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 2

In the June 8, 1992 issue of The New Republic, the journalist Carl Bernstein published a long essay titled “The Idiot Culture.” Twenty years had passed since Watergate, which had been followed by what Bernstein called “a strange frenzy of self-congratulation and defensiveness” on the part of the press about how it had handled the story. Bernstein felt that the latter was more justified than the former, and he spent four pages decrying what he saw as an increasing obsession within the media with celebrity, gossip, and the “sewer” of political discourse. He began by noting that the investigation by the Washington Post was based on the unglamorous work of knocking on doors and tracking down witnesses, far from the obvious centers of power, and that the Nixon administration’s response was “to make the conduct of the press the issue in Watergate, instead of the conduct of the president and his men” and to dismiss the Post as “a fountain of misinformation.” Bernstein observed that both Ronald Reagan and George H.W. Bush had displayed a Nixonian contempt for the press, but the media itself hadn’t gone out of its way to redeem itself, either. And he reserved his harshest words for what he saw as the nadir of celebrity culture:

Last month Ivana Trump, perhaps the single greatest creation of the idiot culture, a tabloid artifact if ever there was one, appeared on the cover of Vanity Fair. On the cover, that is, of Condé Nast’s flagship magazine, the same Condé Nast/Newhouse/Random House whose executives will yield to nobody in their solemnity about their profession, who will tell you long into the night how seriously in touch with American culture they are, how serious they are about the truth.

By calling Ivana Trump “the single greatest creation of the idiot culture,” Bernstein pulled off the rare trick of managing to seem both eerily prescient and oddly shortsighted at the exact same time. In fact, his article, which was published a quarter of a century ago, returned repeatedly to the figure of Donald Trump. As an example of the media’s increasing emphasis on titillation, he cited the question that Diane Sawyer asked Marla Maples, Trump’s girlfriend at the time, on ABC News: “All right, was it really the best sex you ever had?” He also lamented: “On the day that Nelson Mandela returned to Soweto and the allies of World War II agreed to the unification of Germany, the front pages of many ‘responsible’ newspapers were devoted to the divorce of Donald and Ivana Trump.” To be fair, though, he did sound an important warning:

Now the apotheosis of this talk-show culture is before us…A candidate created and sustained by television…whose willingness to bluster and pose is far less in tune with the workings of liberal democracy than with the sumo-pundits of The McLaughlin Group, a candidate whose only substantive proposal is to replace representative democracy with a live TV talk show for the entire nation. And this candidate, who has dismissively deflected all media scrutiny with shameless assertions of his own ignorance, now leads both parties’ candidates in the polls in several major states.

He was speaking, of course, of Ross Perot. And while it’s easy to smile at a time when the worst of political television was The McLaughlin Group, it’s also a reminder of how little has changed, on the anniversary of the election of the man whom Bernstein has called “dangerous beyond any modern presidency.” (I also can’t resist pointing out that the Ivana Trump cover of Vanity Fair included this headline in the lower right corner: “Hilary Clinton: Will She Get to the White House With or Without Him?” And this was half a year before Bill Clinton was even elected president.)

Yet it’s the “Condé Nast/Newhouse/Random House” nexus that fascinates and troubles me the most. In the biography Newhouse, Thomas Maier quotes an unnamed source who worked on The Art of the Deal, which Si Newhouse aggressively packaged for the protégé of his friend Roy Cohn: “It’s obvious that this book was like Vanity Fair, the preeminent example of a certain instinct that Si has for a kind of glamour and power and public presence. It’s like Trump was a kind of shadow for him, in the sense that Si is so shy and so bumbling with words and so uncomfortable in social situations. I think his attraction to Trump was that he was so much his opposite. So out there, so aggressive, so full of himself.” More pragmatically, Trump was also a major advertiser. Maier quotes the editor Tina Brown, speaking way back in 1986: “If you were producing a funny magazine, you’d have to go for people like Trump…[But] there is also that awful commercial fact that you can’t make fun of Calvin Klein, Donald Trump, and Tiffany.” And this wasn’t just theoretical. Maier writes:

Those who were truly powerful in its world were granted immunity from any real journalistic scrutiny. When Donald Trump was a high-flying entrepreneur, he learned that Vanity Fair was preparing a short item about how the doorknobs were falling off in Trump Tower. Shortly after this journalistic enterprise was launched, however, Brown received a call from Si Newhouse, who had gotten a call from Trump himself…Newhouse was not going to let Trump’s advertising cease because of some silly little item. (Only after he suffered a huge financial loss in the 1990s did the magazine dare to examine Trump in any critical way.)

Given the vast reach of Newhouse’s media empire, this is truly frightening. And it’s hard not to see the hand of Roy Cohn, whose fifty-second birthday in 1979 seems to have been the moment when Newhouse and Trump first found themselves in the same room. “More than anyone else outside the direct kinship of blood,” Maier writes, “Cohn seemed to hold the keys to Si Newhouse’s world.” Cohn prided himself on being a power broker, and he eagerly used Newhouse’s publications to reward his patrons and punish his enemies. (There were also more tangible compensations. According to Maier, Sam Newhouse, Sr. once wrote Cohn a check for $250,000 to get him out of a financial jam, much as Si would later do, at Cohn’s request, for Norman Mailer.) And this intimacy was expressed in public in ways that must have seemed inexplicable to ordinary readers. On April 3, 1983, Cohn appeared on the cover of Newhouse’s Parade, which had the highest circulation of any magazine in the world, with a story titled “You Can Beat the IRS.” Cohn spent much of the article mocking the accusations of tax evasion that had been filed against him, and he offered tips about keeping your financial information private that were dubious even at the time:

Keep one step ahead of them: If there is a problem, change bank accounts so they can’t grab your funds by knowing from your records where you bank. If they get canceled checks and information from your bank, they will be in a position to know much more about your life than is acceptable.

And this was just a dry run. Cohn was serving as a placeholder, first for his patron, then for his ultimate pupil. Tomorrow, I’ll be looking at how Cohn and Newhouse are part of a direct line that connects Reagan to Trump, and what this means for us today.

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.