Truman was determined that Condé Nast launch an art magazine, and the two men tussled over the idea for months, though clearly more personal issues were at stake. “Look, you should trust me. I know what’s going on,” he told Newhouse. “That’s why you hired me. You should let me do it.” Finally, there’d been a shouting match in Newhouse’s office, an unusual blowup that surprised them both with its intensity. An art magazine had no advertising base, Newhouse pointed out. “He was right,” says Truman.
Tom Wallace, Truman’s replacement, didn’t envision his role as a guiding creative force; that era was over. He worried about the web. “He’s the protector of high-level quality,” I’m told vaguely, though few editors seem to count on him, except for occasional help in interpreting one of Newhouse’s inscrutable shrugs. “Tom is not electricity. He is steady rhythm seeking perfection,” says Harry Evans, Wallace’s former boss. To some, the new régime seems a collection of organization men,
fin de l’empire types marking the decline of an enterprise once bristling with unbound and misbehaving creative energy. One former editor says, “Si has surrounded himself with people who look and sound like executives.”
As the economy has fallen apart over the past eighteen months, first gradually then all at once, Condé Nast’s biggest problem has been the newspaper empire that Sam created. Last year, the Newhouses’ Newark
Star-Ledger, one of their biggest papers, may have lost as much as $40 million. No one in the family believes the newspaper business is coming back. The family’s cable business, Bright House Networks, with enterprises in several states, still tosses off tens if not hundreds of millions of dollars, keeping the Advance, which houses all of the family’s businesses, afloat, and the company is virtually debt-free; the family has always hated to borrow. But resources are now spread thinner. The company no longer has the luxury of pumping cash into a struggling title. “The family needed to save money,” Townsend explained to one executive after one magazine closed. Without profit, there’s no “distributable cash” for the family. So far this year, Condé Nast is in the red, though the closings and cuts should drive money to the bottom line. The belief around the building is that next year, if the economy recovers, Condé Nast will again turn profitable.
While the strategy by which Condé Nast will move into the future does not entirely ignore the Internet, it does not exactly embrace it either. When a subordinate worries in a meeting whether the Internet will limit the amount of profit magazines throw off, Townsend may take the person aside, according to one former executive. “Don’t be so negative,” he’ll say. “You’re upsetting the old man.
Magazines in general and Condé Nast in particular are certainly not as threatened in the short term as are newspapers. But Newhouse has been slow to get his mind around any significant brand extensions into the new medium. For nearly a decade, Newhouse opposed purchasing Wired.com. Three years ago, Donald Newhouse’s son Steve finally pulled off the deal, and the website now has sixteen times more unique visitors than the magazine has in circulation. Still other towering brands like
Vogue have lain largely fallow.
As a rule, Newhouse has kept his editors away from the web. He has also rarely pushed publishers in that direction, seeing the Internet as a vehicle for selling magazine subscriptions and not much else. And the revenues are comparably minor. He can’t get excited about them—“a painting to Si,” says one cynical former executive. Only about 3 percent of Condé Nast ad revenues came from digital last year, according to
Advertising Age, among the lowest in its class.
Steve Newhouse, 52, Si’s nephew, is responsible for many of the companywide web initiatives, and though he hasn’t found a partner in his uncle, some of his ventures have been prescient. He helped create Epicurious.com and Style.com, both conceived as new brands for a world that would no longer be magazine-centric. The point has been less to make a profit than to position the company for a future in which Si Newhouse is gone and the Internet is central. “Maybe an 80-year-old man isn’t the best person to figure out what the next generation of readers wants,” says one former editor.
To a surprising degree, there’s a clannish, insular, old-fashioned quality to Condé Nast and its sister businesses. Newhouse and his brother, Donald, convene regular family meetings—a kind of tribal council—just as their father did. As befits their small-town roots, they distrust the outside world. They still have never hired an outside executive to manage the vast businesses. Says one person close to the family, “Business integration is a family affair.” The meetings are attended by perhaps twenty family members. There are reports from various business heads, like Bob Miron, 71, a folksy-seeming cousin who runs the profitable cable operation from Syracuse with his son and a daughter. The family works hard for unity; at meetings, family members voice opinions but respectfully. Nothing is voted on. “At the end of day, Si and Donald lead the decisions,” says an executive who’s attended meetings. By all accounts, the brothers are incredibly close. “If you’ve talked to one, you’ve talked to the other,” says a person who talks to both.
Ostensibly, everyone respects the process of governance. But there are clear generational differences. The younger generation is not so young—its members are in their fifties. “Are 50-year-olds pulling on the bits? How could they not be? Here’s Si, 81 years old, sitting in the middle of business,” says an adviser. Some of the frustration surfaced over Florio, whom the younger generation viewed as an embarrassment, Si’s folly, a sign of the old man’s misplaced loyalty or stupidity.
Si Newhouse is still the plenipotentiary, plunging into the details. But his age has been something of an issue. He can be forgetful. Sometimes the famous early riser dozes off in afternoon meetings, and he is slowly going deaf. No one doubts, however, that he’s firmly in control. “Newhouse is involved with whatever he wants to be,” I’m told.
No one expects him to retire anytime soon. Still, preparations are quietly being made for a time when Newhouse is no longer on the scene. The succession seems to have been largely settled, even if details need to be worked out. The kingdom will be gerrymandered among the sons and cousins along the lines of Townsend’s org chart. Bloodlines matter. Primogeniture is the rule. In business decisions, Steven and Michael, Donald’s sons, and Sam, Si’s son, “are first among equals,” as one person who’s dealt with the family on financial matters says. Bob Miron and his children will run the cable business. Jonathan, 57, the worldly London-based cousin with a British passport and a pocket square, will no doubt head the magazines. Jonathan already runs the international magazines, which number about a 100 and produce as much in revenue as the domestic magazines. More than the others Jonathan has shaken free of the family. “Brilliant to stake his turf, to get out of the middle of this family,” says a person who knows him. Jonathan enjoys his stature as an international media mogul. About Si, Jonathan told the
Times, “I value his experience and wisdom. Still, we have our own business realities here.”
“Only a fool, and I don’t think there are any fools involved in this story, would assume that the picture is going to stay the same,” says David Remnick.
Steven is the other prominent next-generation Newhouse. He’s short, antsy, and more closely resembles Si, his uncle, with the family’s overwide smile. He lives in the West Village and is married to Gina Sanders, the publisher of
Lucky. Steven’s role is more circumscribed than Jonathan’s, since he operates within Si’s realm and, at times, at his pleasure. Other executives say he can bridle at these limits. Steven, as if to compensate, has become a kind of protégé to Townsend, who, it’s pointed out, doesn’t resist the Internet. Steve will certainly be in charge of the company’s Internet efforts going forward.
The next generation waits patiently, but there is a clear sense of relief that Si’s domain is increasingly well defined—the emperor has become a division chief. The editors report to Si; the publishers report to Townsend, a significant shift. The days when one all-powerful person is in control are over. “Chuck Townsend runs the company,” says one executive, a fact that clearly pleases the next generation. There also is a tendency, however slight, to patronize the old man. “We’ve talked about this,” Townsend has been heard saying to Newhouse. “He doesn’t get in the way,” is a phrase people have used to praise him.
Some of the once-ironclad faith in Newhouse’s judgment has been eroded by
Portfolio. The family was enthusiastic about the idea, but Si’s persistence in the original course was confounding. For the family, it was a delicate matter. “They didn’t want to usurp his prerogative,” says an insider. But ultimately they didn’t leave him much choice.
At this year’s American Society of Magazine Editor awards at Lincoln Center, the Pulitzers of magazine journalism, waiters in formal dress served canapés. And then the magazine Establishment filed into the auditorium, where Jimmy Fallon presented the first award, momentarily giving the event an Oscars-like feel.
Newhouse shuttered
Portfolio the week before, but his surviving magazines dominated the awards, winning seven. Newhouse sat next to David Remnick, as he does every year, and cheered and cheered, more animated than anyone has ever described him to me. At one point, he jumped from his seat to clap award-winner Chris Anderson, of
Wired, on the back. From the stage, editors issued warm shout-outs to Newhouse, who, though sitting in the audience, was the evening’s dominant figure. Remnick, who collected three awards, praised him as the Babe Ruth of magazines, swinging for the fences.
Later in the program, there was a special lifetime-achievement award for Annie Leibovitz, the photographer whose 25-year career at Condé Nast Newhouse has lavishly financed. Years ago, she signed a lifetime contract that pays her more than tens of millions of dollars, according to one insider.
Three of Newhouse’s editors, past and present, took the stage to praise Leibovitz, the diva of divas, the kind of exotic, cantankerous talent that could only exist in Si’s world. Annie shows up at photo shoots with two vans of assistants and equipment, commandeering the scene. During her baroque financial troubles, Newhouse rushed to her aid, making a personal loan said to be seven figures.
Onstage, Tina Brown, Anna Wintour, and Graydon Carter lined up, three of the four editors who praise Annie—Jann Wenner is the fourth. The stage was bare, like in a Beckett play, commanding presences waiting awkwardly on spots visibly marked in blue tape—the Oscarish aspirations broke down long ago.
Brown was in a modest dark dress, the assertive and unapologetic popularizer, rhyming jolt with volt to give a feel for the impact of Annie’s photos, and then, not quite done, comparing Annie’s photos to crack cocaine. Wintour in knee-high fur-fringed boots, hunched a bit forward at the shoulder. Almost shyly, she read from a prepared speech and talked about the glamour and the difficulties of working with Annie. Carter, in his blazer and his trailing white hair—like George Washington’s wig—asked, “After Avedon, who is there?”
Up onstage it was the golden age of magazines, when one powerful man set legions in motion. And yet, I couldn’t help but notice, the stars were all of a certain age, pushing or past 60. Crack, Avedon: Even the references are from a past era. And yet for a night, the past and Newhouse are in their glory. His dark mood lifted.
That night,
Backpacker magazine matched
The New Yorker’s three awards.
“I better get an outdoor editor,” Remnick whispered to Newhouse.
“Yes, escape seems to be the thing,” Newhouse replied.
Also please kindly disregard any typos I might have made
But then again Bauer Media is not exactly known for their common sense.
