Autumn of the Moguls: My Misadventures with the Titans, Poseurs, and Money Guys who Mastered and Messed Up Big Media

3

LUNCH

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.”

“Everything? Beyond AOL Time Warner?”

“Certainly Disney and Vivendi are totally fucked.”

“Messier,” said Battelle, naming the Vivendi chairman, “is on board to speak at the conference.”

“Really?” Messier was surely doomed, yet I was impressed that they had gotten him. I had been wanting to meet him. He was even more interesting, I thought, a greater “get” because he was out there in free fall.

“And Viacom is obviously an armed camp and can’t last after Sumner—” Sumner Redstone, Viacom’s 79-year-old chairman and controlling shareholder, was in a standoff with his handpicked successor, Mel Karmazin. “The same thing for News Corp.—it’s not a company that makes any sense whatsoever without Murdoch.”

This hypothesis—predicting the inevitable collapse of the five megamedia-opolises which dominated the industry—was as workable a theme as any.

It was 1914 in Europe.

“What about Bertelsmann?”

“Totally fucked.”

It was some measure of both the peculiar nature and commonplace self-loathing of the media business that you could hold an industry conference and be relatively nonchalant about proposing that the industry was going to implode. On the other hand, it was part of the conceit here that this was a kind of true congress, at which representatives would converge and we would discuss the future of media nations.

“Can we interest you? Who would you like to do? If you did a one-on-one, an interview on stage, who would you like to do?”

It was a time to grab a big enchilada. It was certainly no time to be modest. There weren’t that many enchiladas.

It was Diller or Murdoch.

Because more mystery attended them, more cult of personality, more secret of success, more mogul history, the interviews with Murdoch and Diller would be the big draws of the conference. What’s more, if you could do it right, cannily and subtly, and have them reveal themselves—that would be a score.

Their existence, it seemed to me, had never been adequately explained. Murdoch certainly had held more power longer than anyone else—from his arrival in the U.S. in 1976 to now, he had just kept growing, just kept becoming more and more significant. As for Diller, he may just have defied more conventions of power than anyone else. And it often struck me he was doing this with a certain humor or irony, which might be the ultimate defiance of the power convention.

“If I could face either Diller or Murdoch I would certainly be interested—definitely count me in.”

4

THE POWERS THAT BE

Possibly, I’ve thought, I’m something like an old-time Washington columnist—Drew Pearson, James Reston, even Walter Lippmann—in this new kind of ultimate power scene.

They dealt with matters of state and with the egos and idiosyncrasies of statesmen. I deal with the consolidation of the global media’s power and with the strange and compelling men who control much of the world’s information supply. Lippmann’s interest in Bernard Baruch might be, with a little critical interpretation, not all that different from my interest in Barry Diller.

After all, the media has replaced politics. The media is the root of consensus; it’s the organizational motor of society, now that media demographics define us; it’s the place you go if you have a cause, or a gripe, or desire for reform. It’s a great patronage machine too; loyalists and courtiers and suck-ups are rewarded with immensely valuable publicity. The media, surely, is a more influential force in our lives and in the world’s changing beliefs than politics or government ever was. Certainly, more people participate in the media than ever participated in democratic politics or government. Media is the currency of our time—the less access you have, the poorer and less successful you are. Likewise, the highest order of power and prestige is to be in the media yourself, or to control people’s access to it; people may say they hate the media, but just let their mothers see them on television. Hence, moguls became the political barons of the age. And we, the mogul underlings, became the officials and ward heelers and apparatchiks and bureaucrats of the new communications-technology complex that runs the nation.

Media has become not just the political system but the biggest industry too (a convergence which, like fascism before it, has been most comically demonstrated in Italy, where the head of state is also the head of the country’s media monopoly).

It is almost impossible to find a business that does not see itself as in some part a media business. In a transformation of vast and meretricious proportions, everybody plunged into the media game. Recognition, connection, meaning, transcendence, was something sought by even the dullest men.

Westinghouse became CBS; France’s biggest water company got reborn as a media megalopolis; GM enjoyed a period as the nation’s major television satellite company; Microsoft again and again lost billions trying to develop media savvy. And GE’s flagship business moved from lightbulbs to NBC.

You even had media companies creating other media companies to promote their core media company. The more media you owned, the more you could promote the media you owned. (Disastrously, Disney and Miramax created Talk magazine, for a time rationalizing their investment as a marketing instrument for the companies’ movies and executives.) Indeed, the modern notion of brand is really about access to media rather than the older notion of brand, which was about habit and dependability.

Every American knows the secret of success: more media. The more media, the more recognition, the more value, the more power, the more influence—the greater claim on, well, the media.

I don’t believe any greater power has ever existed.

So I began to think it could be for me just like it was for Lippmann in Washington during the thirties and forties, observing the transformation of the U.S. into the world’s great consolidated megapower.

Of course, I was no Lippmann. And I wasn’t the only one in the media business who had a clearly nagging sense of disappointment, of being less than the circumstances ought to have made us.

As big as the media got, as central as it had become to everyone’s dreams, almost nobody took it very seriously. In fact, the bigger it got, the less seriously it was taken—even though one of the reasons it got big was precisely so that it would be taken seriously.

Jerry Levin may have thought that the creation of the AOL Time Warner monolith would see him became a great man, a creator of worlds. But, as was apparent to all but the people closest to it, Time Inc., a company which used to be reasonably well thought of, became sillier and sillier as it grew larger and larger in its successive incarnations.

No matter how big media companies became, they just could not transform themselves into stately, or even manly, enterprises.

Politics and government, even though they are explicitly about power, have, or at least used to have, a carefully developed rationale for the need for power—they are, in a sense, about that rationale.

The media isn’t so remote—isn’t so Waspy. In the media business, everybody’s motivations are clear. Every aspect of the enterprise—from the back office side to the talent side to the news side—is about achieving notoriety. The media is, in fact, in the business of being noticed by the media.

The more insecure and narcissistic you are, the better equipped you are to rise in the hierarchy. And because there is no limit to insecurity and narcissism, the hierarchies are always being remade.

Let’s say it: The media business at its most exalted level attracts emotionally needy, attention-demanding, nerdy guys. And worse, unlike a former generation of media people, who reveled in their personal excesses, the present generation is uptight about its desperate desires.

But, in fact, they’re here because they’re dissatisfied with being just business guys. They aren’t, or don’t feel they are, temperamentally suited to just counting stuff. In fact, the media suits who are always derided as just being bean counters, don’t, in fact, count beans so well. They have quixotically higher ambitions for themselves.

But they’re not good-looking or funny enough or imaginative enough to be the talent either. They’re stuck in the middle ground: They’re not the talent, but they can’t stand to be so far from the talent that there is no chance for the spotlight to ever hit them.

So they puff up their businessman mission.

Media business talk is among the most serious business talk there is. It’s all about being a serious person—a visionary businessman.

No sane person (at least no sane person not on a mogul’s payroll) who has ever sat down with one or another of the halfwit overlords of the feudal media states and listened to the rationalizations for the twenty-year rise of the media cartel system has ever had any idea what these people are talking about. The patter—about content and distribution and scale and outlets and platforms—masks wild personal needs.

I can’t do justice to the true asynchronous pitch of halfwit-overlord talk. But I think I can say what they are actually trying to say—which, even if they could say it properly, would still be ridiculous. Also, I think I can analyze why they have so much trouble saying it clearly.

At the root of the blather are some basic case-study-type business principles. Great industries are built on the concept of commoditization. You take something expensive and by making lots of the same thing you make it cheaper, and, through a larger distribution system, you make it more widely available. Cars, for instance—like the Model T.

Now, part of the premise here is that the thing you’re selling, because of the more efficient standardized process you’re using to create it, becomes more and more like the thing everyone else is selling, a mass-produced, unspecialized product. And therefore, you as the business guy—the person who knows how to do things more efficiently than the next guy—become all the more valuable to the process.

The media, like all other advanced industries, was going to begin trafficking in commodities. Content was going to become commodified. Therefore, gaining the business advantage was going to be about how the organization could most efficiently create the product and bring it to market. It was going to be about management.

Plus, it was going to be about value. Or value added. When you commodify something you devalue it, but if you manage to convince people (using, of course, the media) that your cheap-shit commodity is the better cheap-shit commodity, then you’ve won their hearts and minds. In a world where everything is the same because everything has been commodified, the only way to distinguish what you sell from what everyone else sells is to create certain neural stimulators that make buyers think it’s different. This is called brand.

There’s a precious irony here. The value of the media used to be that it could create that illusion of difference, that value distinction, for a whole range of products—from soap to cars to nail polish. But now media people were saying, Why don’t we use the power of the media to create the illusion of difference for mass-produced media! Why should we give somebody else the advantage that we own? Damn! Accordingly, as the media commoditized and devalued itself, and then turned around and overhyped itself, this made it increasingly difficult to create illusion and distinction for the products and producers (the soap and cars and nail polish) that were paying the bills.