstein observed: “I sensed that what Norman really wanted was to clear the decks and have nothing to worry about financially for the rest of his life.” Trump was at the beginning, not the end, of his career, and what Cohn and Newhouse had to offer him was rather different, but no less precious—and the consequences would be immense. I’ll be talking more about this tomorrow.