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.
Life magazine photo of Sam Newhouse, 1963.
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.
Dec 1955: Newhouse makes Alabama deal.
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.
March 1958: “Glamour” shortly before the Newhouse acquisition.
But Newhouse also expanded his growing publishing business with new magazine properties. By 1959, he acquired the Condé Nastmagazine 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.
1962: Newhouse buys Louisiana newspapers.
In 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.
S.I. “Sam” Newhouse on the cover of Time magazine, July 27th, 1962.
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.
1967: Sam Newhouse acquired ‘The Cleveland Plain Dealer’ newspaper.
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; TheMobile 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 magazinefor $305 million.
The look of Parade magazine in August 1977, not long after being acquired by Newhouse.
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.
1974: Sam Newhouse.
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.
The banners of the two main newspapers in New Orleans ran together for a time after Newhouse consolidated the them. But in 1986, The States-Item name was dropped.
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.
The Random House logo.
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, societymagazine 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.
The New Yorker, Feb 25, 1985, featuring famous mascot, Eustace Tilley, about the time S. I. Newhouse acquired it.
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.
Vanity Fair editor Tina Brown with Si Newhouse, 1990.
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.”
2010 edition of “Condé Nast Traveler,” launched in 1987.
“Details” magazine in 1992 after a Newhouse overhaul.
Si Newhouse, meanwhile was also adding other magazines during the late 1980s. Among these was a magazine that would later become the CondéNast 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.
1996: “Allure,” Sharon Stone.
October 1995: “Bon Appétit.”
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.
October 12, 1962 issue of The New Yorker with Malcolm X portrait.
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
1994 & 1998
1997 paperback edition of Thomas Maier’s book on the Newhouse family.
The Newhouse family and its rising media holdings had long been of interest to enterprising journalists. And in October 1994, one of the first books examining the Newhouse empire appeared, titled: Newhouse: All the Glitter, Power & Glory of America’s Richest Media Empire & The Secretive Man Behind It. The 446-page book was written by Thomas Maier, a reporter for Newsday, the New York newspaper. The unauthorized investigative volume is centered mostly on Si Newhouse, who Maier calls at one point, “the most powerful private citizen in America.” The book examines the internecine warfare among owner and editors and some of the lavish partying, expense accounts, and excesses. Maier makes clear that he is no fan of the Newhouse empire, which he charges with promoting celebrity and gossip over social responsibility. The book also featured a few long-standing family friends, such as Roy Cohn, and the magic he worked for some politicians in selected Newhouse publications (including JFK and Ronald Reagan). Cohn also helped Newhouse land literary stars like Norman Mailer and aided the family in their battle with the IRS. Maier’s book raised warnings about a media monopoly in America, and how powers like Newhouse were changing journalism. The book won the Frank Luther Mott Award as best media book of the year in 1995 and excerpts appeared in the Columbia Journalism Review, Worth, and The London Telegraph. An updated paperback was published in 1997.
Carol Felsenthal’s 1998 book, “Citizen Newhouse.”
In December 1998, a second unauthorized biography appeared – Citizen Newhouse: Portrait of a Media Merchant. It was written by Carol Felsenthal who had written an earlier controversial volume on Washington Post owner, Katharine Graham. Citizen Newhouse covers the Newhouse story mostly by way of Si Newhouse. However, this book’s publication became something of a story in its own right when Newhouse worries gripped the book’s editor at Viking Press, causing her to cancell Felsenthal’s book contract. The book was finally published with Seven Stories Press.
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.
Sept 2001: Gwyneth Paltrow.
April 2011: Liv Tyler.
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 World
Actress Rachel Bilson on the cover of the March 2008 issue of “Lucky” magazine, a Newhouse success story in the otherwise tough 2000s.
Through 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.
Eva Mendes, August 2007.
Jennifer Anniston, Jan 2009.
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.
Vogue’s Sept 2007 fashion issue, featuring actress and model Sienna Miller on its cover.
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 Si Newhouse
Si Newhouse, buzz-maker.
With the Condé Nast group of publications in the last few decades there is no question that Si Newhouse has left a substantial stamp on contemporary culture. New York Times reporter Richard Pérez-Pena, writing on Newhouse in July 2008 observed: “Over three decades, Si Newhouse has built Condé Nast from an elite boutique into one of the largest, most successful American media companies, an upscale arbiter of popular culture from fashion to fiction.” He is sometimes compared to old-line publishers like Time-Life’s Henry Luce or newspaper baron William Randolph Hearst who also pursued personal interests through publishing. But Si Newhouse also became known for focusing on the details of his magazines, and some say he ran his shop like a Hollywood producer, also personally taken with the film industry. Graydon Carter, editor in chief of Vanity Fair, has said that the magazine’s annual “Hollywood issue” was Si Newhouse’s idea. Over at Vogue, whenever Si Newhouse offered advice, according to editor Anna Wintour, “he’s always made the surprising choice rather than the safe choice.” David Remnick, The New Yorker editor, has said much the same, describing Si Newhouse as the Babe Ruth of magazines, swinging for the fences.
Part of the sequence of 20 “celebrity pairs” used in Vanity Fair’s special Africa edition, July 2007.
Si Newhouse enjoys having his magazines at the center of the cultural swirl, no question. As New York Times reporter Richard Pérez-Pena, has observed: “More than almost anything else, acquaintances say, Mr. Newhouse delights in the buzz his magazines routinely create. He welcomes controversies, like the recent brouhaha about the Obamas-as-terrorists cover of The New Yorker. What tickles him often challenges convention, often embraces the new or novel, and often sells.” Anna Wintour at Vogue has made similar comments: “He likes the buzz, there’s no question. If you have lunch with a celebrity or political figure, he’s thrilled to hear about it.” Magazines in the Condé Nast group will sometimes go the extra mile to get attention and create the buzz their leader loves. In July2007, for example, Vanity Fair printed 20 different versions of its cover each featuring a famous celebrity pair. The issue was guest-edited by U-2 rock star Bono and was dedicated to fighting poverty in Africa. Each famous celebrity pair, in varying poses, was photographed by Annie Leibovitz, including: Maya Angelou, Desmond Tutu, Brad Pitt, Condoleezza Rice, George W. Bush, George Clooney, Iman, Jay-Z, Warren Buffet, Bill and Melinda Gates, Muhammad Ali, and a young Illinois senator named Barack Obama. The project was shot at locations around the globe and cost million do. But in the end, it paid for itself, according to Vanity Fair editor, Graydon Carter, as the buzz resulted in increased newsstand sales.
Hard Times at Newhouse
June 2009: New York magazine ran a cover story on part of the Newhouse empire, subtitled “Si Newhouse’s Condé Nast, a Good-Times Empire in a Hard-Times World.”
In 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 closednearly 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.
May 2012: The Times-Picayune of New Orleans announces print edition cutback and move to digital.
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.
Actor Hugh Grant on the cover of Vanity Fair, Italy (Feb 2010), one of more than100 international Newhouse editions.
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.
The Newhouse-owned Vogue magazine released its record-breaking, 916-page fall fashion issue in September 2012 with Lady Gaga on the cover.
In 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.
Article Citation: Jack Doyle, “Empire Newhouse:1920s-2010s” PopHistoryDig.com, September 18, 2012.
Sources, Links & Additional Information
Sam Newhouse Sr. and wife Mitzi, possibly early 1970s.
Vogue magazine, 15 August 1960, about a year after Newhouse acquired it and others.
A sample cover of "Glamour" magazine, January 1971.
March 1981: Actor Jack Nicholson on cover of Newhouse-owned “GQ” magazine.
Actor Clint Eastwood on the cover of "Parade," the Sunday supplement magazine, October 23rd, 1983.
Inaugural March 1991 issue of “Allure,” a Condé Nast publication that focuses on beauty, fashion, and women’s health, now with a circulation of 1 million plus.
November 1992: Democratic candidates Bill Clinton and Al Gore are featured on CQ’s cover with a story by Gore Vidal – “Gore Vidal Punches the Ticket.”
August 1993 Vanity Fair cover with model Cindy Crawford “shaving” famous lesbian singing star, k.d. Lang in drag, meant as a controversial statement.
Vogue magazine cover with Hillary Clinton, December 1998, a tough time for the First Lady. Click for story.
In 1998, Newhouse gained full control of “Wired” magazine, which focuses on a range of science & technology issues, often with stories in the life style and cultural realms, here featuring Pixar, June 2010.
New Yorker cover of November 15, 2010, titled “Bumped,” by artist Barry Blitt, follows mid-term elections depicting President Obama in the Oval Office with Rep. John Boehner (R-OH), then expected to replace Nancy Pelosi as Speaker of the House. Boehner is shown offering his fist, while Obama extends his hand for a handshake.
Milton Moskowitz, Michael Katz & Robert Levering, “Newhouse,” Every- body’s Business, An Almanac: The Irreverent Guide to Corporate America, San Francisco: Harper & Row Publishers, 1980, pp. 385-387.
“Condé Nast Publications,” Wikipe- dia.org.
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“Newhouse Buys Oregon Journal; Estimated Price is $8 Million for Daily in Portland,” New York Times, August 5, 1951.
“The Newspaper Collector,” Time, July 27, 1962.
“Newhouse Buys Paper in Omaha; $40 Million World-Herald Bid is Accepted by Director,” New York Times, October 30, 1962.
U. S. Congress, House of Representa- tives, “Federal Responsibility for a Free and Competitive Press,” Hearings before the Antitrust Subcommittee of the House Committee on the Judiciary (investiga- tion of monopoly practices in the newspaper industry), 1963.
John A Lent, Newhouse, Newspapers, Nuisances: Highlights in the Growth of a Communications Empire, New York: Exposition Press, 1966.
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“Samuel I. Newhouse, Publisher, Dies at 84; …Builder of an Empire in Newspapers and Broadcasting…,” New York Times, August 30, 1979, p. 1.
Carol J. Loomis & Rosalind Klein Berlin, “The Biggest Private Fortune: Media Magnates Si and Don Newhouse Control a $7.5-Billion Empire. It’s a Tightly Private Show, But There’s No Hiding Wealth This Big,” Fortune, August 17, 1987, p. 60.
Herbert Mitgang, “Random House Buys Crown,” New York Times, August 16, 1988.
Geraldine Fabrikant, “Si Newhouse Tests His Magazine Magic,” New York Times, September 25, 1988.
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N. R. Kleinfield, “The Media Business; Heads Have a History of Rolling at Newhouse,” New York Times, November 2, 1989.
Maggie Mahar, “All in the Family,” Barron’s, November 27, 1989.
Milton Moskowitz, Michael Katz & Robert Levering, “Newhouse,” Every- body’s Business: A Field Guide to the 400 Leading Companies in America, New York: Doubleday/Currency, 1990, pp. 359-361.
Deirdre Carmody, “Tina Brown to Take Over at The New Yorker,” New York Times, July 1, 1992.
Geraldine Fabrikant, “The Media Business; Vanity Fair Is Hot Property, But Profit Is Open Question,” New York Times, July 13, 1992.
Jan 17, 1977: Rupert Murdoch depicted on Time magazine cover as the invading King Kong of New York publishing world, with Time’s editors offering a Murdoch-esque news banner of style to come.
In was mid-January 1977, and Jimmy Carter was about to be sworn in as President of the United States. But in the newspaper and magazine business, the big news of the day was an audacious New York media grab by a then little-known Australian newspaper mogul named Rupert Murdoch. By late January 1977, Murdoch would own two premier New York media companies: the New York Post newspaper and New York Magazine Co., which then published three magazines: New York, The Village Voice, and New West.
Rupert Murdoch in the 1970s was just getting started on his global media empire, and by today’s standards, his 1976-77 New York acquisitions seem tame. Yet these deals, and the changes Murdoch undertook with them at the time, shook things up in the media print world and hinted at his grander plans ahead. In later years, Murdoch would create the Fox television network and acquire the Wall Street Journal, among other ventures.His 1976-77 deals, though, were the first signs that Murdoch would be a determined player in the U.S. market. These, however, were not the first deals Murdoch had made in America.
Murdoch and wife Anna in Texas, 1973.
In 1973 he acquired two newspapers in Texas — The San Antonio Express and The San Antonio News — for $18 million. The following year, he entered the U.S. supermarket tabloid business launching a brand new paper then called The National Star. More on these later.
By 1976, however, Murdoch had set his sights on the bigger eastern cities. He had looked at the possibility of acquiring some major women’s magazines, such as Redbook and Ladies’ Home Journal. But he was also considering starting a daily paper in either New York City or Boston, and that’s when the New York Post became available.
The New York Post
Dorothy Schiff, the publisher of The New York Post, with the presses running overhead in 1963.
The New York Post had roots that dated to 1801 and one of its founders, Alexander Hamilton. For years it was known as the New York Evening Post, and described itself as the nation’s oldest, continuously-published daily newspaper. At the time Murdoch became interested in the paper it was owned by Dorothy Schiff, the granddaughter of Jacob H. Schiff, a New York city financier and social welfare advocate. Dorothy Schiff had purchased the paper in 1939. Under her tenure the New York Post was devoted to liberalism, supporting trade unions and social welfare. It was the only New York City daily to support Adlai Stevenson, the Democratic candidate for president, in 1952 and 1956. Among some of its popular columnists were: Drew Pearson, Eleanor Roosevelt, Max Lerner, Murray Kempton, Pete Hamill, Earl Wilson and Eric Sevareid. It also had well a respected theater critic and Broadway columnist. Under Schiff’s direction, the paper increased its circulation by two thirds. The Post had undertaken stories critical of New York master builder Robert Moses, “slum clearance,” and J. Edgar Hoover, among others. It is also known for its 17-part series on communist witch-hunter, U.S. Senator Joseph McCarthy — headlined, “Smear, Inc.: Joe McCarthy’s One-Man Mob.” By 1976, The New York Post was the only surviving afternoon daily in New York City, with a circulation of about 500,000.
When Murdoch remarked to Schiff at one meeting that he was thinking about launching a new paper in Boston or New York, Schiff, then 73, told him she was thinking of selling the Post. According to one account of the deal that followed, “Murdoch pounced, wrapping up the $30 million sale in three weeks of secret negotiations.” He acquired the paper by late November 1976.
Dec 20, 1971.
Apr 22, 1974.
Mar 17, 1975.
Aug 23, 1976.
New York Magazine Co.
After Murdoch made the Post deal, he moved next on the New York Magazine Co. This company was run by Clay Felker, an innovative editor and writer who had worked at various newspapers and magazines including Life, Sports Illustrated, Time, Esquire, and The New York Herald Tribune.
The flagship publication of the New York Magazine Co. was New York magazine, a weekly focused on culture, politics, and New York City style. New York magazine was begun in 1964 by Felker as a Sunday supplement enclosed with The New York Herald Tribune. After the Tribune folded in 1968, Felker and graphic designer Milton Glaser (who later invented the “I Love NY” logo) reintroduced New York as a glossy, stand-alone magazine.
New York initially was intended to compete with The New Yorker — and an earlier, scathing piece about the New Yorker’s “mumified” reporting in April 1965 when New York was still a Tribune supplement, had already set off a war between the two. But New York magazine also became known for its own unique enterprise: helping launch and define what would be called the “new journalism” — a departure from the more objective norm of journalism to a form of narrative and point-of-view journalism relying on characters, dialogue, participant authors, and/or fictional devices.
Clay Felker in 1976 at ‘The Village Voice.’
Felker was the visionary in the enterprise. The magazine, under his leadership, “set about revising the hierarchies of urban experience,” Sarah Bernard and Aaron Latham wrote, in a 2008 retrospective on New York magazine. “Felker had observed something new happening in the city, and he’d brought his own outsider’s sense of romance and a fascination with power and status. The magazine he made had a new palette of interests, with no brow distinctions. Restaurants were as important as business, or politics. Everything that went on in a city dweller’s mind was something to be curious about.” The magazine, with Milt Glaser’s help, also did clever things with design, text, and illustration, also departing from the norm. New York magazine would become a model for many city and other magazines that would follow it in years to come. New York’s writers, editors, and contributors were some of the most talented to come out of the late 1960s and 1970s, including: Tom Wolfe, Jimmy Breslin, Nora Ephron, Kurt Andersen, Gloria Steinem, Gail Sheey, John Heilemann, Nick Cohn, Ken Auletta, Richard Reeves, Aaron Latham, Dick Schaap, Michael Kramer, John Simon, Pete Hamill, Gael Greene, Walter Bernard, Bill Flanagan, Anna Wintour, James Brady, Lally Weymouth, Andy Tobias, Judy Daniels, Laurie Jones, Nancy Newhouse, Nick Pileggi, Mark Jacobson, Robert Benton, Byron Dobell, Mimi Sheraton, Gael Greene, Dorothy Seiberling, Amanda Urban, Walter Bernard, and others. But Clay Felker was the visionary leader and editorial maestro. And as Tom Wolfe would put it, “he created the hottest magazine in America in the second half of the twentieth century: New York.”
Milt Glaser & Walter Bernard at New York magazine offices pondering a cover design, 1974. (Photo: Cosmos Sarchiapone).
New York in the 1960s and 1970s under Felker and Glaser covered the national topics of the day as well as New York’s cultural scene and its movers and shakers. Tom Wolfe, wrote one of the magazine’s early features on 1960s’ psychedelic cultural renegade Ken Kesey and his band of pranksters, a story that later became the Wolfe novel, The Electric Kool-Aid Acid Test. Gloria Steinem wrote about women’s issues for New York. She also wrote on the 1968 presidential election. Felker helped her launch her own publication in 1971, MS magazine, using New York to launch a sample insert issue (see cover above). New York also covered New York sports stars, the arts, and national politics. In 1969, it did a story on Joe Namath, flamboyant quareterback of the New York Jets. In the 1970s, Richard Nixon and the Watergate scandal were covered closely. In 1976, Nick Cohn wrote a New York story titled, “Tribal Rites of the New Saturday Night,” an account of a young working-class Brooklyn guy who spent his evenings at a local disco club — a story that became a sensation and helped spawn the film Saturday Night Fever.
The New York Magazine Co. also owned two other publications — The Village Voice and New West. The Village Voice, originally established by writer Norman Mailer and others in October 1955, was merged with Felker’s company in 1974, continuing as The Village Voice. The newest member of the New York Magazine group by 1977 was New West, which Felker had launched in Los Angeles, California in 1976, modeled after New York. The circulation of each of the magazines at the time of Murdoch’s takeover in 1977 was as follows: New York, 375,000; the Village Voice, 162,000; and New West, 290,000. So, how did Rupert Murdoch come to own this company?
Murdoch vs. Felker
Rupert Murdoch & Clay Felker in East Hampton, NY in the 1970s, when the two newspapermen were “pals.”
Clay Felker had met Rupert Murdoch in the early 1970s at the home of Washington Post Chairman, Katharine Graham. Felker, by this time had established his reputation as an innovator, and a gifted though somewhat erratic editor. He and Murdoch got on well at first, and by some accounts became “great pals.” In fact, Felker had introduced Murdoch to New York Post publisher Dorothy Schiff in 1974, at Felker’s East Hampton beach house. The two newspaper men had explored the possibility of undertaking a few business ventures together. Felker also confided in Murdoch about some difficulties he was having with his board of directors, as there had been some feuding about Felker’s “high living and low profits,” as one report later put it. Felker wanted to be chairman of the New York Magazine Co., but his board denied him that post — as well as his demand for a salary increase and company purchase of his Manhattan duplex. Felker had exceeded his budget for the launch of New West, and was reported as having spent lavishly on visiting staff, office space, and cut-rate introductory subscriptions. Meanwhile, the New York Magazine Co. was a publicly-held company, and its stock in 1976 was not appreciating, as the company had suffered a loss.
Milton Glaser, Lally Weymouth, Clay Felker, and Katharine Graham in 1976. (Photo: Jill Krementz)
Felker, then looking for some allies on his board, had asked Murdoch if he would be interested in buying a stake in the company. Some of Felker’s board members weren’t always cooperative and a few held sizeable stakes in the company. When Felker acquired the Village Voice in 1974, Carter Burden, the former owner of the Voice, received about 24 percent of the New York Magazine Co. stock.Murdoch told Felker he would be happy buy into the New York Magazine Co., but he wanted control of the company, which Felker would not agree to. The strategy of enlisting Murdoch’s help was soon dropped by Felker — but not Murdoch.
Murdoch saw another publishing asset to add to his New York base and began negotiating directly with the top shareholders at the New York Magazine Co. He wanted the whole company. Felker then sought allies in defense of Murdoch’s moves, eventually enlisting Katharine Graham of the Washington Post, who agreed to match Murdoch bid for bid — starting at $7 a share, then $7.50, then $8.25, matching his offers. But Murdoch by January 1, 1977 made a direct deal with Carter Burden, who then held the largest chunk of the company. Murdoch also lined up more than a dozen other shareholders in the New York Magazine Co. and soon held over 50 percent of the company. In the end, Murdock paid something on the order of $7.6 million for the New York Magazine Company.
Clay Felker addressing the troops at the Village Voice amidst the Rupert Murdoch takeover in 1977. (Photo: James Hamilton ).
Felker had tried a variety of strategies to stop Murdoch, and at one point did get a temporary injunction from U.S. District Court judge to block some stock sales to Murdoch. Felker had also lined up potential allies for cash, including British industrialist Sir James Goldsmith, Cincinnati financier Carl Lindner, and some unidentified New York real estate interests. But the prospect of a protracted court battle with Murdoch soon dissuaded these backers. In the battle with Murdoch, Felker also had the support of his New York staff, who were not keen on the idea of working for Murdoch. They held press conferences and walked out at one point, some complaining that Murdoch would bring “trash” journalism to the enterprise. They also met with Murdoch’s lawyers, arguing if they left, the enterprise would be devalued. They were told in reply, according to Ken Auletta, that it didn’t matter what they thought or did, as writers they were merely “furniture” in the equation.
“New West” magazine, had a look & tone much like “New York,” but also help put the company in jeopardy.
On the inside of the New York Magazine Co., however, there was a perspective that Felker had made the company vulnerable with the New West project, enabling Murdoch to make his deal. Here’s one observation from Alan Patricof, an early board chairman at New York:
“…He [Felker] always wanted to be respected as a businessman. Then he wanted to start New West. We didn’t have the money to do it. Clay was determined to do it. We reluctantly supported him. Clay spent freely, and he really wanted to create this footprint on both sides of the country. I remember going to Clay in ’76 saying, “Clay, we’re going to have to find some way of resolving this” — but he didn’t do much about it. Then Rupert Murdoch came along and was prepared to pay a premium on the price at the time. He knew that he was going to be buying something where Clay was not happy about it, and it wasn’t until the very last second, when the board had gone very far with Rupert, very far, at the midnight hour, that Clay produced Katharine Graham, but it was too late by then. He had plenty of time, but he didn’t want to face up to it. I have to tell you, it was one of the most reluctant sales I ever made…”
“…It was a time that we all thought the power was really with the writers, with the creative people, and in a way we learned what they learned in Hollywood: That’s not the way it is. The power is with the money…” – Richard Reeves In the end, Murdoch won. Felker was not happy with the loss of his dream enterprise. At the first directors’ meeting following the deal, Murdoch demanded two seats on the New York Magazine Co. board — and got them. He also said to Felker at the time that he thought Felker was “an editorial genius” and wanted him to stay and run the magazine. Felker refused. In his departure from the company, Felker was paid $1.5 million for his shares plus his $120,000 salary for three years. The managing editors of New York, the Voice and New West, as well as the ten most senior New York writers, were all given two-year contracts by Murdoch. Clay Felker, meanwhile, went on to other magazines and editorial projects, briefly tried Hollywood, and later took a faculty position at the University of California at Berkeley. In 1995 he was honored with the creation of the Felker Magazine Center at Berkeley. After battling throat cancer for some years, he passed away in July 2008 at age 82 and was eulogized and fondly remembered by many of his former New York staff.
Richard Reeves, one of the early writers at New York, offered this observation on Felker, Murdoch, and the magazine changing hands in1977:
“…The story was Clay was a great editor and a bad businessman, and Murdoch sensed that. He was like a wolf or a shark. He could sense there was blood in the water, and he made his move. It was a time that we all thought the power was really with the writers, with the creative people, and in a way we learned what they learned in Hollywood: That’s not the way it is. The power is with the money. While we wrote about that all the time, and while Clay understood that intellectually, as a businessman I don’t think that he did.”
Now that Murdoch owned New York,The Village Voice, and the New York Post, the city’s publishing establishment began to size up their new neighbor and the kind of journalism he might be bringing their way. They looked at his record in Australia and the U.K, and what he had done in San Antonio and with his new national U.S. tabloid, The Star. What they found was not encouraging.
Rupert Murdoch shown with copies of his London newspapers “The Sun” and “The Times,” the latter of which he would acquire in 1981.
Rupert Murdoch, born into an Australian newspaper family in 1931, was educated at Oxford in England and began his rise back home with one newspaper, the Adelaide News. But he soon began acquiring suburban and provincial newspapers throughout Australia. In 1956 he bought a Sunday paper in Perth for $400,000. He was also successful launching the Channel Nine TV station begun in Adelaide, a station that became profitable. In 1960, he spent $4 million for the Sydney Daily Mirror, a tabloid-styled paper. He also acquired a small, Sydney-based recording company, Festival Records. In 1964, he ventured to New Zealand acquiring a daily in Wellington called The Dominion. That same year back home, he established a new newspaper called The Australian, the nation’s first national daily newspaper. The Australian was intended by Murdoch to be a “quality” newspaper, and one with political influence.
By 1968 Murdoch’s holdings included newspapers, magazines and broadcasting stations worth an estimated $50 million. He then turned to the U.K., making a bid in 1969 for the largest-selling British Sunday newspaper, The News of the World. With $20 million he outbid British book publisher Robert Maxwell and won controlling interest of the “Sunday scandal sheet,” as some called it. News of the World then had a circulation of about 6 million. A year later, also in London, he acquired The Sun, a daily broadsheet newspaper associated with Labor politics; a paper then in poor condition with a circulation of about 950,000. The Sun had begun in 1964 with noble aspirations, designed to tap into the lifestyle changes of the 1960s and the rise of the young, upwardly-mobile professionals, including career-oriented women. Murdock and his editors turned it into a tabloid, shifted the emphasisaway from Labor politics, and moved to more titillating topics using a formula of “sex, sport and sensation.”
First edition of The Sun (U.K.) under Rupert Murdoch, Monday, Nov 17, 1969.
The Sun’s first edition of November 17, 1969 ran with the front-page headline “Horse Dope Sensation,” billed as an “exclusive” — a story about a racing trainer admitting he had doped his horses. Some of the stories inside that edition featured gossip on the “playboy Prince of Wales” — the 21-year-old Charles “sowing his wild oats” with 20-year-old daughter of the Duke of Westminster. The Rolling Stones were also given some ink in the center of that edition, focused partly on the clothed and unclothed ladies they encountered in their rock ‘n roll travels. Other stories in subsequent issues would focus on sex scandals. At one point, Murdoch’s other London paper, The News of the World, began rehashing the memoirs of a famous call girl named Christine Keeler — a former model and showgirl whose affair with a British government minister in 1963 rocked the Conservative government of Harold Macmillan. U.K. talk show host David Frost brought Murdoch on TV at one point to grill him about the Keeler material his paper was then running. Some critics began calling Murdoch the “dirty digger” — digger being a slang term for an Australian. Murdoch seemed unscathed by the criticism, happy to see his newspapers’ circulation rising. In fact, the use of titillating material in Murdoch’s papers was just getting started.
“Page Three Girls”
In November 1970 — about a year after The Sun’s first edition — a nude photo of German model Stephanie Rahn appeared on page three of The Sun. It was the first nude photo, shot from the side with breast area exposed, that a major circulation U.K. newspaper had run. Murdoch, out of the country when the photo ran, was reportedly upset over the move at first, but after the circulation numbers rose, accepted it. Page Three girls boosted circulation — from about 1 million in 1969 to 3.8 million in 1977 by one count — and made The Sun one of the most popular newspapers in the U.K.Thereafter, “the Page Three girl” became a regular feature. A year earlier, Murdoch’s first edition of The Sun had included a “glamour page” using clothed models, some with unbuttoned shirts or in otherwise provocative poses, but none that were nude or topless. With the Stephanie Rahn photo of November 1970, however, a new era had begun, as the Page Three girls were gradually shown in more overtly topless and/or suggestive poses. Over the next four years The Sun published photos of topless Page Three girls intermittently, going daily with the feature in 1975. Although controversy ensued, the Page Three girls boosted circulation — from about 1 million in 1969 to 3.8 million in 1977 by one count — and made The Sun one of the most popular newspapers in the U.K. Competing U.K. tabloids the Daily Mirror and Daily Star, instituted similar features in their papers. Today, “Page Three” and “Page 3″ are registered trademarks of News International Ltd, the parent company of The Sun. In 1999, The Sun also launched a Page Three website, Page3.com, complete with online archive.
Excerpts from this book ran in The Sun.
The Sun newspaper in the 1970s also ran feature stories with headlines such as such as “Do Men Still Want To Marry A Virgin?” and “The Way into a Woman’s Bed.” The Sun would also run serializations of best-selling erotic books. Portions of The Sensuous Woman by “J” (Joan Garrity), first published in 1969, were run in Murdoch’s Sun at a time when copies of the book were being seized by British customs, causing a stir in London, but providing some free publicity for Murdoch’s newspaper.
The Sun also ran excerpts from Jacqueline Suzann’s 1969 novel, The Love Machine. Through the 1970s, The Sun would overtake the Daily Mirror to become the UK’s biggest selling daily. Back in Australia, meanwhile, Murdoch in 1972 acquired another Sydney newspaper, The Daily Telegraph, a morning tabloid. But he also began looking elsewhere around the world.
Murdoch in Texas
By 1973, Murdoch had turned his attention to America, buying up his first two newspapers in San Antonio, Texas — the San Antonio Express and San Antonio Evening News from the Harte-Hanks news group. Reportedly, Murdoch flew into town and made the deal in a single day, signing the papers at the airport, but leaving instructions on his way out to turn one of the papers “into a screamer.”
Rupert Murdoch with wife Anna and Robert G. Marbut, of Harte-Hanks Newspapers in San Antonio, 1973 (photo: San Antonio Express-News).
Under Murdoch, the San AntonioNews became a tabloid-styled paper, while the San Antonio Express retained its original, conservative format. Neither the San Antonio Express nor the Evening News showed much interest in politics. Neither paper’s reporters covered state or national political conventions, but sportswriters would travel wide and far to cover the San Antonio Spurs basketball team. Murdoch pitted his San AntonioNews against Hearst’s San Antonio Light in a circulation battle which brought out the worst in both. “Murdoch provided a daily diet of rape and mayhem, tortured tots, and killer bees,” reported Time magazine of Murdoch’s 1970s San Antonio paper. One classic story in the San Antonio News during that time was about a divorced epileptic, who told police she was buried alive in a bathtub full of wet cement and later hanged upside down in the nude, with the News recounting a bizarre horror story of rape, torture, and starvation.
An example of San Antonio News “rack-card” advertising, 1970s.
In addition, because single-copy sales were a major part of the News‘ circulation, news-stand “rack card” advertising became part of the hype. Rack cards are poster-size advertisements attached to the paper’s vending machines and newspaper racks. These cards often feature attention-grabbing headlines touting stories in the paper. San Antonio News rack-card advertising went the extra mile, shouting out the newspaper’s latest story lines, using bizarre and sordid-type headlines such as: “Midget Robs Undertaker at Midnight”; “Dissolve Old Man in Acid!”; “Gunned-Down Pregnant Cat Fights for Life”; “Vampire Killer Stalks City”; “Sewer Boy Still Missing”; and “Animal Auschwitz.” And the actual front-page headlines that appeared in the paper were often of a similar vein. In 1976, Texas Monthly magazine ran an article critical of Murdoch’s San Antonio News, titled, “Weirdo Paper Plagues S.A.” In the piece, the writer took the paper to task for its diet of strange stories:
“…Readers of the News are learning things that five years ago they never dreamed they might be privileged to know: ‘Nude Principal Dead in Motel,’ for example, or ‘Armies of Insects Marching on S.A.’. The front pages regularly impart disconcerting information: ‘Handless Body Found.’ Or, ‘Screaming Mom Slain.’ Or, ‘Uncle Tortures Tots with Hot Fork.’ …The columns of the paper are populated by an unforgettable (and recyclable) cast of characters: tots, oldsters, thugs, nudies, grannies, moms.”
Time magazine, in one January 1977 review of Murdoch’s San Antonio paper, observed that “the front page of the News is virtually devoid of substantial news.” Only “the diligent reader,” concluded Time, would discover any meaningful reporting on politics or national policy issues.
An April 1978 edition of “The Star” then featuring Cher and assorted other stories.
Murdoch in 1974 also started from scratch a new tabloid he named The National Star. It was designed asa U.S. supermarket paper to compete with the established National Enquirer tabloid. The Star, as it would become known, was initially an unstapled tabloid printed on newsprint. In a few years’ time, however, it became hugely successful, although at first it ran well behind the Enquirer. Murdoch spent millions on a TV ad campaign to promote it and he burned through a series of editors as well. But by 1977, The Star was making a profit and reaching about 1.6 million readers weekly. By the early 1980s, it was almost even with the Enquirer, at close to 4 million. Although based in New York, some portion of The Star’s production was printed on Murdoch’s San Antonio, Texas presses, and a version of The Star was also inserted as a Sunday supplement in the San Antonio papers. Both The Star and The Enquirer did their commerce in front-page titillation, typically using the most current celebrity news coupled with headlines of the off-beat, outrageous, and/or scandalous. Murdoch, meanwhile, had begun living in the U.S. by 1974, splitting his time between his New York city office and a more spacious family residence upstate.
But in 1977, what Murdoch’s New York city neighbors in the publishing biz wanted to know was: would his tabloid publishing style from the U.K., San Antonio, and The Star now carry over into the New York Post, New York magazine, and the Village Voice?
Murdoch in New York
Some of the fears about what Rupert Murdoch would do with his New York acquisitions were realized, but some weren’t. The New York Post turned for the worst, according to some, but New York and The Village Voice, by most accounts, did not seem to change substantially.
April 23, 1979.
March 16, 1981.
Jan 31, 1983.
At New York, Murdoch initially had a succession of editors in the 1970s, followed by Edward Kosner, of Newsweek, who Murdoch hired in 1980. Murdoch also acquired another magazine, Cue, a listings magazine that had covered the city for more than 50 years. Murdoch folded Cue into New York, which added value to New York with a going-out guide, while eliminating a competitor. New York’s content, meanwhile, tended toward a mix of news- magazine-style, trendy pieces, articles on shopping and consumer topics, and close coverage of the glitzy 1980s New York scene epitomized by financiers Donald Trump and Saul Steinberg. Other stories focused on national and New York political figures or the major issues of the day. The magazine was profitable for most of the 1980s and its stories sometimes permeated popular culture, as in mid-1985 when the term “Brat Pack”was coined by New York — used in a cover story to describe a group of young Hollywood film stars that variously included: Emilio Estevez, Anthony Michael Hall, Rob Lowe, Andrew McCarthy, Demi Moore, Judd Nelson, Molly Ringwald, Ally Sheedy, Tom Cruise, C. Thomas Howell, Matt Dillon, Ralph Macchio, Charlie Sheen, and James Spader. Meanwhile, given New York’s survival and good standing through the 1980s, the earlier worries of Murdoch trashing the magazine seemed over done. Even his critics would later concede that he did not fundamentally change New York magazine.
Village Voice, March 1981.
“In 1977, I was working for New York magazine when Murdoch bought it,” explained Ken Auletta in a 1995 Frontline documentary for PBS. “We all feared he would tart up our journalism, so more than 40 of us quit. But he didn’t care. And as it turned out, we were wrong. He didn’t change the magazine. But some thought he did desecrate the Post. He made it more conservative and he replaced one quarter of the staff with tabloid warriors from his empire.”
Over at The Village Voice, meanwhile, many employees there also feared for the paper’s quality under Murdoch, at least initially. And Murdoch did make a number of personnel changes at the Voice, but largely allowed the paper run itself. Some found in subsequent years that the Voice had actually become closer to its original form, hitting a steady circulation of about150,000, where it remained for several years. In 1981, The Voice received a Pulitzer Prize for the feature writing of Teresa Carpenter.
The biggest changes that Murdoch brought to his acquired New York publications, however, were those that came at the New York Post.
New York Post's "blackout special" edition, July 14, 1977.
At the Post, Murdoch initially became an active presence in the newsroom, according to some, especially punching up the paper’s headlines and copy. Celebrities got more play, too. Early on, Murdoch’s editors created a “Page Six,” gossip column at the Post, and before long there were stories about Woody Allen’s love life, ice skater Dorothy Hamill dating Dean Martin’s son, and a piece noting that Muhammad Ali wanted to star in an all-black remake of Ben-Hur. In March 1977, The Post ran 21 items on Farrah Fawcett-Majors, then a big star of the popular Charlie’s Angels TV show. Stories at the Post also became shorter; photos and headlines, larger. And as it turned out, the summer of 1977 was a ripe time for Murdoch-styled journalism, beyond just celebrities.
First, it was the summer of the great New York city blackout of July 13-14, 1977 that created near panic in the city for about two days, during which the city suffered heavy looting and civil unrest. Over 3,000 people were arrested. “They [The New York Post] handled the blackout stories by exaggeration and by scare headlines over their stories and on their front pages,” recalled Thomas Kiernan on a PBS Frontline TV documentary. “The impression was created that there was an impending threat of a kind of race war in New York.” The Post published a “Blackout Special” on the first day following the blackout with the giant front-page headline: “24 Hours of Terror,” also noting in smaller headlines that New York Governor Carey “fears a new blackout” and that Grand Central Station was “crippled.” Inside the paper was a special pullout section headlined, “A City Ravaged.” New York City’s deputy mayor, Osborn Elliott, sent a letter to Murdoch during the crisis suggesting his paper had made the situation worse. Mayor Abe Beame was more direct, calling Murdoch an “Australian carpetbagger” who “came here to line his pockets by peddling fiction in the guise of news.” Across town, at the rival Daily News, Pete Hamill wrote: “Something vaguely sickening is happening to that newspaper, and it is spreading through the city’s psychic life like a stain.”
NY Post “Son-of-Sam” story, August 10, 1977.
The second big story for the New York Post and other New York papers that summer was the “Son-of-Sam” murder spree. “Son of Sam was just a godsend for the Post,” said James Brady ” — you know, a good serial killer. He was targeting people in lover’s lane, primarily attractive young women of a certain physical description, and he was sending these wacky notes.” Steve Dunleavy, who covered that story for the Post, added that Son of Sam “really changed the city” during the killer’s rampage. The sale of locks and guns soared. “The Son of Sam virtually gave New York City this massive nervous breakdown,” said Dunleavy. And Murdoch’s Post was in the thick of it, whipping up the fear and fervor. “It was half truth, half speculation,” said Thomas Kiernan. “That was Murdoch journalism.” Among the headlines the Post ran as the killer increased his range in city was one on August 1st that declared: “No One Is Safe from Son of Sam.” On August 10, 1977, when the police finally caught Son of Sam — whose name was David Berkowitz — Murdoch’s Post ran the banner headline shown above. Inside this edition, the Post ran sixteen related stories along with 36 photographs. There was also the first in a series of installments from a crime novel “that might have inspired” the Son of Sam killer. The New York Post that day sold more than 1 million copies, nearly twice its average daily circulation.
August 18, 1977 NY Post Elvis Presley story & drug revelations from Steve Dunleavy book.
After Son of Sam, it was on to other stories. The August 17th, 1977 issue of the New York Post — like other newspapers that day — ran a front-page story on the death of rock ‘n roll singer, Elvis Presley. But the Post had a special angle on the Elvis story, thanks toreporter Steve Dunleavy, whose book “Elvis: What Happened?” had just been published. Excerpts from the controversial book, including allegations of Presley’s extensive drug use, had been slated to run the following week. However, with Presley’s death, the Post printed the first installment in its paper that day, with a front page box boasting “exclusive ” material along with headline: “New Book Tells of His Decline in Drug Nightmare.” The story helped push the relatively unknown book into the spotlight.
In addition to the 1977 front-page stories covering Elvis, the blackout, and Son-of-Sam, Murdoch also put his Post squarely in the middle of the New York city politics — and particularly so in the promotion of Ed Koch for mayor. Koch, then a U.S. Congressman, later recalled in a PBS Frontline documentary, a phone call he received one day in 1977 from Murdoch:
…When the phone rang, the voice on the other end said something like, “Congressman Koch, please.” I said, “Speaking.” He said, “Congressman, this is Rupert,” and I guess I was still a little sleepy maybe. I said to myself, “Rupert? Rupert? Rupert’s not a Jewish name. Who could be calling me at 7:00 o’clock in the morning named Rupert?” And then suddenly, because he was speaking, I realized it was Rupert, the Australian. I mean, the voice came through. And I said, “Yes, Rupert?” He said, “Congressman, we’re going to endorse you today on the front page of the New York Post and I hope it helps.” I said, “Rupert, you’ve elected me.”
Ed Koch: Former U.S. Congressman who Rupert Murdoch’s NY Post helped elect mayor in 1977.
Ken Auletta added, that The Post did not just support Koch, “it anointed him.” Koch would also reiterate in later interviews that the Post’s endorsement transformed his campaign. “I wouldn’t have won without it,” he would later tell The New Yorker’s John Cassidy.
In 1977, Koch ran in the Democratic primary against incumbent mayor Abe Beame. Also in the primary were candidates Bella Abzug, Mario Cuomo, and others. Koch ran to the right of the other candidates, on a “law and order” platform, using the blackout and crime as major issues, promising to restore public safety. Still, Rupert Murdoch’s decision to have the Post endorse Koch in both the primary and the general election was key.
According to one poll, only four per cent of voters even knew who Koch was before Murdoch’s Post endorsed him. Koch proceeded to win the initial vote in the Democratic primary as well as a runoff between he and Cuomo. In the general election, too, Koch prevailed, not only crushing Roy M. Goodman, the Republican candidate, but also beating Cuomo for a third time, as Cuomo ran on the Liberal Party ticket. Journalist Jonathan Mahler, who would write the 2005 book The Bronx is Burning, later observed: “Murdoch had wagered that Koch represented his best shot at becoming a kingmaker in his new town.”
Jonathan Mahler’s book on the summer of 1977also covers Rupert Murdoch & the NY Post.
Murdoch’s Post, meanwhile, would continue to collect criticism for its political coverage, both during the 1977 mayoral race as well as subsequent gubernatorial and presidential elections. During the month before the 1977 mayoral primary, the Post’s early editions ran nothing unfavorable about Ed Koch, but there were unflaterring stories about Koch’s opponents, including Mario Cuomo. One of the latter used the headline, “The Blond Millionairess Whose Big Bucks Back Cuomo.” Koch also received more favorable front-page headlines and more front-page ink in the Post than all of the other candidates, including the incumbent, Mayor Abraham Beame, who had already lashed out at Murdoch, calling him an “Australian carpetbagger.”
Ken Auletta, later writing for the New Yorker, would also observe: “When Murdoch endorsed Edward I. Koch for mayor…, his support spilled over onto the news pages of the Post, with the paper regularly publishing glowing stories about Koch and sometimes savage accounts of his four primary opponents.” But after the election, adds Auletta, “fifty of the sixty reporters on the paper signed a petition of protest to Murdoch.” Murdoch reportedly invited them to quit, and twelve did.
The New York Post was one of a few newspapers to run Jimmy Carter’s June 1979 quote about Ted Kennedy on its front page.
As the 1980 presidential race was gearing up, The Post would sometimes jump into the fray with a controversial front page, as it did in the June 1979 example at left when incumbent Democratic president Jimmy Carter and U.S. Senator Edward Kennedy appeared to be the likely contestants for the Democratic nomination. The Post was one of the few newspapers nationally to run the full quote on its front page. On television that evening, the CBS’s Evening News substitute anchor, Bob Schieffer, alluded to Carter’s remark without quoting it directly, as a copy of the New York Post’s front-page headline was projected on a screen behind him.
Later in the 1980 presidential race between Carter and Ronald Reagan, Murdoch’s Post supported Reagan. And some of the Post‘s news columns during the campaign used headlines that tilted to Reagan such as: “Reagan: I’ll Save the Middle Class” — a headline which ran in red ink on the front page. Other Post stories featured celebrities for Reagan but not Carter, with headlines such as, “Stars Want Ron to Get the Part.” The Post also ran a headline the day before the Reagan-Carter election that said, “Kohmeni Pulls Strings,”a slam on Carter’s then difficult going with a hostage situation, then a hot-button election issue.
Rupert Murdoch in the New York Post press room with a copy of a Ronald-Reagan era edition of the paper, 1980s.
In January 1982, a front-page headline in the Post proposed “Ed Koch for Governor” even though Koch had not entered the race. In fact, ten days earlier in the Post’s discussion of some11 possible candidates, Koch wasn’t even mentioned. But the Post charged ahead on behalf of Koch. It invited readers to fill out Koch-for-Governor coupons on its news pages every weekday for the two weeks. Simultaneously, the Post ran news headlines such as, “Apple Loves Koch.” Mayor Koch eventually entered the gubernatorial primary, which he proceeded to lose to Mario Cuomo. Still, Cuomo was steamed about the ink the Post had given Koch. When most papers endorse candidates, Cuomo explained, “you get one column on the editorial page. With Rupert, he turns the whole paper over to you.”
In any case, within five years of making his New York acquisitions, Rupert Murdoch had become something of a political broker and kingmaker, both locally and nationally, by virtue of his media holdings. And there was much more to come. “Murdoch says he loves newspapers because they give him the power to help shape the public mind and, as always, he loves to win,” observed Ken Auletta in the 1995 Frontline documentary. Robert Spitzler, who had been managing editor at the New York Post, added in that same documentary:
“Rupert is a power junkie, in the sense that he enjoys the company of people with power. He also holds them in a certain degree of contempt…
When Rupert first came to New York, he was an Australian of no particular reputation. He bought the New York Post, suddenly he becomes an intimate, so to speak, with mayors, with governors and the president. You can’t ignore a guy who runs a New York newspaper….”
The New York Post’s “Headless Body In Topless Bar” headline of April 15, 1983.
Meanwhile, out on the newsstands, Murdoch’s New York Post continued to shock with the best of them, using sensational and gritty headlines to sell its papers. One of the all-time classics in the outrageous headline department is the New York Post’s April 1983 classic, “Headless Body in Topless Bar,” shown at left, which described a robbery at a Brooklyn strip club in which the gunman herded all the customers into one room, shooting and decapitating the tavern owner.
Other front page headlines at the Post could play to the popular hero of the moment, such as New York city subway rider Bernie Goetz who turned to vigilantism in December 1984 when he shot four would-be muggers on the New York subway. The incident made headlines for months at the Post and elsewhere. In 1985, when Goetz turned himself in, the Post ran the front-page headline, “I Am Death Wish Vigilante.” Other classic front-page headlines in the Post during the first Murdoch era ran the gamut of stories — crime, politics, sex, sports and scandal. The Post in recent years apparently became quite happy with the notice its front-page headlines received, as it compiled a collection of them in a 2008 book using the title, Headless Body in Topless Bar: The Best Headlines from America’s Favorite Newspaper.
Change & Sell Off
Rupert Murdoch’s media reach in the 1980s and 1990s was extending more into broadcast and satellite television, although print and publishing would remain important to Murdoch. Still, his 1976-77 New York publishing acquisitions — the New York Post, New York magazine, The Village Voice — as well as his San Antonio newspapers and supermarket tabloid, The Star, were all sold off during the late 1980s and early 1990s for various reasons. Among these sell-offs, however, the New York Post would be re-acquired by Murdoch later. More on that in a moment.
Rupert Murdoch, against a wall of his various publications at his New York Post office, 1985.
In September 1985, Murdoch became a naturalized U.S. citizen primarily to satisfy legal requirements enabling him to become an owner of American television stations. In that year, Murdoch acquired 20th Century Fox film studios as well as $1.55 billion worth of TV stations in New York, Los Angeles, Chicago, Dallas, Houston, Boston and Washington, DC. These stations then reached some 22 percent of all television households in the U.S., and combined with the Fox film studio, they provided the structure and distribution network for studio programs and a fourth U.S. broadcast television network, the Fox Broadcasting Co. Murdoch would continue buying up newspapers, however, as he acquired several in 1987 and also U.S. book publisher Harper & Row, combining that publisher two years later with another, Collins, to form HarperCollins. Murdoch’s News Corp. by then was the world’s largest newspaper publisher, controlling, for example, about 60 percent of Australian newspapers and thirty-five percent of U.K. newspapers. In 1989 he also began Sky television in the U.K., an expensive undertaking in the subscription satellite TV business. In the course of all the media buying and selling, Murdoch was incurring debt and running up against regulatory restrictions.
In 1985 he put the Village Voice up for sale when the U.S. Federal Communications Commission (FCC) blocked his purchase of a New York radio station unless he sold off one of his New York papers. So at that point, he sold the Voice to Leonard Stern, heir to the Hartz Mountain pet food company, for $55 million. But Murdoch was also confronting cross-ownership media rules in other parts of his burgeoning U.S. empire — and in the process, coming up against some unfriendly politicians. Among the latter was U.S. Senator Ted Kennedy, who Murdoch’s papers and TV stations had covered in some unflattering ways, including dredging up and re-broadcasting some old news about Kennedy’s 1969 Chappaquiddick, Massachusetts automobile accident, in which a Senate aide named Mary Jo Kopechne had been killed.
Murdoch, however, had enjoyed a “temporary” waiver under FCC rules enabling him to own both a newspaper and a broadcast station in the same city. Murdoch profited from that waiver in New York, Boston, and other markets where he owned newspapers and broadcast stations. However, by the late 1980s,One headline in the Herald read: “Kennedy’s Vendetta,” calling the Sen- ator “fat boy” in a front- page editorial. Ted Kennedy and Senator Fritz Hollings backed a rider to a budget bill that ordered the FCC to strictly enforce the media ownership rules, eliminating waivers such as that held by Murdoch. So Murdoch went to war. He turned his Boston Herald and New York Post headline writers loose on Kennedy. One headline in the Herald read: “Kennedy’s Vendetta” and included some prose in a front-page editorial calling Kennedy “fat boy.” The New York Post ran one headline during the controversy that announced, “It’s War on Post Busters.” In addition, Murdoch went on CNN’s “Crossfire” TV show to publicly plead his case. “We’re keeping the Boston Herald in spite of Senator Kennedy,” he said. Murdoch explained he would sell his small Boston TV station if necessary, but keep the newspaper. However, in the end, Murdoch was forced to sell off the Boston Herald. In New York, he would also sell off the New York Post for $37.6 million, as he could not give up his New York TV station since it was the flagship for his new Fox television network. But Murdoch wasn’t finished with the New York Post in 1988; he would return. In the meantime, however, he went shopping elsewhere, acquiring TV Guide and others at Triangle Publications for $3 billion.
After Rupert Murdoch re-acquired the New York Post in 1993, creative headlines continued to appear, as in the Barry Bonds “hypodermic needle” home run record story.
By the early 1990s, feeling the bite of mounting debt in some of his other ventures, Murdoch began selling off a few more of his U.S. publishing properties. Among these was the supermarket tabloid, The Star, which he sold to the GP Group, the National Enquirer’s parent, for $400 million in cash and stocks. At the time, the Star’s 3.6 million weekly circulation was just below National Enquirer’s 4.1 million. Murdoch also sold off his San Antonio newspapers in 1992 — by this time, combined into one paper, The San Antonio Express-News. Murdoch’s News Corp was then struggling from some earlier debt restructuring and needed cash. So he sold The San Antonio Express-News to the Hearst Corporation for $185 million.
Through the 1980s and 1990s, Murdoch was buying and selling media properties as the situation and his expansion plans required. In 1993, the New York Post came on the block again, as it was in poor shape financially and nearly bankrupt. But in order for Murdoch’s News Corp. to acquire the Post, a waiver from the same FCC rules that required him to shed the paper five years earlier was required. This time, a number of politicians, including Democratic New York governor Mario Cuomo, came to Murdoch’s support and persuaded the FCC to grant him a permanent waiver from the cross-ownership rules. Without that ruling, the New York Post would have shut down, but instead, under Murdoch’s renewed direction, the Post more or less picked up where it left off when Murdoch first owned it. In recent years, criticism of the paper’s style and sensationalism has appeared in selected articles and at various websites, including one list of documented 1997-2009 items at Wikipe- dia.org.
Rupert Murdoch, meanwhile, has continued to build his media empire through the 2000s, acquiring most notably in recent years, MySpace.com in 2005 for $580 million, and the Wall Street Journal in July 2007 for $5 billion.
Stay tuned to this website for future stories on the history of media and publishing and their impact on politics, business, and popular culture. For other stories at this website, please visit the archive, the home page, or the media & society category page. Thanks for visiting.
“Press: Whip His What?,” Time, Monday, Jun. 25, 1979
Steve Stecklow, Aaron O. Patrick, Martin Peers & Andrew Higgins, “Calling the Shots: In Murdoch’s Career, a Hand on The News; His Aggressive Style Can Blur Boundaries; ‘Buck Stops With Me’,” Wall Street Journal, June 5, 2007.
Allan R. Gold, “Kennedy and Paper Battle in Boston,” New York Times, January 7, 1988.
Allan R. Gold, “Kennedy vs. Murdoch: Test of Motives,” New York Times, January 11, 1988.
New York Post Staff, Headless Body in Topless Bar: The Best Headlines from America’s Favorite Newspaper, March 25, 2008, 208 pp.
Steven Cuozzo, It’s Alive! How America’s Oldest Newspaper Cheated Death and Why it Matters, New York: Times Books, 1996, 342 pp.
Paul Farhi, “Murdoch, All Business: The Media Mogul Keeps Making Bets Amid Strains in His Global Empire.” Washington Post, February 12, 1995.
David M. Alpern, “What Makes Rupert Run?” Newsweek, March 12, 1984.
Thomas Kiernan, Citizen Murdoch, New York, 1985.
Thomas Moore and Marta F. Dorion, “Citizen Murdoch Presses for More.” Fortune, July 6, 1987.
William H. Meyers, “Murdoch’s Global Power Play,” New York Times, June 12, 1988.
Roger Cohen, “Rupert Murdoch’s Biggest Gamble.” New York Times, October 21, 1990.
Richard Brooks, “Murdoch: A Press Baron Re-Born.” Toronto Star, September 12, 1993.
Elizabeth Jensen and Daniel Pearl, “One Dogged Lawyer Shakes Murdoch Empire.” Wall Street Journal, April 6, 1995.
New York Times story on the acquisition of Newsweek by the Washington Post, March 10, 1961.
It was early March 1961. A young John F. Kennedy was just months into his new presidency, “Blue Moon” by The Marcels was the No. 1 hit on the radio, and The Great Impostor with Tony Curtis had just opened in movie houses. In New York, Phil Graham, the 45 year-old publisher of the Washington Post, was in Manhattan on business. He had just written a personal check for $2 million to the Astor Foundation. The check was earnest money for an $8.9 million block of stock The Post would buy as part of its $15 million deal to acquire Newsweek, then the nation’s second largest weekly news magazine behind Time. The transaction marked one of those mid-20th century business deals that was changing the newspaper industry and signaling, in part, how big media would take form through the remainder of the century. For the Washington Post, the acquisition of Newsweek would become a major asset and would help make it become a much bigger and more influential player in news, information, and politics.
Phil Graham & Eugene Meyer holding 1st copy of the newly merged Washington Post-Times Herald, amid St. Pat’s celebration, 17 March 1954.
Founded in 1877, the Washington Post had grown from something of second-tier newspaper in a town that once had several. Over the years, the Post had been sold to a succession of new owners, not all of whom were focused on making it a good business or a good newspaper. In 1933, Eugene Meyer, a financier, bought the paper at public auction for $825,000. Meyer set about to turn around the failing enterprise and to run a respected paper. In March 1935, he published — on the front page — his paper’s principles and standards for truthfulness and decency. By 1943, The Washington Post circulation was 165,000 — more than triple its 1933 figure. Advertising also tripled. Then, in 1940, a young lawyer named Phil Graham, married Meyer’s daughter Katharine. A few years later, in 1946, at the age of 31, Graham dropped his law career and became associate publisher of his father-in-law’s newspaper. Within six months he was publisher and by 1948, after a gift from his father-in-law, he and his wife Katharine held all of the Post’s voting stock.
Phil Graham, rising newspaper man, on Time cover, 1956.
Graham then bought out one of his competitors, the Washington Times-Herald in 1954, becoming the city’s only morning paper.Within two years of that deal, Graham had doubled the Post’s circulation and he was featured on the cover of Time magazine. He had also acquired two television stations. In 1959, after Eugene Meyer died, Graham became president of the Washington Post Company.
The Newsweek Story
Newsweek, originally launched under the name News-Week in February 1933, was founded with the help of a group of wealthy stockholders that included Ward Cheney, of the Cheney silk family; John Hay Whitney, owner of the New York Herald Tribune; and Paul Mellon, of the industrial and banking Mellons. Other industrialists, investment bankers, and corporate lawyers were also added to the magazine’s stockholders in later years. News-Week’s first issue in 1933 featured seven photographs from the week’s news on its cover. By 1937, it merged with another weekly journal named Today, founded several years earlier by former New York Governor and diplomat Averell Harriman and Vincent Astor of the prominent Astor family. Vincent Astor became News-Week’s chairman and its principal stockholder. Malcolm Muir took charge as editor-in-chief and President, changing the news magazine’s name to Newsweek, abolishing the hyphen.
1st edition of News-Week, 17 Feb 1933, featuring its '7-photos-of-the-week' format, later abandoned as confusing to readers.
Newsweek was profitable from the early 1940s. During World War II, it put out a pocket-size special edition for the troops in Europe, and at war’s end in 1945, published its first international editions in Tokyo and Paris. Through the 1950s, Newsweek enjoyed increasing circulation. Vincent Astor, with a stake of 59 percent, died in 1959. With Astor’s death, rumors began to circulate about the family’s interest in selling the magazine. Malcolm Muir, Newsweek’s president and editor following Astors’ death, was among those inter- ested in acquiring the magazine.
Genesis of a Deal
Meanwhile, a group of Newsweek’s journalists in its Washington and New York bureaus were concerned about the fate their magazine. They worried that it might fall into the wrong hands. Among those concerned was Ben Bradlee, Newsweek’s bureau chief in Washington. Bradlee had hoped that one of the major newspaper families might be persuaded to buy Newsweek – publishers “who ran newspapers of conscience and quality,” as he put it; publishers such as Joe Pulitzer of the St. Louis Post- Dispatch, Marshall Field of the Chicago Sun Times, or Phil Graham at The Washington Post. Bradlee, in fact, had once worked for Graham at the Post but knew him only slightly. Yet as Newsweek was then heading for an uncertain fate, Bradlee would initiate a meeting with Phil Graham, urging him to buy Newsweek. Writing in his 1995 book, A Good Life, Bradlee recalls the meeting he had with Graham:
. . .One night, after a bad day of brooding, and a few shooters, I called [Osborn] Elliott in New York [Newsweek's managing editor] and told him I was damn well going to pick up the phone — it was almost 11:00 p.m. — and call Phil Graham right then. It was the best telephone call I ever made — the luckiest, most productive, most exciting, most rewarding, totally rewarding. He answered the phone himself. Ben Bradlee, then chief of Newsweek’s Washington bureau, became a player in the Washington Post / Newsweek deal.I blurted out that I wanted to talk to him soonest about the Post buying Newsweek. He said simply, “Why don’t you come on over? Now.”
I was sitting in his living room ten minutes later. I stayed there talking, and trying to answer his questions — mostly about people, who was good and who was bad and why — until just before 5:00 a.m. I was back at 9:00 a.m., as ordered, with fifty pages of thoughts, “just stream-of-consciousness stuff. . . No one’s going to read it but me,” Graham told me. I scarcely knew Phil Graham. . . .
Ben Bradlee writes about the Newsweek deal, among other things, in his 1995 memoir.
Essentially my pitch to him was that Newsweek could be made into something really important by the right owner, if only the right people were freed to practice the kind of journalism Graham knew all about; that Newsweek was about to be sold to someone (whomever) who wouldn’t understand or appreciate its potential; that it wouldn’t require a lot more money. . . maybe a few thousand bucks worth of severance pay, and maybe Newsweek was just the right property for The Washington Post to make a move toward national and international stature. He got my message long before I was through delivering it, and all he wanted to talk about was the cast of characters [at Newsweek]. Who was who — in the Washington Bureau and in New York, on the news side and on the business side. God knows what I said, I was so turned on by his interest and enthusiasm. Luckily, there is no written record of this conversation, and the fifty-page memo I gave him at nine that morning has mercifully disappeared. I’m sure I was indiscreet; he encouraged indiscretion with indiscretion, and before I left he was using ‘we’ and saying ‘could.’
Bradlee thereafter became part of Graham’s inner group of advisers on the deal, and traveled to New York with Graham as the deal unfolded. Among others bidders for Newsweek was the magazine’s then Chairman Malcolm Muir, 75, who hoped to enlarge his family’s 13 percent holding in the magazine with the Astor shares. But after Phil Graham heard that bidding for the foundation stock had held around $45 a share, he raised his bid to $50, which was then about 24 times the magazine’s earnings per share. Some back home at the Post worried about the amount of money involved, and thought it could better spent to improve the Post’s operations and quality. “Though the official selling price for Newsweek was $15 million, in the end no more than $75,000 really changed hands. It was one of the great steals of contemporary journal- ism.” -David Halberstam And in addition to the bidding for Newsweek by Muir, others with considerable resources were also involved, including Doubleday, the book publisher, and Sam Newhouse, the newspaper mogul. But in the end, Graham’s offer of $50 a share proved the winning bid as the Post took the prize.
It turned out that the Post had struck a very good bargain. At $50 a share, the total price for the deal appeared to be something like $15 million. But Newsweek had $3 million in cash in the bank, and owned half interest in a San Diego TV station, which the Post later sold for $3 million. In the end, the real price for the acquisition was closer to $9 million, with Prudential Insurance Co., one of the backers, carrying most of that. In addition, Newsweek’s books looked very promising for the road ahead, as the magazine had average $15 million a year in profit for the last thirty years. “Though the official selling price for Newsweek was $15 million, in the end no more than $75,000 really changed hands,” wrote David Halberstam in his book The Powers That Be. “It was one of the great steals of contemporary journalism.”
Newsweek in Nov 1960, prior to the Washington Post acquisition.
Phil Graham, meanwhile, went on to expand the reach and influence of the Washington Post Co. and its assorted enterprises. In 1962, Graham helped establish a 50/50 Washington Post-Los Angeles Times news service formed to broaden and syndicate the reach of both papers. The service soon boasted a strong Washington bureau as well as global coverage with a range of notable writers. Graham also went looking for additional writing talent, and in October 1962 he signed up New York Herald Tribune columnist Walter Lippmann, who would also write columns for Newsweek and the new wire service. A month later, he added another well-known writer, Joe Alsop. The news service by then had signed up 33 U.S. dailies with the British papers, the London Sunday Times, Manchester Guardian, and London Observer coming on later. Back at the Washington Post, Graham had raised salaries, increased circulation, and beat rival Washington Star in advertising. But Phil Graham was in trouble.
Loss of Phil Graham
Graham, for some years, had been an undiagnosed and untreated manic-depressive, and in the early 1960s, his condition worsened. In August 1963, he took his own life. The event devastated the Post and was seen as a major loss. Sam Newhouse offered Katharine Graham $100 million for Newsweek, but she wasn’t selling. Gradually, following Phil Graham’s passing, his wife and Eugene Meyer’s daughter, Katharine, also known as Kay by colleagues, assumed the mantle at The Washington Post, including Newsweek. Two years after her husband’s death, in 1965, Sam Newhouse offered Katharine Graham $100 million for Newsweek, a substantial premium over what Phil Graham had paid of it. But Katharine Graham wasn’t interested in selling. She was interested in growing her company. Along the way, she pumped more money into Newsweek, eventually making it a more robust player in the weekly competition with Time and U.S. News & World Report.
Vietnam War story, 13 Feb 1969.
Cleveland's first black mayor featured, April 14, 1969.
30 July 1973 edition, after the Post had broken Watergate story.
During the 1960s, Newsweek distinguished itself from Time by appealing to younger readers and focusing on two big stories of the era: race relations and the Vietnam War. In July of 1963, Newsweek had already been the first major news magazine to put the face of an unknown black American on its cover. But in November of 1967, the magazine ran a civil rights cover story and editorial. Newsweek‘s then-editor Osborn Elliott, would later say the cover story questioned traditional notions of journalistic “objectivity,” calling it the first example advocacy journalism by any major magazine.” In 1968, following the Tet Offensive in Vietnam, Newsweek again offered its views, this time calling for de-escalation of the war and eventual U.S. withdrawal.
Back at the Washington Post, Kay Graham was also focusing on her newspaper. In August 1965, she lured Ben Bradlee away from his Newsweek bureau chief post to become a deputy managing editor at the Post, with promises of bigger things to come. By 1968, Bradlee became executive editor with Kay Graham’s backingNewsweek became a leader in advocacy journalism.. He initiated change at the paper early on, including the January 1969 creation of a culturally and politically attuned “Style” section, replacing a dated “For and About Women” section. Bradlee and Graham would proceed to lead the paper into the thicket of some of the next decade’s most important issues, publishing the Pentagon Papers in 1971 — a secret history of the Vietnam War — and winning a Pulitzer prize for the paper with its 1972-73 coverage of the Watergate scandal that led to the resignation of President Richard Nixon. The Post’s coverage of these and other issues would also show through to some extent in Newsweek’s coverage.
Today, the Washington Post Co. is a major media concern with wide ranging newspaper, radio, television, magazine, educational services, and internet holdings. Newsweek now offers 12 editions, appearing in more than 190 countries, with an audience of some 21 million readers. According to Washington Post Co., Newsweek has won more National Magazine Awards and more Loeb Awards than any other newsweekly.