The last tycoon
12 July 2009
Si Newhouse Jr, 81, is chairman of Condé Nast, a magazine company like no other. His editors are treated like celebrities and even in these tough times have almost limitless funds to produce the world's glossiest, most aspirational titles. Here, Steve Fishman goes behind the scenes at Vogue, Vanity Fair and the New Yorker to reveal the glamorous, gossip-filled world of the last luxury media mogul.
Samuel Irving Newhouse Jr, chairman of Condé Nast, falls in love with his editors. His romance with Joanne Lipman began over lunch at his UN Plaza apartment, with its beige carpets - no red wine allowed - and paintings by Warhol, de Kooning, Cézanne. Lipman, 47 years old, who had spent her entire career at the Wall Street Journal, is a serious journalist with a serious mien, and long legs, which she likes to show off with short-skirted power suits. Lipman is "attractive" in Newhouse's vernacular ("He uses the word like others use the word spiritual," says a former editor) and the two brainstormed at a small dining-room table. "Si" Newhouse, in his standard, worn New Yorker sweatshirt, told her he had an idea for a business magazine. Newhouse didn't say much more; he rarely does. He asks questions. But Lipman excitedly filled in the details.
Newhouse's pursuit of Joanne Lipman was unusual. In most cases, someone else winnows future editors, presents the possibilities to Newhouse, shapes the conversations. But Newhouse, this time, made a point of doing it himself - Portfolio was very much his thing. And by the end of the day, he'd decided he wanted Lipman to be editor of the magazine he planned to launch, which would be called Condé Nast Portfolio. Newhouse pledged patience and breathtaking resources - said to be more than $100m over five years. It was a great romance even if, like many great romances, others shook their heads about it, wondering whether Newhouse's passion for Lipman was entirely rational.
Business magazines were, after all, in decline. And soon, turmoil in Portfolio's offices, along with incessant leaks to blogs and tabloids, made Lipman seem a caricature of the imperious Condé Nast editor, ruling from on high, out of touch. Even factions within the Newhouse family believed Si was blind to the real situation at Portfolio - "a good idea, badly executed," was how one person described the magazine.
Finally, Newhouse himself couldn't ignore the economic realities. Portfolio was on track to lose $15m in a year; the total cost may have ballooned to as much as $150m. On 27 April, Newhouse summoned Lipman, this time to his 11th-floor office, with its giant Andreas Gursky photograph of the NASDAQ sign on the outside of the Condé Nast building, to deliver the difficult news. In the past, Newhouse's breakups had been unsentimental. The past was over - he moved on. His editors sometimes saw it on TV or heard it from others. This one was different. "I love Portfolio," he told Lipman, with obvious feeling. "I love it, too," Lipman replied. A star-crossed romance. "It was painful," says one person close to him. "It wasn't just a financial investment. He had great hopes for it."
Newhouse has never been one to show much emotion. But in the past two years, he has had to close Jane, House & Garden, Men's Vogue, Golf for Women, Domino, and finally Portfolio. At Condé Nast, the rumour mill, accurate or not, continues to grind. Which will be next? Wired? Architectural Digest? Does the company really need two food magazines? The grim work has taken a toll. His own personal wealth has declined by half, to some $2bn, but personal wealth was never the point. "Without Condé Nast, he would cease to exist," says a person close to him. "It's where he comes alive."
So when it dies a bit, he does, too. "I've never seen him so depressed," says one person on the publishing side. On his next birthday, he'll be 82, and Portfolio may have been his last great fling. Who knows whether he will get to launch another magazine?
Si Newhouse is nothing like his magazines. Short, physically unimposing, dressed for the office in khakis and beat-up loafers, he's the opposite of glamorous. "He's always had the luxury of being himself," says a friend. He's notably inarticulate, speaking softly, with long, excruciating pauses between words. A decision to commit millions of dollars might be communicated with a "very, very quiet whispered yes," says one former editor.
It's a type of decision Newhouse, one of the great media entrepreneurs of the past three decades, has made with breathtaking regularity. In 1979, when magazines such as McCall's, Good Housekeeping, Redbook, and other sensible books were leading women's titles, Newhouse started Self magazine for a new generation of restless, body-proud female readers and bought GQ for a new style-empowered man. Four years later, he relaunched Vanity Fair, which - after years of huge losses amid editorial floundering - channelled and helped create the arriviste dreamscape that took off in the 80s. Along the way, he bought the New Yorker, then brashly rebuilt it, grafting its sedate DNA to Tina Brown's topical buzz, creating a fascinating Frankenstein that still is at the core of the magazine's identity. He also remade Details, a trend-dipping downtown title, and bought Wired, the champion of the technological revolutions that now nip at his empire.
Though Newhouse built Condé Nast with ruthless commercial motives - when someone asked him about the purpose of his company, his answer was, simply, "To make money" - there are clearly other motives at work. "He loves magazines, meaning the whole and all of it, the variety of things published, the business details, the visions and actions and personalities of his editors, the problems, the problem-solving, the ink and paper... the all of it," David Remnick, the editor of the New Yorker, said to me.
If Remnick's remark sounds a bit like a eulogy, it very well might be. Condé Nast, like all magazine companies, is struggling. The luxury market on which it depends is anaemic, with no cure in sight. And the internet, workaday and diffuse and all-too-democratic to an elitist like Newhouse, competes for the dollars that remain. Almost all of his magazines have been hammered by the downturn. Wired's ad pages are down almost 60% in the first three months of this year versus last; the New Yorker's are down 36%, Vogue and Vanity Fair both around 30%. Newhouse has long been a modernist, with forward-looking instincts, his timing not too far ahead and never behind, but suddenly he seems to have become a kind of magazine sentimentalist, in love with a world that more and more exists in the past.
One of the stories Si Newhouse tells about his father, Samuel Irving Newhouse Sr, known as Sam, is how he came to purchase the Condé Nast company. Just before his 35th wedding anniversary, Sam, a tiny bulldog of a man, departed for work before dawn, as always, and returned later that day with a present for his wife: Vogue magazine, the jewel of Condé Nast's five titles. "My father bought the company as a gift for my mother," Newhouse likes to say. It's told as an affectionate story about a distant, work-obsessed father - "My complaint about time spent on the job is that there is not enough of it," Sam once wrote - and the even tinier wife he doted on. But it's also revealing about father and son.
Sam was a newspaper man - Si didn't see much of him until he was old enough to visit the Staten Island Advance, Sam's first paper. By Sam's death in 1979, at the age of 84, he'd amassed a newspaper empire that stretched from Newark, New Jersey, up to Portland, Oregon - larger, by some measures, than that of William Randolph Hearst's.
Both of Sam's sons were college dropouts who worked in the business from the age of 21. Sam tapped Donald, his younger son, to run the newspapers. Si was installed at Condé Nast - he finally became chairman in 1975. "Those who knew him well seem to think he trusted the judgment of his younger son, Donald, more than Si," writes Thomas Maier in his excellent biography, Newhouse.
It was clear what Newhouse's father thought of magazines; they were baubles, suitable for socially ambitious middle-aged ladies. Si, though, would ultimately prove his father wrong about the value of the magazines and about his talents.
Newhouse's magazine mentor was Alexander Liberman, who'd shone as art director at Vogue in the 1940s and became editorial director in 1962. A Russian-born, European-raised artist - he had minor renown as a sculptor and painter - Liberman had a gift for wooing the powerful. According to his stepdaughter, ambition was his animalistic outlet. He loved the court politics that developed at Condé Nast, and his Machiavellian tactics were both a way of doing business and a kind of aesthetic value, part of the company's frisson.
Liberman and Newhouse eventually became an inseparable king and privy counsellor, constantly conferring sotto voce. Liberman introduced the awkward heir to art and to artists and instructed him on the nuances of social calibration, such as "who was famous and who was important" - different categories entirely, as a former publisher explains.
Liberman was also an original voice who talked in mystical terms about magazine-making, and his sensibility became the sensibility of the whole company. "He was a genius," says Anna Wintour, editor of Vogue. Liberman prized magazines' power to transcend the quotidian - "Dear friend, where's the glamour?" he once woefully asked Harry Evans, the first editor of Condé Nast Traveler.
The two came to share a philosophy, which was, at its simplest, "Magazines are precious things," as Liberman sometimes told editors. They require pampering and purity and, not incidentally, money. Liberman tore up layouts at the last minute and counselled editors to spend, spend, spend, because spending was part of the aesthetic, almost an end in itself.
Newhouse's father died in 1979, a year that coincided with a burst of creative and commercial energy that would reshape the magazine landscape. After Self took off, Newhouse relaunched Vanity Fair, a Condé Nast flagship that had failed during the Great Depression, with a bold but vague idea of a popularised, glossier version of the New Yorker. The magazine consumed huge amounts of cash, $75m in its first few years. With its sombre black-and-white covers by Irving Penn (a Liberman discovery) and sometimes effete content, it struggled to find a voice. Within a year, Newhouse had dismissed two editors before hiring Tina Brown, the first of his crushes and the first of Condé Nast's famous editors. Brown "kick-started" the current incarnation of Condé Nast, says James Truman, Condé Nast's former editorial director.
Brown concurs. "I brought in the news gene," she says. "Newhouse came to understand that news was a key to connection to the culture." But, of course, what news mostly meant was buzz. Brown had an instinct, and an unrestrained affection, for power, and she set about glamorising it, whether in politics, Hollywood, business, or crime. The notion that a magazine could borrow celebrity power to increase its own, such a truism now, was revelatory at the time.
Newhouse's timing was exceptional. The thrusters under the boom economy were charging, and with them, a new type of reader appeared. Newhouse's magazines appealed to what would be called aspirational readers.
"He created [in Condé Nast] a reality in which he is no longer the bumbling, asocial kid he grew up as," says one person close to him. In this analogy, Newhouse is in the role of Louis B Mayer, the notoriously tyrannical MGM head who loved his stars but made them quake. "Si loves being surrounded by divas and egomaniacs," says one former editor. When one editor called another a "****ing b*tch", Newhouse didn't mind. "Yes, but she's our b*tch," he said. He delights in the Darwinian drama that takes place below him. "He believes the best will rise and will not be shivved [knifed] in the back," says the former editor.
I arrive 15 minutes early to Anna Wintour's office, but an assistant still meets me in the downstairs lobby. "That's what we do," she says, a lovely swirl of blonde hair on her head and two mobile phones in her hands. On 4in heels, she leads me to Wintour's communication director, who walks me down a long hall - a runway - to Wintour's office, which is filled with vases of pastel-coloured roses. The attentiveness is flattering, though I'm aware, having worked for Wintour a decade ago, that it's part of her system of control. I mention to Wintour the forthcoming documentary about her, The September Issue, by RJ Cutler, which follows the production of the largest ever Vogue, the September 2007 issue - 840 pages, 727 of which were ads. I've heard that Wintour didn't feel the movie had enough glamour and tried to change it, without success. "It's RJ's movie," she tells me tersely.
Wintour's portrayal of herself is flawless: the rail-thin arms, the now-blondish bob, and the all-business bearing - she still looks remarkably like Louise Brooks, the silent-movie star, whose image has hung in Newhouse's apartment. Wintour tells me that at Vogue, conversations have evolved with the times - for instance, she now looks at the price tags of clothes before putting them in the magazine. "How many handbags, how many shoes, does a woman need?" she asks. It's a nod to the times, not insincere but not hugely significant either. Vogue can't not be Vogue; that's crazy. "We stand for a certain world," she says. "Women want to have pretty clothes. I mean, it's a question of self-respect, too." Vogue is at heart an unchangeable and, in that, an optimistic venture. Wintour tells me about Ralph Lauren's new collection of watches, which inspires her. They cost more, but they will last. "He wants to be part of the culture, and I feel the same way about Vogue: I want Vogue to be there, part of the culture," she says.
