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Media was a financing game. Media was like real estate.
One asset was meant to mortgage another.
The more you mortgaged, the more you could mortgage.
The more deals you did, the more deals you could do.
It had been said before: If you borrow a little, the bank owns you; borrow a lot and you own the bank.
This required a head for numbers and hubris too—somebody with a big ego who could count. (Although there were many failed instances of men who tried to step up merely on the basis of hubris.)
Such men became the instruments for the creation of vast companies that were—sometimes to a fully realized degree, other times frustratingly falling short of their radical idea—not really companies at all, not collegial enterprises, not thematic expressions, not coherent functions, but extreme reflections of themselves and of their ability to do deals.
Simply, moguls led media companies. If you didn’t have a good mogul, you didn’t have a good media company.
The entire Darwinian process of the media business was not about the winnowing out and promotion of good media, or good companies, but the natural selection of good moguls.
And the whole game was the rise and fall of these sui generis, savantlike beings—around them, you might argue, the business itself became something of an afterthought.
And so, in the nineties, there was the Time and Warner merger. Then there was the deal under which—to hold down the massive debt incurred from the Time and Warner deal—a piece of Time Warner’s entertainment and cable companies was sold to John Malone, another of the media business’ great lousy-deal makers. Then CNN was acquired (ruining that company). And along the way there were hundreds of other transactions, bigger and smaller. Then, on January 10, 2000, Time Warner announced it was merging with AOL. (Days before the announcement, I was flipping channels and paused for a moment on a CNN show that had on its panel Jerry Levin, Isaacson, media and culture commentator Kurt Andersen—also a former Timer—and the New Yorker’s mogul-fanzine writer Ken Auletta, talking about the future of the media. Suddenly, in the discussion, Levin, who probably knew he was soon to announce the largest merger in history, started to talk about governments‘ fading and some new sort of corporate city-states’ rising and how the world would be mediated in some vaguely sci-fi-ish New Agey Rollerball digital way.)
The Time Ivy Leaguers (grown weary and depressed through the nineties), the Warner Hollywood heavies (many of them alter cockers now), and the ever-more-furious Ted Turner were married to some suburban database hucksters from Dulles, Virginia.
There was certainly no sense in the auditorium that this was the last merger. That this deal might define a level of overreach and prompt a turnaround.
After all, deals had always gone wrong, and we all still had jobs.
But, in fact, no deal had ever gone wrong like the AOL—Time Warner deal was in short order going to go wrong. This would be the worst deal ever made, defining not just a level of bad deal making, or of inimical corporate cultures, but of the profound lack of science in any deal. Not just a tissue rejection, but a whole set of doctors who had no idea what they were doing. Forevermore, in every media deal, this would have to be an operative question: Do they know what they are doing? Do they know what they are talking about? What planet are they on? And what do they smoke there?
Nobody knew it yet, but we had commenced a new phase, a whole new era, of resistance and revision.
January 10, 2000, was the beginning of the end.
Book ONE (#ulink_cd6e64d0-8dc8-5a2c-beab-2e2f2ce883b6)
1 (#ulink_b49e64b0-e8f9-599d-99e7-87fd05d32c19)
THE COMEDY (#ulink_b49e64b0-e8f9-599d-99e7-87fd05d32c19)
The media business is collapsing. The structure is caving in, like a monarchy, or colonial rule, or communism.
The handful of companies that control the consciousness of our time are trembling and heaving, about to fall victim to internal weakness and external obsolescence.
If by the spring of 2002, this seemed obvious to many logically minded people, what logic did not account for were the moves and countermoves, as well as the pure denial, that delayed the inevitable end. Logic was up against the kind of powerful men, progressive business theories, public relations resources, and mountains of financial analysis—not to mention lots of charm and brutishness—that make most reporters and columnists end up believing that the moguls and their henchmen who run these businesses really do know what they’re doing and that the next big deal is the big deal that will bring about a perfectly realized, synergistic business condition.
Now, it is not just spin and spreadsheets that obfuscate the real predicament of these colossuses, but the media culture itself. The media, like all social and political systems, works on its own behalf. The social reality—to be a player in the media is to be among the most powerful people of the age—belies a contrary business reality, that the business barely supports itself.
We are in a novel of manners—the pretense is the thing.
Therefore, to tell the story of the media, you have to tell the story of the rituals and conceits and behavioral norms and notions of propriety that hold it up.
Instead of a purposeful business story, it should be something more like a drawing room comedy—not a story about corporate success and failure as much as one about individual need and weakness and, of course, opportunism.
How to reduce such vast companies and so many divergent players to a small stage? How to bring such outsized men with their praetorian retinues into the same room?
The task was to find these people in their element, to move among them seamlessly. To be of them—but not employed by them (or, even worse, sucked up to by them—because their charm is not ordinary charm).
How to find the functional equivalent of a weekend at an English country house with a representative set of mogul kingpins as the guests?
Indeed, if business is the center of the modern world, which most certainly it is, then we have to find the dramatic context in which to reveal its true character.
Let us wait for such an opportunity.
2 (#ulink_c806cf81-ce9e-5725-8152-22b5aa80746a)
MY TABLE (#ulink_c806cf81-ce9e-5725-8152-22b5aa80746a)
In the spring of 2002—in the year of the autumn in question—I received an official, even ceremonious, invitation to have lunch with two journalists I knew from the Internet years (already sounding like some druggy past, or a best-forgotten unpopular war). They had a proposal to discuss. We want to bounce something off of you, one of them said in an email.
And so we met at Michael’s. To have lunch at Michael’s seemed specifically part of their point here.
You step into the door on West 55th Street, in a building once owned by the Rockefellers, and get a greeting from Michael himself (when he’s in from the Coast—Michael’s has a sister restaurant in Santa Monica), in brilliantined hair (recently he’s been sporting a new floppy cut), or from one of the oddly nurturing (“You look great today”) front-desk people. Then, from the top of the few steps leading down to the spacious dining room with good art and many flowers, you see everybody else in the media business who wants to be seen.
I have a table. It’s table No. 5, which is a very good table very near the front of the room. Its sight lines go directly to the entryway, and its back is secured by the east wall (in view of table No. 1 in the bay with Caroline Kennedy playing with her hair or Mick Jagger drumming his fingers or Bill Clinton monologizing his luncheon companions). Among the things I have never expected or wanted to achieve is a table of my own (like Winchell at the Stork Club). Still, this takes nothing away from the satisfaction of having gained a contested piece of turf. (There is a menacing back room at Michael’s where faceless people are led every day, never to emerge.)
Before Michael’s was Michael’s, it was the Italian Pavilion, which in a former heyday of media life had a serious following among advertising and network types. My father was in the agency business and once took me to lunch here and pointed out Bill Paley, the chairman of CBS and the most powerful and elegant man then alive.
I think this is part of the Michael’s attraction: It recalls the other, more salubrious, three-martini era (occasionally, someone will even have a martini at Michael’s), when media was the easiest game in town, when the world was made up of a passive audience and eager advertisers, when the money flowed like gin—as opposed to now, with media being a tortured, hardscrabble affair. A bleak, unpromising, Darwinian struggle.
I sometimes think this is part of the running joke. When you’re making a lunch date and say to someone, “Michael’s?”—they’re in on it. The joke is that all these media bigs show up for lunch and pretend everything is just fine and still supporting these incredibly expensive meals, while waiting for the person at the next table to break down in tears (at any given moment, everyone knows who will likely be crying next).
In other establishments like this—the Four Seasons, for instance—there’s a certain sort of pretense. People in a gated community pretend that they live the lives of people outside the gated community, or pretend the gated area is normal life.
But Michael’s isn’t like that. Everybody is open about being on the inside. It’s like a prison yard.
We’ve crossed the existential Rubicon from social and economic anxiety to an oddly pleasurable self-loathing.
If there once was a media Eden, we are its wastrel and prodigal children with bad work ethics who messed it up and were cast out of the garden. In another sense, we are just unfortunate children, who, through no fault of our own, inherited overplanted fields and poisoned air and changing weather conditions. Whatever.
I have another metaphor, which is Vichy. This makes Michael’s a kind of Rick’s Café Americain.
Pushing this metaphor, the media business, through this last twenty years, has become occupied territory.
The media business used to be run by insiders. People who grew up in those businesses, and people, who by virtue of a certain New York-ism were of a family. But then outsiders, not-of-our-class outsiders, took over.
In a twenty-year period, virtually every media company and every sector of the media industry—book, newspapers, magazines, radio, television, movies, music—came to be controlled by people from outside the clan.
The mogul invasion began—not just your usual business types, but a whole new class of rougher, ruder, preternaturally cunning businesspeople.
A sense of insider resentment or snobbishness or rebelliousness would occasionally express itself. But the stronger sensation was clearly a desire to adapt. Resistance in this situation, where economic ownership passes from one regime to another, is, strangely, almost unknown. Ownership is granted a kind of moral standing. There is no model for saying we will not submit to capital. (When Rupert Murdoch bought New York magazine in 1977, the staff walked out—but that really may be the last time there was clear resistance, and, of course, it was pointless.) It isn’t like, for instance, France. Even though these are cultural industries, you can’t talk about cultural patrimony—or a cultural exception. Although there have been federal rules that regulate exactly this, that notion—that there is something here that transcends the marketplace—that this is a special and fragile area, seemed feeble and pantywaist. For a while book people said it, but then nobody said it anymore.
The world is as it is. The idea of having no place in it became the scariest thing. (We all knew people, too, who came to have no place in it—from people at the Village Voice, to correspondents in a network’s foreign bureaus, to old New Yorker writers—who fell outside a sense of economic with-it-ness. Indeed, there are long mastheads of the missing.)
Therefore, we became collaborators: the quisling media.
Collaboration is, of course, a complicated emotional predicament, in which you often come to root against yourself—root for our own ruin. That’s the Michael’s patois. Who is going down. Who is fucking up. Whose ridiculousness will finally be exposed.
It is this self-consciousness and self-loathing that forms not only the subtext of Michael’s conversation (this is a highly verbal and analytic bunch) but the subtext of the media’s view of the media itself.
We are all here every day working to chip away at whatever is left holding up this insupportable business.
Which is why lunch is so satisfying.
3 (#ulink_e160bb25-da12-5280-b7de-aa9311ff863a)
LUNCH (#ulink_e160bb25-da12-5280-b7de-aa9311ff863a)
NOW, my lunch companions that spring afternoon were both accomplished men—ambitious, high-end achievers who had become significant figures of the great boom.
They had transformed themselves from striving hacks into men of wealth and affairs. They were not just journalists, but had become players in the media business, working the levers of association and finance and business theory.
So of course when they unexpectedly faltered in their transformation—when the reinvention seemed to be reduced to mere overreaching—a certain degree of pathos and Sammy Glicksterism quickly attached to them.
This was, I suspect, part of the reason I was on their lunch list. I, too, had overreached—my Internet business had risen and fallen—but had, surprising nobody more than me, come back from the edge.
The media business—at least if you knew how to work the media business—turned out to be regenerative. The notoriety that attached to you going down could become, with a little craft, the added notoriety that was needed to take you back up.
John Heilemann, a journeyman magazine writer who had gotten himself a million-dollar advance for his first book, and John Battelle, who a few years after graduating from journalism school had become the CEO of a multimillion-dollar publishing company, were now just two unemployed guys in the middle of a nagging recession in more or less urgent need of a paycheck.
At the same time, they were, I didn’t doubt, planning their rehabilitation and resurgence.
Lunch with me, I was not displeased to sense, was part of their plan.
Heilemann was the more forceful of the two, although, interestingly, the more dependent—he needed Battelle to be the business guy, the feet-on-the-floor guy. Heilemann was the showman.
He was major-sport-athlete size—although he obviously wasn’t an athlete—with a stud and two hoops in his left ear. He seemed like something of a sight gag: Too big to be smart, too big to need to be smart. Like a blond bombshell in kludgy glasses.
He’d already had, by the age of 30, an impressive journalism career, first at the Economist, then at the New Yorker, and then at Wired magazine, writing about media, politics, and technology—but all the time seeming way too large for those jobs. Those were for intelligent scriveners, whereas Heilemann was taking his measure not against other writers, but against the big men he was writing about.
In 1997, as the decibel level of the great boom had unmistakably begun to build, Heilemann wrote a profile of John Doerr, the greatest of the Silicon Valley venture capitalists, for the New Yorker. It was one of the first formal introductions of Doerr and of the Valley financial phenomenon (“the greatest legal creation of wealth in history,” in Doerr’s famous, and regrettable, phrase) to the East Coast audience. On the basis of the Doerr profile, Heilemann had gotten his million-dollar advance to write the story of Silicon Valley. Heilemann promptly moved to San Francisco and almost immediately became a prince of the Valley himself, a celebrity second only to the highest levels of Valley celebrities themselves—indeed, he courted and was in turn courted by those same celebrities, famously, ostentatiously, consorting with Doerr and cohorts up and down the Valley.
Once, during the boom, at a party in San Francisco—and during this time everything was a party in San Francisco—Heilemann was telling a small group of people, confidentially, that he had just met with Jim Clarke, the co-founder of Netscape, who had confided something startling to him. Should he take Clarke seriously? Heilemann was wondering aloud. I, who had already failed as an Internet entrepreneur, said obviously not. Heilemann, from his great height, said, with what I remember as quite impressive scorn, that he was certainly inclined to give a man who had founded two billion-dollar companies the benefit of the doubt.
I’d been reduced to a sour-grapes sort, and Heilemann elevated to part of the new, muscular, elite corps of technology intellects—and for several years we didn’t like each other very much.
But then the boom ended (without Heilemann having finished his book—indeed, Heilemann’s lack of writing had become legendary too) and since then there had been no reason for us not to get along. It was possible that some of the same kind of credit that Heilemann awarded Clarke for founding two billion-dollar companies now accrued to me for getting out (even if by failure) of the technology business before the bust.
If Heilemann was too large and imposing to be a mere journalist, his cohort Battelle—Heilemann and Battelle were often billed as a Stan and Ollie or Lewis and Martin combo in Silicon Valley—was too handsome. He was distracted, it sometimes seemed, in the particular way of a too-handsome person—concentrating on people looking at him, rather than concentrating on other people.
Partly because of his distraction, and his failure to ever make eye contact, I had no real insight into whether he was secretly thoughtful or genuinely obtuse. His pure momentum, the imperviousness of the way he moved ever forward, might mean there was another dimension here—or not.
If there was anyone who had been close to achieving a version of professional perfection, even in an era when so many people had been close to achieving that, it was Battelle.
He had lost his no-hitter on the last at-bat.
He’d come out of journalism school at Berkeley in the early nineties to become the number two on the launch of Wired magazine. After a period of wild success, when Wired was thought to be worth many hundreds of millions of dollars and Battelle himself worth various millions, he had then started the Industry Standard, a business magazine about the Internet, promoting himself from mere editorial type to CEO and publisher. I cannot recall anyone initially thinking the magazine had any promise. (I briefly wrote a column for the magazine, while at the same time thinking it had no promise—and figuring that, as soon as I could, I had better find something else.) But the Standard promptly became the most successful magazine of all time in the quickest amount of time, before it, too, crashed—with Battelle being arguably responsible for both its great success and inevitable failure.
Heilemann and Battelle were badly beaten up—but standing. Their wounds contributed to a certain dashingness (a lasting stiffness in the leg, and hint of a limp).
At any rate, here they were, both of them fully aware that everyone else was aware of their hubris and fall, formally calling on me, someone they had reason to believe might be taking some pleasure in their circumstances.
Heilemann began the specific business presentation.
Heilemann is an inarticulate monologist. He can’t stop talking, can’t find a clear way to an end point. He is always restating. There’s a constant quest for synonyms, for adjectives, for new ways to emphasize. It’s a form of buildup, of preface, of drumroll:
He and Battelle were going to hold a conference.
They had together staged some of the most grandiose gatherings of the technology boom, and now… drums… they were back, planning the biggest, the best, the mother of all media conferences. The greatest meeting of media moguls and bigshots ever!
It was nearly Barnum-esque in the telling.
Now, I have been to so many conferences—as many as twelve a year for as much as fifteen years—and there have been so many more that I have managed to avoid going to (while conferences were built on the idea of exclusivity, their sheer numbers made it really hard to make the exclusivity argument anymore—although, of course, conference organizers did), that I was not, at that moment with Heilemann and Battelle, thinking the conference, this conference, might be the perfect setting for my weekend of media moguls.
Instead, I was thinking, Not another fucking conference.
Of course, I knew what was in it for Battelle and Heilemann.
The money could be very good. In the boom years, you could do four or five or six hundred people at a conference like this, for three or four or five thousand dollars a head, with your talent, your presenters, your headliners even, getting nothing whatsoever—which was, I knew, the deal they were going to cut with me (the economic principle was that participants benefited from the same association that everyone else benefited from, that a good conference supplied new and valuable connections to everyone who went). Indeed, if you got a conference going, got on people’s schedules, a once-or-twice-a-year sort of thing, you had a sure multimillion-dollar annuity.
What’s more, there was an opening in the market niche. For twelve years, the TED conference (technology, entertainment, design), held in Monterey, California, had been a vital date on the media-technology-communications complex calendar. It was the big one, regularly attracting nearly a thousand people, at $4,000 a head, with sponsors covering many of the underlying costs—and a staff, functionally, of one. Richard Saul Wurman, a Sydney Green-street figure, ran the conference and every year collected the $4 million or so; the educated guess was that his profit margin might have been as high as 75 or 80 percent. But now he had sold the conference—and whether or not the new owners could do it as well was far from clear. If you could take that place, you could build yourself a powerful base of operations in the media world.
This is where Battelle stepped in. He explained the money part.
It occurred to me that that’s what Battelle did now. That this was perhaps all that interested him: the deal. He knew, better than most—as well as any banker, or mogul—that you lived and died on the basis of the deal. The deal was the force.
The deal was this: Quadrangle, a New York—based investment fund specializing in the media industry, was backing the conference, to be called Foursquare, which would be a partnership among Heilemann and Battelle and Quadrangle. And while, ideally, this was to be a moneymaking enterprise, Quadrangle would absorb any deficit. (Of course, I knew that if Quadrangle was accepting the losses, it was a far from equal partnership, if it was a partnership at all.) What’s more, Quadrangle was contributing its influence to attract the desirable level of speakers and participants.
This made sense. If no one at all paid to attend, if everyone became an invited guest, this was still an acceptable marketing cost for Quadrangle. Everyone they’d ever want to do business with would be a captive audience for three days. The Quadrangle guys would be able to strut their stuff.
But lest this appear to be just a marketing ploy, bankers sucking up to prospective clients, Battelle argued the opposite point:
“This isn’t just schmooze. There’ll be schmooze, but this is an editorially driven conference. We want to tell a story. What we want is for journalists to be interviewing and questioning the seniormost executives in the industry. So this isn’t just guys, like in most conferences, giving sales pitches and the usual patter, this is people with information being questioned by people who know how to get information.”
This is the pitch, I realized, they had sold the Quadrangle people. It was a serious affair—a serious affair with money.
“So what do you think,” Heilemann asked, “is going to happen? Go wide. What are the trends? What’s the—”
“I think everything is going to collapse.”
