If you read Wired magazine, The New Yorker, or Vanity Fair, you’re reading material produced by a company named Advance Publications. And if you read Parade, the largest circulation Sunday supplement magazine in the U.S., or Golf Digest, or Glamour, these magazines are also published by Advance – as are Vogue, The Sporting News, Architectural Digest, and several others. Advance owns newspapers as well, found in more than twenty-five American cities, including Newark, New Jersey; Cleveland, Ohio; Portland, Oregon; and Syracuse, New York. Another 40 weekly titles are published by Advance through its American City Business Journals. Cable television outlets owned by Advance serve 2.4 million customers in Florida, California, Michigan, Indiana and Alabama. On the web, Advance Internet operates more than 100 websites, most of which serve and extend the company’s print and cable operations. Reddit.com, the popular user-generated “social news” website, is one of Advance Internet’s properties.
Advance Publications was formed and is owned by the Newhouse family of Long Island, New York. In recent years the Newhouse /Advance empire has ranked among the 50 largest private companies in the U.S. The company dates to the early 1920s, and grew to fame in the heyday of the newspaper business when its founder, Samuel I. Newhouse – “Sam” – steadily went about acquiring all manner of America newspapers during the 1950s, 1960s and 1970s. Today, as of September 2012, Advance Publications is run at the corporate level by Sam’s two sons — S.I. Newhouse, Jr. (84), known as “Si,” and brother Donald Newhouse (81). Assorted other Newhouse family members assist in the management of various divisions and subsidiaries. Si and Donald will soon turn over control of the company to the next generation of Newhouse executives.
Yet, some say the Newhouse empire is “yesterday’s media company,” and will succumb to the albatross and high-cost of print in a digital age. Others believe the Newhouse empire will not only survive, but will thrive, continuing to be a dominant cultural force and contemporary story teller, setting trends in fashion, literature, and style as it goes. Whatever the outcome, there is 90 years of rich history here – a publishing and cultural time capsule of sorts, reflecting changes in publishing and media generally over that period. What follows is a narrative and visual look at some of that Newhouse history, and by extension, media and publishing history as well. First, Sam Newhouse, the founding father, circa 1920s.
Having left school at about the age of 13 due to his family’s poverty, Samuel I. Newhouse landed a job with a local judge in Bayonne, New Jersey. There, he was given the task of minding a local newspaper named the Bayonne Times which his employer had acquired in payment for a bad debt. Newhouse succeeded in making the paper profitable, and along the way, attended evening classes at the New Jersey Law School at Newark, receiving a degree in 1916. Newhouse was 21 by this time, and his boss, Judge Lazarus, paid him $30,000 a year, and gave him a 25 percent share the Bayonne Times. In 1922, with Judge Lazarus, Newhouse purchased the Staten Island Advance, one of the first newspapers he acquired – the property from which “Advance Publications” got its name. When Judge Lazarus died in 1924, Newhouse acquired the rest of the Staten Island Advance. He then focused on the idea of expanding newsstands in the region as a way to grow his newspaper – newsstands at the St. George Ferry Terminal on Staten Island and others throughout Manhattan, at LaGuardia and Newark airports, and at the Port Authority Bus Terminal in New York city, which became the world’s largest and most lucrative newsstand. Then came other newspaper acquisitions: the Long Island Press in 1932; the Newark Star Ledger in 1933, the long Island Star Journal in 1938; the Syracuse Journal in 1939; the Syracuse Herald-Standard in 1941; the Jersey Journal in 1945; and the Harrisburg Patriot of Pennsylvania in 1948.Newhouse soon moved beyond the Northeast in prospecting for additional newspapers to buy. In 1950, he purchased The Oregonian for $5.6 million, then the largest newspaper sale ever. Five years later, in 1955, Newhouse purchased St. Louis Globe-Democrat for $6.5 million, another record. In the same year in Alabama he acquired the Birmingham News and Huntsville Times, along with one TV property and 2 radio stations for a combined $18.7 million. This deal set another record, surpassing Cyrus McCormick’s $18 million purchase of The Philadelphia Inquirer in 1930.
In buying up newspapers, Newhouse adopted a low-key, non-threatening approach with the companies acquired. He usually kept the existing management and editors and was reluctant to upset the status quo, believing the papers should remain local institutions run by people in those communities.But Newhouse also expanded his growing publishing business with new magazine properties. By 1959, he acquired the Condé Nast magazine group, which then included seven magazines – Vogue, Glamour, Bride, and House & Garden among them. At the time, these magazines had sales in the neighborhood of $20 million a year. Added to this group in August 1959 were more magazines through another Newhouse acquisition – this time, buying up Street & Smith Publications which held titles such as Mademoiselle magazine and several sports annuals, including: College Football, Pro Football, Baseball, Pro Basketball, and College/Prep Basketball. In some cases, Newhouse took the less viable magazines in one company and rolled them into the better version in another company, often helping his bottom line. The Condé Nast group had been losing money when Newhouse acquired it, but within one year under his management it turned a $1.6 million profit. Within the Newhouse family, meanwhile, Sam’s sons were chosen to help run the business – S. I., Jr. ran the Condé Nast group, while younger brother Donald managed the newspapers and broadcasting in Newark, NJ.
The wealth of the Newhouse family at this point approached $200 million. Some began wondering exactly how Newhouse was generating the funds for his deals. A few even speculated that he was laundering money, using his newspapers as a front for a local mob organization’s illegal booze operations during prohibition. But it wasn’t that at all. Newhouse had just hired smart attorneys and accountants who figured out ways to pay the absolute least amount of corporate taxes while costing every expense they could and depreciating assets to the limit. They also structured each newspaper as its own operation, each attributed its own separate profits, avoiding a much higher commulative total under one, single-owned Newhouse entity. There was also a Newhouse Foundation created early on as an additional tax dodge, which some believe was also used to help finance the $18 million deal for the Alabama newspapers in 1955.
The 1960sIn the 1960s, Sam Newhouse continued building his newspaper empire, but he didn’t appear to use his growing publication power in the political arena. The Newhouse newspapers appeared to follow their own political inclinations, and were not told to endorse specific candidates. Newhouse himself was a registered Democrat, and he voted for John F. Kennedy in the 1960 presidential race. Eight of the Newhouse newspapers, however, endorsed Nixon. In New York, Mr. Newhouse favored Republican Nelson Rockefeller for governor.
Back on the newspaper acquisition trail, Newhouse acquired the Oregon Journal in 1961 for $8 million. By then he owned 16 newspapers. But in 1962, having failed to buy the Houston Post after he had made a generous offer to that paper’s owner — Ms. Hobby, who refused to sell — Newhouse was still itching to buy a paper, any paper. So he telephoned a newspaper broker named Allen Kander in Washington, D.C. Newhouse, then continuing his travels in the South, asked Kander where he might buy a newspaper in the region. Try New Orleans, Kander suggested. Newhouse did. Two weeks later, he set another record, paying $42 million for both of New Orleans’ newspapers: the morning Times-Picayune and its evening companion, the States-Item. The larger of these two, the Times Picayune, then had a daily circulation in excess of 195,000, with more than 300,000 sold on Sundays. The States-Item was an evening paper with a circulation of about 163,000.The Louisiana deals that Newhouse had made, not only set a record, but also sent his company into the upper echelons of the newspaper industry. Newhouse by then had collected 19 newspapers with a combined daily and Sunday circulation of 5.7 million. He now owned, in whole or part, more newspapers than anyone else in the U.S. The Scripps Howard organization was right behind him with 18, followed by Hearst newspapers with 13. However, Scripps-Howard and Hearst both had bigger total circulation numbers than did Newhouse. But Newhouse was growing in size, even as Scripps-Howard, Hearst, and most of the U.S. newspaper industry was contracting. And Sam Newhouse appeared to be the better businessman of the bunch, having a special knack for making newspapers profitable. By late July 1962, Sam Newhouse appeared on the cover of Time magazine, depicted with a stream of acquired newspapers behind him, shown generating a flow of cash.
In the fall that year, Newhouse set out again to bag another newspaper. On October 12, 1962, The Wall Street Journal reported that Newhouse was planing to buy The World-Herald newspaper in Omaha, Nebraska. And a few weeks later Newhouse made a $40 million bid for the paper, which appeared to be accepted.However, a local Omaha construction magnate, Peter Kiewit, bid higher at $40.5 million, which the World-Herald board accepted, preferring to keep the paper in local hands. Back in New York, meanwhile, in 1964 Newhouse made the largest gift to Syracuse University by a living donor as the university dedicated its new School of Communications Center, which was named for Samuel Newhouse.
In 1966, Newhouse acquired three newspapers in Springfield, Massachusetts – The Springfield Morning News, The Republican, and The Morning Union – followed by three more in the south; The Mobile Register, The Mobile Press and The Mississippi Press-Register. The following year he set another industry record when he paid $54.2 million for the Cleveland Plain-Dealer.
As he went about his business, Newhouse gained a reputation as a tight-fisted owner and manager known for cost cutting. He also resisted unions and did not pay high salaries to his reporters. Nor did he impose any particular ideology or editorial line on his managers and editors, and for the most past, he maintained political neutrality. Said he in 1968: “My papers have different philosophies, and they’re about as wide apart as they can get. Some are Democratic, some are Republican. I am not going to try to shape their thought.” Many others in the business followed his “hands off” example.
By the mid-1970s, Sam Newhouse, then 80 years old, was still looking for more newspaper properties. In February 1975 he had acquired 25 percent of the stock in the Booth Newspaper group, a chain of eight small newspapers all within 200 miles of Detroit, Michigan. Booth also owned Parade magazine, a popular Sunday supplement. Local newspapers with monopoly positions like those in the Booth chain, were described by one 1975 analyst as offering “practically a licence to print money.” The eight papers – The Grand Rapids Press, The Flint Journal, The Kalamazoo Gazette, The Saginaw News, The Muskegon Chronicle, The Bay City Times, The Ann Arbor News and The Jackson Citizen Press – then had a combined circulation of about 506,000. But Newhouse wasn’t the only party interested in this newspaper group. The Times Mirror Company – then owner of the Los Angeles Times, Newsday, The Dallas Times Herald, and The Orange Coast Daily Pilot – was also interested. In the fall of 1976, Times Mirror made an offer to buy the Booth chain at $40 a share, which was more than double Booth’s stock price at the time. But Newhouse made a counter offer of $47 a share, which the Booth group accepted. In the end, Newhouse gained total ownership of the eight Booth newspapers and Parade magazine for $305 million.The deal was seen in the industry as an investor’s dream, as the eight Booth newspapers were the sole papers in their respective communities, each offering a monopoly source for local advertising. Observed one newspaper analyst at the time: “It has developed over the years that small-to-medium sized newspapers with a monopoly are the Cadillacs of newspaper stocks. These are steady, reliable, profitable businesses and that is practically a licence to print money.”
But in addition to the eight local newspapers, there was also something else. No small part of the deal was Parade magazine. Parade, in fact, gave Newhouse a window into many other newspapers, as it was then one of the leading Sunday supplement inserts – used by some 111 newspapers with a combined circulation of more than 19 million. And under the Newhouse umbrella, Parade would only grow in the years ahead. Elsewhere in the magazine business, in February1979, Newhouse also purchased Gentlemen’s Quarterly from Esquire and rolled it into the Condé Nast magazine group, later renaming it GQ.The Newhouse empire, however, was about to change. In August 1979, at the age of 84, Sam Newhouse passed away. He died of complications following a stroke. At the time of his death, what had begun as a single Long Island newspaper 50 years earlier, had become a nationwide communications empire that included not only newspapers but magazines, radio and television stations, printing companies and delivery services.
By1979, the Newhouse operation held 31 daily newspapers with a total readership of more than 3 million, then the third largest U.S. newspaper chain behind Gannett and Knight-Ridder. With Sam’s passing, his two sons began running the company – S.I., Jr., known as “Si,” would head up the company’s magazine operations, and Donald Newhouse would run the newspapers.
In the 1980s, although no newspapers were acquired, some were consolidated, especially in cities where Newhouse owned both the morning and afternoon papers. In New Orleans, The Times-Picayune was combined with The States-Item. Newhouse had bought both papers in 1962. On June 2, 1980, The States-Item was gone but the surviving paper shared a joint banner using both names. Six years later, The States-Item name was dropped altogether, and the newspaper of New Orleans became The Times-Picayune.
In Portland, Oregon, The Oregon Journal was merged with the Oregonian in 1982. That same year, the Cleveland Press ceased operation. The Newhouse-owned Cleveland Plain-Dealer then became the city’s only daily newspaper. Allegations were made that Newhouse management had paid The Press’ owner to go out of business, and in 1985, a grand jury began an anti-trust investigation into the Newhouse role, but charges were never filed. In other newspaper business, Newhouse also sold the St. Louis Globe-Democrat in 1984.In other ventures, Newhouse scored big when he acquired Random House in 1980, then one of the world’s top book publishers. He bought the premier publisher from RCA for $70 million. Two years later Fawcett Books was acquired from CBS and placed in the Ballantine Books division of Random House. In that deal, Newhouse inherited Fawcett’s mass market paperback list with established authors such as: William Bernhardt, Amanda Cross, Stephen Frey, P. D. James, William X. Kienzle, Anne Perry, Daniel Silva, Peter Straub and Margaret Truman. Fawcett also became the official home of Ballantine’s mass market mystery books program. Later in the 1980s, Fodor’s Travel Guides (1986) and the Crown Publishing Group (1988) would be acquired and rolled into Random House as well.
In 1980 Newhouse also sold five television stations to the Times Mirror Company for $82 million. He sold the stations primarily because his company then held newspapers in those same cities and he feared the government would eventually order the sale on anti-trust grounds. Newhouse used part of the money from that sale to buy up other cable TV systems, and by 1981 or so had over 500,000 cable television subscribers. Forbes magazine around this time observed: “By the most conservative standards, the Newhouse properties are worth well over $1 billion. They are unencumbered by a penny of debt and except for a 49% interest in a paper mill, are 100% owned by the Newhouse family or by trusts they control.”
In the magazine business, meanwhile, the early 1980s at Newhouse were a time of revamping and relaunching some of the company’s acquired properties. Among these was Gentleman’s Quarterly, or GQ, a men’s fashion magazine dating to 1931. At the time Newhouse acquired it, GQ had become known as a gay men’s magazine. But at the Newhouse Condé Nast shop during the early 1980s, the decision was made to give GQ a more masculine focus, as the company wanted to reach a broader market and become a competitor to Esquire. The covers in the early 1980s began featuring male movie stars and athletes, among them, actors such as Jack Nicholson, Mel Gibson, and Harrison Ford and athletes such as Washington Redskins quarterback, Joe Theismann. Advertising pages in the magazine featured male models with admiring females.
In early 1983, Newhouse also made a major move with the re-launch of Vanity Fair as a glossy celebrity magazine focused on literature, the arts, politics and popular culture. Some $10 million was invested in strengthening the magazine editorially. It was also redesinged to give it a new look and a new start, hoping to restore it as the central publication within the Condé Nast group. The first new issue included some 290 pages with a short novel by Gabriel Garcia Márquez, winner of the 1982 Nobel Prize for literature, and also articles by writer Gore Vidal and paleontologist Stephen Jay Gould. Photographer Irving Penn, described as “one of the greatest portrait photographers of the 20th century”, was enlisted in the Vanity Fair re-launch during 1983. Penn, who began shooting for Vogue magazine in 1943, did six successive covers for Vanity Fair in 1983, August through December 1983. Four of those cover shots, which featured celebrity authors and actors, are shown here at right – from top left: novelist Philip Roth, September 1983; writer and playwright Susan Sontag, October 1983; European writer, Francine du Plessix Gray, November 1983; and comedian-in-disguise, Woody Allen, December 1983. A round of reviews followed the Vanity Fair makeover, including some that were sharply negative, as those that came from Time and The New Republic. ”We never believed we were producing a perfect magazine when we relaunched Vanity Fair,” said Si Newhouse at the time. He acknowledged there was much work ahead — “before we get the wonderful, seamless quality a mature magazine has.”
One step to getting Vanity Fair on the right track, Newhouse hoped, was the January 1984 hiring of Tina Brown, the former editor of The Tatler, society magazine in London. Brown, an Oxford University graduate, had given The Tatler a more modern and satirical edge, and it appeared that’s what Newhouse had in mind for Vanity Fair as well. Time would tell.Then in November 1984, Newhouse took another big bite in the magazine industry, spending $25 million to acquire a 17 percent ownership position in the The New Yorker magazine, one of the nation’s most venerable magazines of style and literary excellence, published for some 60 years. By February 1985, Newhouse had acquired the whole company, which then also included a few other magazines.
The acquisition of The New Yorker stunned the publishing world. At the time, many worried for the fate of the magazine’s vaunted literary quality, which showcased some of the finest writers in America, might suffer under the Newhouse cost-conscious management style. An unsigned article published in the magazine during the management change questioned whether the new ownership would result in erosion of The New Yorker’s long tradition of editorial independence. Fears escalated when the long standing editor of some 32 years, William Shawn, was fired by Newhouse. Depsite the concerns, things at The New Yorker continued pretty much as they had, as the magazine’s integrity and quality were not compromised.
In the business world, however, there were those who believed that buying up The New Yorker made no economic sense, as the magazine was seen as “old media” and on the way out – especially as television’s “quick take” and “sound bite” stylistic tendencies began encroaching on the print world. But Si Newhouse was a careful student of the magazine business. In September 1988 he told Geraldine Fabrikant of the New York Times that The New Yorker was then “one of the greatest things in journalism and the most interesting thing I am involved in.” He added: ”People have been convinced that no one is reading any more, so that bringing The New Yorker back is a fascinating challenge,” he said. ”When I study the health of magazines, I study renewal rates,” he explained. ”That tells you whether a magazine is right for its readers. Once you have a good reader base, advertisers invariably follow.” The New Yorker at the time had a renewal rate of 72 percent, which was then 2 points above the industry average.
Vanity Fair, meanwhile, under Tina Brown, faced a make-or-break situation, with 1984 circulation of 200,000 and very little advertising. Rumors circulated that Si Newhouse might decide to take the barely-surviving magazine and fold it into The New Yorker. But under Brown’s direction, Vanity Fair began to show itself in a new way, offering a range of new cover subjects, stories and photography.
Three Vanity Fair cover stories during 1985 are sometimes credited as the turning point. First was the Vanity Fair cover of Ronald and Nancy Reagan dancing in the White House by photographer Harry Benson for the June 1985 issue. Then came the August 1985 cover story of accused murderer Claus von Bulow with his mistress Andrea Reynolds on the cover and in other photos by Helmut Newton of von Bülow and Reynolds in matching leather jackets that made them look, as Reynolds put it, like “S&M people.” And finally, there was Tina Brown’s own cover story on Princess Diana of October 1985 titled “The Mouse that Roared,” which examined how marriage and a public life had changed young Diana, a former preschool teacher. Princess Di was photographed in full House of Windsor regalia for the issue. But perhaps more notably, the Princess Diana story also broke news of the royal couple’s fractured marriage. The issue boosted Vanity Fair newsstand sales by 100,000 copies.The von Bülow and Princess Diana issues set Vanity Fair sales records and helped convince Newhouse to stick with the venture. Vanity Fair’s fortunes generally rose thereafter, as sales began rising, especially on the newsstands, a very good bellweater of consumer acceptance and magazine success. By 1988, Tina Brown was named Magazine Editor of the Year by Advertising Age and Vanity Fair’s advertising pages were on the rise as well. Tina Brown’s Vanity Fair cover subjects continued to reflect leading edge culture, with figures such as Madonna and Michael Jackson featured on issues in the second half of the 1980s. The magazine also used current events to its advantage. “I brought in the news gene,” Tina Brown would later explain to writer Steve Fishman in a 2009 New York magazine interview. “Newhouse came to understand that news was a key to connection to the culture.” News meant buzz, politics, and culture. As New York’s Steve Fishman, would put it: “Brown had an instinct, and an unrestrained affection, for power, and she set about glamorizing 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.”
Si Newhouse, meanwhile was also adding other magazines during the late 1980s. Among these was a magazine that would later become the Condé Nast Traveler, a monthly magazine for affluent readers and travelers that was acquired from American Express as Signature magazine, but was vastly upgraded and relaunched by Newhouse in the fall of 1987 with an infusion of about $40 million. In early 1988, Details magazine was acquired, which was originally a somewhat quirky chronicle of Manhattan’s downtown art and club scene when Newhouse acquired it for $2 million, but was transformed into a young men’s fashion and lifestyle magazine. Later the same year, Woman magazine was acquired, an eight-year-old magazine with a circulation of 525,000. Somewhat less sophisticated than others in the Newhouse / Condé Nast group, Woman would target a newer market segment. Meanwhile, an older but reliable magazine on the newspaper side, Parade, was enjoying a growing readership base. By 1989 the Sunday supplement was included in some 330 newspapers with a circulation of more than 35 million readers. A full-page color ad in Parade at this time would cost its sponsor about $420,000.
Elsewhere in the late-1980s Newhouse empire, Random House in 1988 added Crown Publishing to its growing group of imprints. The IRS about this time filed charges against the Newhouse family, claiming taxes due on the estate of Sam Newhouse. The family had filed an estimated amount of $48 million. The IRS, however, said the amount due was more in the neighborhood of $600 million, plus $300 million more in penalties. However, the courts later found in favor of the Newhouse family. By 1989, Forbes magazine, in its annual listing of the richest Americans, found the Newhouse empire to be worth some $5.2 billion. Fortune magazine estimated Newhouse wealth a bit higher, at $7.7 billion. In any case, by the close of the decade, Newhouse was the nation’s the No. 1 publisher of general books, the third largest magazine publisher, the fourth largest newspaper chain, and one of the top 15 cable TV providers.
Vanity Fair continued to be a pop culture trend-setter in the early 1990s, featuring cutting-edge stories, Hollywood celebrities, and sometimes controversial covers, not the least of which was a nude and very pregnant Demi Moore on the cover of the August 1991 issue. “More Demi Moore,” read the cover tag line, with the featured subject photographed by Annie Leibovitz, as Moore was then seven months pregnant with her daughter. The cover was intended to be “anti- Hollywood” and “anti-glitz,” according to some accounts, and it succeeded in sparking intense controversy and debate, receiving wide media coverage in the process. Other Vanity Fair covers through 1992 featured Hollywood celebrities, rock stars, and enticing cover stories, among them: Jessica Lange in October 1991, Goldie Hawn in March 1992, and Mick Jagger in April 1992.
Vanity Fair’s circulation had jumped to 1.2 million by 1991. Advertising pages were also up in 1991, to about 1,440 pages. Revenues from circulation rose, especially from profitable single-copy sales at $20 million. Vanity Fair was then selling some 55 percent of its copies on the newsstand, well above the industry average of 42 percent. Tina Brown had done so well at Vanity Fair that Si Newhouse decided in July 1992 to make her editor of The New Yorker, hoping to give that magazine a bit of Vanity Fair’s sharper edge. Graydon Carter was hired by Newhouse to replace Brown at Vanity Fair, which continued with engaging cover art, such as the August 1993 issue with Cindy Crawford and k. d. Lang, photographed by Herb Ritts. Vanity Fair stories had cultural and current affairs impact, too. In 1996, journalist Marie Brenner wrote a Vanity Fair exposé on the tobacco industry entitled “The Man Who Knew Too Much,” an article later adapted for the 1999 film, The Insider, with Al Pacino and Russell Crowe.
Beyond Vanity Fair and The New Yorker, the Newhouse enterprise continued to extend its reach in the magazine business. In 1991, it added Allure and others through the 1993 acquisition of Knapp Publications including, Architectural Digest and Bon Appétit. The following year, Newhouse acquired a 25 percent share of Wired, a San Francisco based monthly magazine focusing on new technology and how it affects culture, the economy, and politics. Newhouse had also offered some $500 million in backing to QVC, then in a 1993 bid for Paramount film studios, which QVC later lost to Viacom. On the newspaper side, the American City Business Journals were acquired by Newhouse in 1995 for about $270 million, adding business newspapers in some 40 cities with names such as the Atlanta Business Chronicle, the Cincinnati Business Courier, the Denver Business Journal, and others. Still, newspapers continued to be the cash cow for Newhouse, generating the largest revenue stream for the company through the mid-1990s, usually north of $1.5 billion annually. In cable TV, meanwhile, Newhouse and Time-Warner Cable combined cable systems in a joint venture. That deal brought Newhouse Broadcasting’s 1.4 million subscribers together with Time-Warner systems in New York, North Carolina and Florida at a time when the cable industry was undergoing consolidation in preparation for the battle-to-come with phone companies. Newhouse was also then a part owner of the Discovery cable TV channel.Over at the The New Yorker, meanwhile, Tina Brown broke tradition with her second issue of the magazine – for its October 12, 1992 edition – running a portrait of Malcolm X on the cover, as well as a full-page photograph of the slain black leader inside the magazine. It was the first time in the magazine’s 67-year history that an article had received such treatment. The cover painting was by artist Josh Gosfield, which also featured a background collage of other smaller drawings and photos around the Malcolm portrait, including imagery related to the Los Angeles beating of Rodney King and a smaller photo by Richard Avedon of Malcolm X with Martin Luther King Jr. in 1963. Inside the magazine, there was a related story by Marshall Frady entitled, “The Children of Malcolm.” It was also the first time the cover subject had been related to an article inside the magazine. A New York Daily news story, noting the change, observed: “this is not your father’s New Yorker.”
Inside the magazine, Brown also made changes. She introduced color and photography giving the magazine a more modern layout with less type on each page. There was also more coverage of current events and hot topics, featuring more celebrities and business tycoons. The “Goings on About Town” section included short pieces throughout and a column about Manhattan nightlife. A new letters-to-the-editor page and the addition of authors’ bylines to the “Talk of the Town” section had the effect of making the magazine more personal.
Two Newhouse Books
Felsenthal worked for five years on the Newhouse book, conducting some 430 interviews and producing a volume that offers a vast compendium of facts, quotes, and anecdotes. Her book includes great detail on Si Newhouse’s editorial proclivities and the lavish perks he bestowed on his editorial elite, with former editors and publishers talking candidly about their dealings with Newhouse, who is cast as cold and uncaring by several long-time editors. Still, Felsenthal portrays Newhouse as a businessman who made few mistakes, taking his father’s newspaper company to new heights with successful expansions in book and magazine publishing.
By March 1998, the Newhouse family appeared to be streamlining its operation, and cutting away properties which had underperformed. One of these was the Random House publishing group, which by then included many well known and well respected imprints including: Alfred A. Knopf, Crown Publishing, Ballantine Books, Fawcett Books, Fodor’s, Modern Library, Pantheon Books, Orion, Vintage Books, and others. During its 18 years of ownership, the Newhouse family had expanded Random House from a $200 million-a-year publishing house with no properties overseas to world’s largest English language trade publisher with ports in England and Australia. But like others in the industry, Random House had struggled with heavy returns of unsold titles and marginal profitability. In 1996 it’s profits were generously estimated at $1 million on $1 billion in sales. However, as part of the privately-held Advance Publications empire, and not having to worry about quarter-to-quarter pressures of a publicly-held company, the Newhouse family could and did take the long view with Random House.Some believe Newhouse played a key role in pushing Random to bring on celebrity authors and blockbuster books that would do well in a more entertainment-driven marketplace. Random also went after celebrity authors, and paid them well to write their books with big advances – $2.5 million to former Clinton presidential adviser, Dick Morris; $5 million for Marlon Brando’s autobiography, and more than $6 million for Colin Powell’s autobiography.
Still, in Random House, the Newhouse organization did not find the cross-business opportunities – or “synergies” as some described them – that might have moved between the magazine and book businesses. One Newhouse editor at The New Yorker told the The New York Observer in March 1998: “The idea that The New Yorker has drawn any intellectual sustenance from Random House is ludicrous. There has never been an exchange of ideas and, even in business matters, like first serial rights. Random House has always been as firmly self-interested as the next publisher.” During the 18-year Newhouse tenure, Random House and the book business had changed, and with the web and new retailing patterns, more change was ahead. Si Newhouse and family, some believed, were just more comfortable in the magazine and newspaper business. “Si loves the media business and he loves it for the right reasons,” one publishing source told The Observer. “He genuinely loves owning things that make a contribution to a high level of intellectual discussion. But he is at core a businessman….” By 1997, Si and family had decided to sell Random, but they would not sell it to just anybody; there would have to be a genuine interest in the book business. When German bookseller Bertelsmann approached Newhouse with an interest in the company, negotiations began. Bertelsmann wanted a foothold in the American publishing business, and in the end paid more than $1 billion for Random House – $1.3 billion by one estimate.
“I think Si deserves a lot of credit,” said Thomas Maier, author of the 1994 book, Newhouse, summing up the Newhouse ownership of Random House to New York Times reporter Doreen Carvajal. “He…grew the business through acquisitions and by hiring some terrifically talented people. I think it’s very debatable whether they improved the quality or not. In some ways they did, and in other ways they ended a genteel, writer-oriented era in publishing in favor of a celebrity, media-driven realm. Was that a tide that could be bucked? Probably not.” Newhouse, in Maier’s view, played a key role in pushing Random to bring on more celebrity authors and blockbuster-type books that would do well in a more entertainment-driven marketplace. And that change helped draw in even bigger players like Disney and Murdoch.
In the magazine business, meanwhile, the Newhouse enterprise was still buying. In May 1998, the company acquired full control of Wired magazine, the San Francisco based technology/life style magazine. In 1999, additional magazines were bought from Disney through Fairchild Publications, a company Disney had acquired when it bought Cap Cities /ABC in 1995. Newhouse acquired three magazines in the Disney deal – W, Jane, and Women’s Wear Daily. W and Women’s Wear were fashion magazines, while Jane was oriented to the 18-to-34 year old market. Newhouse reportedly offered $650 million in the Disney/Fairchild magazine deal, outbidding the Hearst Corporation, a big rival in the magazine business. With the three mostly fashion additions, Newhouse now had control of more fashion advertising revenue than any of its rivals — worth hundreds of millions of dollars annually. Covers in these magazines during 1999, for example, featured celebrities such as: Lisa Kudrow, Natalie Portman, Courtney Love, Minnie Driver, Mariah Carey, Claire Danes — with others in that vein continuing through the early 2000s, such as the Gwyneth Paltrow and Liv Tyler covers shown above.
2000s: New WorldThrough the first decade of the new millennium, Newhouse faced something of a new world, with changing technology, and later, tougher economic times. Still, at the beginning of the decade, the Newhouse enterprise continued what it had been doing in the past – acquiring more properties. In July 2000, Newhouse acquired a group of newspapers in New Jersey and Pennsylvania from the Media News Group, including: The Gloucester County Times, Today’s Sunbeam, Bridgeton Evening News – all in New Jersey – and The Express-Times of Easton, Pennsylvania. However, Newhouse also closed down the Syracuse Herald- Journal in 2001.
On the magazine side, there were also additions, as well as a few subtractions. Lucky, a new creation, was launched in December 2000, cast as a shopping guide and style magazine primarily for women. Its articles focused on fashion – what to wear and how to wear it – and each issue featured a spread on some the cover girl’s favorite clothes and trends. Another magazine, Modern Bride, was acquired from Primedia for $52 million in 2002, and fit another slice of the Condé Nast upscale audience. In early 2003, Teen Vogue was launched as a another new Condé Nast magazine with Gwen Stafani on the cover of the first issue. Teen Vogue was basically conceived as a teenage version of Vogue magazine aimed at teenage girls. Focusing on teen fashion and celebrities, with related news and entertainment feature stories, it became a successful new magazine in the Newhouse/Condé Nast stable, soon reaching a circulation of more than one million. At the same time, three other magazines were closed in 2001 – Mademoiselle, Golf World, and Golf Digest. In the Cable TV arena, Advance and AOL/Time-Warner ended their cable partnership in 2002, as Advance changed the name of its cable operations to Bright House. By early 2008, before the economy went south, the Newhouse empire had revenues of more than $7 billion with more than 20,000 employees. The combined worth of Si and Donald Newhouse had been estimated by Forbes a few years earlier at around $15 billion.
Image & Style. Newhouse magazines during the 2000s continued with their celebrity-centric and fashion offerings, as well as their socially-trendy reporting. Vanity Fair had established itself since the 1990s as perhaps the top New York magazine on pop culture, fashion, and current affairs, and continued with that mix of fare through the 2000s. In 2002, for example, it offered a formal portrait of President George W. Bush’s Afghan War Cabinet. In 2005, came some juicy celebrity exclusives – “the big post-prison interview” with diva Martha Stewart in August, followed by the first interview with Jennifer Anniston after her divorce from Brad Pitt in September titled, “The Unsinkable Jennifer Aniston,” with Anniston on the cover. In January 2006, Vanity Fair published a cover feature and interview with Lindsay Lohan.
Hot Covers. Newhouse magazines had generally been edging into more exotic territory with its covers. In fact, during the 1999-2009 period, it ran covers that increasingly showed their female subjects in discreetly- posed nude or near-nude photos. The May 1999 issue of W magazine had Cindy Crawford in a “naked-while-pregnant pose,” repeating the Demi Moore Vanity Fair cover. The August 2002 cover of GQ magazine had model Heidi Klum posing nude with a birthday cake. In February 2003, Kate Winslet appeared on GQ’s cover in sexy black lingerie. For the October 2004 issue of GQ, Heidi Klum, named “Woman of the Year” appeared in just a scarf and thigh-high leather boots. Paris Hilton went topless for the cover of Vanity Fair’s September 2005 issue, as did Jennifer Aniston for the December 2005 cover of GQ, wearing only jean shorts. Heidi Klum was naked on the cover of Jane in August 2006, when “celebrities went bare for charity.” For Vanity Fair’s “Young Hollywood” issue in 2006, Scarlett Johansson and Keira Knightely appeared naked with designer Tom Ford, subjects shot by Annie Leibovitz. In the August 2007 “celebrities pose naked for charity” issue of Jane, a nude Eva Mendes graced the cover with some strategically placed flowers. And for the January 2009 issue of GQ, Jennifer Aniston posed in nothing but a red, white and blue men’s tie. In February 2012, Time magazine voted three Newhouse/Condé Nast nude covers – Vanity Fair’s 1991 Demi Moore, Vanity Fair’s 2006 Young Hollywood threesome, and GQ‘s 2009 Jennifer Anniston with necktie – among a “top ten” selection of such covers it reviewed. Vanity Fair, however, ran into a bit of controversy in April 2008 after some near- nude photos taken by Annie Leibovitz of Disney teen star, 15year-old Miley Cyrus, leaked out in a New York Times story.Fashion, of course, is a core part of the Newhouse /Condé Nast publishing and advertising world, with the venerable Vogue magazine and its iconic editor, Anna Wintour, among its biggest stars. Wintour, in fact, was famously played by Meryl Streep in the 2006 film, The Devil Wears Prada. If that weren’t enough, a documentary film was made about Vogue’s famous annual fall fahion issue. The film, bearing the title, The September Issue, was released in 2009. It chronicled the production of what was then the largest issue in Vogue magazine history, the September 2007 issue, running some 840 pages thick, 727 pages of which were ads. The cover of that issue featured Sienna Miller along with its proudly proclaimed page count.
“We stand for a certain world,” Anna Wintour would later tell New York magazine writer Steve Fishman in a 2009 interview. “Women want to have pretty clothes. I mean, it’s a question of self-respect too.” In his New York article Fishman also quoted Wintour describing Vogue’s place in the publishing world as she pointed to some of the wares her magazine promoted: “… 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.”
Over at The New Yorker, meanwhile, the engaging stories and cover art of that magazine continued to be much-loved features, though occasionally generating notice with cover art that hit certain sensitive political or controversial subjects. Among these, perhaps most famously, was a July 2008 cover, meant as satire, that used cartoon renditions of then presidential candidate Barack Obama and his wife, depicting them as flag-burning, fist-bumping radicals – she dressed as a revolutionary and he in muslim garb. The artist, Barry Blitt, defended his work, saying “the idea that the Obamas are branded as unpatriotic in certain sectors is preposterous. It seemed to me that depicting the concept would show it as the fear-mongering ridiculousness that it is.” Editor David Remnick explained that the satire was deliberate and purposely overboard in order to mock all the phony smears that were being leveled at the Obamas. Still, others – and notably Obama’s campaign at the time – thought the imagery was harmful. Rachel Sklar writing in the Huffington Post, noted: “presumably the New Yorker readership is sophisticated enough to get the joke,” but she worried about those who might use the “handy illustration” to continue to spread the very scare tactics and misinformation depicted. Other New Yorker covers during the 2000s captured economic problems such as “Red Death on Wall Street,” by artist Robert Risko that ran in the October 20, 2008 issue, or “S.O.S.,” by Christoph Niemann, that ran in the August 15/22, 2011 issue. Two New Yorker covers in 2010 hit BP’s Gulf of Mexio oil spill – one from the June 7, 2010 issue that showed a man in a suit testifying before a Congressional-like panel of oil-saturated marine animals, and five weeks later, offering a visual play on Escher-like imagery, titled “After Escher: Gulf Sky and Water,” by artist Bob Staake, which reportedly “lit up the blogosphere,” as Staake cleverly modified the original Escher to include oil-drenched Gulf wildlife, with a pelican at the top and a turtle at the bottom.
Creating The Buzz
Hard Times at NewhouseIn June 2009, New York magazine published a cover story titled, “The Last Old-Media Tycoon,” alluding to changes then assaulting the Newhouse empire. The piece, written by Steve Fishman, focused mostly on the trendy magazine side of the business, referring to it as “Si Newhouse’s Dream Factory,” further elaborating with a subtitle that explained: “Condé Nast’s own stars compare their glossy empire to the MGM of Old Hollywood. But no one would wish it the same fate.”
Yet hard times were taking a toll on the Newhouse publications and the family fortune. In the first three months of 2009, The New Yorker’s ad pages were down 36 percent, and at Vogue and Vanity Fair, around 30 percent. Wired’s were down by almost 60 percent. Between 2007 and 2009 Newhouse had closed nearly a dozen magazines, among them: Jane, House & Garden, Men’s Vogue, Golf for Women, Domino, Portfolio, Modern Bride, Elegant Bride, Gourmet, and Cookie. Some of these, however, retained an on-line presence. Fishman’s New York piece explained how Si Newhouse had grown up in the magazine business and loved magazines, and how it pained him personally to close them down. But the nature of the Newhouse business was changing, as Fishman;s piece explained. Some 40 percent of the family fortune now came from its stake in Discovery Communications, which ran cable and satellite TV networks with programs such as Discovery Channel, Animal Planet and TLC.
Cash Cow Blues. Newspapers – the stock and trade of the Newhouse rise – were also in trouble by this time. What was once the reliable center of the Newhouse empire – at least with respect to its revenue-generating power – had become something of an albatross by the mid- and late 2000s. Hit hard by the realities of the internet, some big Newhouse newspapers were bleeding badly. In 2008, the Newark Star-Ledger for one may have lost as much as $40 million. Circulation there had fallen by nine percent to 223,000 copies and newsroom staff cuts of 40 percent followed. In 2009, The Ann Arbor News was reduced more or less to a website, AnnArbor.com, with a print edition appearing just two days a week using a fraction of its former staff to run the website. Revenues for the Newhouse newspaper group plummeted 26 percent in 2009, to $1.3 billion, according to Ad Age. In 2010, the slide continued at some papers, as circulation at The Plain Dealer in Cleveland — one of the biggest of the Newhouse papers — was down 7 percent during the six-months of March-August 2010 to an average of 253,000 copies. More recently, in May 2012, it was revealed that The Times-Picayune daily newspaper in New Orleans, founded in 1837, would be reducing its print schedule, publishing a print edition three days a week while shifting more coverage on-line.Painful News Hits. With the newspaper adjustments Newhouse has made in recent years, seasoned writers, reporters and columnists have lost their jobs. Layoffs at The Times-Picayune and three Newhouse-owned Alabama newspapers, for example, were pretty devastating. At The Times- Picayune, 84 people in the newsroom were laid off, including some of the paper’s best-known reporters and columnists. At the Alabama papers, 400 people lost jobs. Some re-hires occurred at the papers, as new digital positions opened, but those positions were not the same. In Alabama, for example, John Archibald, a columnist for The Birmingham News – known for the zingers he leveled at city and state political figures – was told he could return as a “local buzz reporter.” Joey Kennedy, a Pulitzer Prize-winning editorial writer for that same paper, was told he could return as a “community engagement specialist.” These are obviously not happy transitions for seasoned news journalists. And given the sizeable contingent of Newhouse-owned newspapers around the country, it is likely this trend will continue in the years ahead. Newhouse newspapers, however, are still capable of turning out nationally-important investigative stories, as demonstrated in 20011-2012 by The Patriot-News of Harrisburg, Pennsylvania. Curiously, among buyers of newspapers recently has been Warren Buffett, the billionaire investor. In April 2012, the Patriot- News and its reporter, Sara Ganim, received a Pulitzer Prize for “courageously revealing and adeptly covering the explosive Penn State [University] sex scandal involving former football coach Jerry Sandusky.”
And at least in certain markets, newspapers still make good business sense. Curiously, among buyers of newspapers recently has been Warren Buffett, the billionaire investor who has frequently had a keen eye for what’s likely to make money in the future. His purchase of the Omaha World-Herald, where Buffett lives, may have been “one for the home town.” Yet, his May 2012 acquisition of Media General’s 63 newspapers in the southeast U.S. may suggest that local advertising revenue is alive and well, and possibly more. If nothing else, newspapers offer good bases for digital development and website expansion.
Back at Newhouse, meanwhile, “Advance Digital” is growing alongside of, and in some cases may eventually supplant, much of the company’s newspaper empire. The focus there is to build out a local news and information network of websites, each in alliance with one or more of the 25 Newhouse-owned newspapers presently affiliated with Advance Publications. The Advance Digital websites provide local information, breaking news, local sports, travel destinations, weather, dining, bar guides and health and fitness information. In its pitch to advertisers, showing a U.S. map with links to its 12 websites, Advance Digital says: “We are a leading network of local websites – we are affiliated with over 25 newspapers; we reach over 18.9 million consumers every month; and we have a large and diverse audience of educated and affluent professionals.”Newhouse & The Web. The Newhouse organization, however, and especially Si Newhouse, have been criticized for not making quicker and better use of the web. Initially, Newhouse kept editors away from the web and viewed it simply as a vehicle for selling magazine subscriptions and little else. For nearly a decade, Newhouse opposed purchasing Wired.com. But after Donald Newhouse’s son, Steve Newhouse, pulled the deal together in 2006, the Wired website actually proved the more valuable piece of the business, outpacing the magazine itself, reaping sixteen times more unique visitors than the magazine had in circulation. Still, according to Advertising Age, by 2008, only about 3 percent of Condé Nast ad revenues came from digital, among the lowest in its class. Steve Newhouse, however, now in his early 50s, has been responsible for some web initiatives that may show the way forward, such as Epicurious.com and Style.com, both conceived as new brands for the company. Other Newhouse managers and executives have also helped bring in iPad applications, which can showcase Newhouse magazine design strengths. In 2010, GQ magazine became the first Condé Nast title available on the iPad. And as mentioned earlier, Reddit.com, the popular user-generated “social news” website, is now owned by Advance Publications, having been acquired by Condé Nast in October 2006 for an estimated $10-to-$20 milion. Today Reddit.com has some 35 million users. More Video & TV. In October 2011, Newhouse created Condé Nast Entertainment, an entity that will produce more video-styled content — including TV shows, web series and films — content derived from Newhouse journalists and its magazines, ranging from Vogue and GQ to The New Yorker and Vanity Fair. Having long admired the ways of the Hollywood studios, the Newhouse Condé Nast entities may actually become more studio-like in their outlook and content development. The chase for advertising dollars will be among the key drivers moving the Newhouse entities to more video and digital media.
Whether the Newhouse magazines can make this move with success, however, is an open question, as other publishers have tried similar moves in the past attempting to link to television and film that have failed. One advantage in their favor, however, may be the top-shelf nature of the Newhouse magazines and their premium-brand content, offering strong appeal to upscale consumers and advertisers.
International Business. In the last few years, another Newhouse manager, Si’s cousin Jonathan Newhouse, now in his early 60s, has made Condé Nast International a Newhouse growth area. As of November 2010, he added Vogue in India and GQ in China. Condé Nast International now has more than 100 editions. The division also recently launched Condé Nast Restaurants, which plans to license the Vogue and GQ brands as eateries overseas.
Culture-Maker StillIn the new swirl of media and technological change that is now sweeping through print and publishing, the Newhouse empire is likely to roll on, both as a successful business entity and a continuing force in contemporary culture. It will likely make the necessary digital adjustments and internal management changes to weather the most serious business threats. The Condé Nast magazines, in particular, have been setting the cultural tone among the wealthier classes and avant- garde for the last three decades or more, and will not likely yield much ground in that arena to competitors. Any doubt on that score, and what likely lies ahead, can be seen in the Vogue record-breaking tome of September 2012 – a 120th anniversary edition to boot! At 916 pages, featuring Lady Gaga on its cover, this issue of Vogue suggests – as Washington Post writer Ned Martel put it – “that even in bad times, someone is up for a good time.” In the pages of Vogue, he says, “the forecast is always a little sunnier…” And judging from the number of ad pages – 658, with single page rates in the September 2012 edition going for as much as $165,000 – the Newhouse empire would appear to be holding its own.
Date Posted: 18 September 2012
Last Update: 18 September 2012
Comments to: email@example.com
Jack Doyle, “Empire Newhouse:1920s-2010s”
PopHistoryDig.com, September 18, 2012.
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Other Stories at This Website on Newspaper & Magazine Topics:
Jack Doyle, “Newsweek Sold!, 1961″ (history of Washington Post’s acquisition of Newsweek), PopHistoryDig.com, April 16, 2008.
Jack Doyle, “FDR & Vanity Fair, 1930s”(politics & publishing during the New Deal era), PopHistoryDig.com, November 2, 2009.
Jack Doyle, “Murdoch’s NY Deals,1976-1977″ (Rupert Murdoch’s newspaper& magazine growth), PopHistoryDig.com, September 25, 2010.
Jack Doyle, “Rockwell & Race, 1963-1968,” (Rockwell art at Sat Eve Post & Look magazines), Pop HistoryDig.com, September 23, 2011.