Wednesday, May 29, 2013

Take a Load Off, Barry (or: That Time Diller Played Everyone on Newsweek, Including Himself)

Bet "on the eve of Newsweek's sale" are six words you didn't see coming for at least another decade, if that, the more likely possibility being that the entire thing would just shut down at the hands of a benevolent mercy-killer named Diller. And yet, here we stand, on the eve of Newsweek's sale, eagerly awaiting the identity of Barry Diller's latest long con sucker buyer, if we aren't counting Barry Diller himself.

As we wait to find out who the mark is, we're digging into the old mailbox to tell a story of a tip that's never been followed up on. It's a tip that's been shopped around to other media reporters in town, who haven't been able to follow up on it either, for any number of reasons:

(A) It's a loony conspiracy theory about a media company, and thus, the stakes are too low for anyone to actually give a shit and blow whistles.
It's a great tip that's virtually impossible to confirm, and not worth the trouble.
It's a great tip that's actually impossible to confirm, and not worth the trouble.
When fit together, the entire thing makes so much sense and is such a "Duh" moment it's almost not newsworthy, except for the part that involves whether or not IAC shareholders were deceived, and most of the principles of this story have the vested interest of IAC shareholders, and thus, aren't going to say shit (see options B and C for further elaboration).

But it's Wednesday, and after tomorrow, the number of people who will care about this* is likely to drop into the negative digits. Let's run the beat.

Remember, this is just a tip we once received, and nothing we heard was confirmed. That said, for narrative purposes, you can just assume this is all true.

1. Sidney Harman was a proxy for Barry Diller to buy Newsweek.
Barry Diller had to buy Newsweek through a proxy because his seat on The Washington Post Company board put him at odds with a conflict of interest: Either he had to step away from the sale, or resign his seat on the board. Diller could not help sell Newsweek to IAC/himself and objectively claim to have both parties' best interests at hand. Diller could've stepped down—he sits on plenty of boards, and The Washington Post Company isn't exactly the prom queen of corporate vanity projects—but he would have lost his seat at the table for nothing if the sale fell through.
3. Among all the members of The Washington Post Company board, Barry Diller was most in favor of the sale of Newsweek, and most in favor of the sale to Sidney Harman. Lally Weymouth—daughter of Katharine Graham, former Special Diplomatic Correspondent for Newsweek, current Senior Associate Editor of the Washington Post—on the other hand, was vehemently opposed to the sale.** As someone who had both professional and emotional ties to the magazine, she did not want to see it go to someone who had plans to lobotomize it with the fuckery of New York City media value set that Tina Brown would later instill in it. Finally, Don Graham—"the nicest pushover who ever ran a business," we're told—thought Diller was a great businessman, and trusted him.
4. Diller was a great salesman, and not a great businessman. Because Diller sold Harman on Newsweek, and sold The Washington Post Company board on the sale to Harman, in order to get his hands on it. Being a great businessman would've involved leaving Harman with his red-and-white-ink stained dick in his hand, and Diller is a fucker, but he's not a motherfucker. Lally Weymouth, who hasn't spoken to Diller since the sale, might argue otherwise.
5. As part of the contract to purchase Newsweek from The Washington Post Company, Sidney could not sell the brand for two years.
4. That agreement was reached on July 15, 2010. Sidney Harman was announced as the new owner of Newsweek on August 1, 2010. The sale was made official on October 1, 2010.
5. Why Sidney Harman? Why not? Harman was the perfect proxy buyer for Diller in that he was an old man who wanted to make a grand gesture in the twilight of his life, and regain some cultural significance in his dying years. He would front Diller the purchase, and eventually unload it on Diller when the time came. Barry Diller, a man of his word, would not disappoint.
6. Diller was always set to inherit the brand from Sidney Harman after two years. But Harman's health deteriorated sooner than anyone expected.
7. We now arrive at the question of Diller's motivations. A shrewd businessman, why would he buy something as debt-saddled and seemingly hamstrung by the direction of its industry for its remaining days? And why would he do it in such a secretive manner?
8A. Barry Diller would move in secret because Barry Diller answers to shareholders, who would see an out-and-out purchase of Newsweek as batshit insane, and would be none too happy with it. A merger presented a less volitale way to acquire the property. 8B. Barry Diller didn't want Newsweek as a property. He wanted it as a brand. The Daily Beast—his most serious original content operation right now hold (the patently unserious) College Humor—was flailing. And the dentist-office brand cachet that Newsweek held is exactly the kind of thing that could help The Daily Beast. From the tipster: "At one point, Diller's goal was to rename IAC to Newsweek and Co."
9. When Harman found out he was dying—and, oh yes, he was secretly on dialysis for five months—the two parties announced the merger of The Daily Beast and Newsweek so his family could easily pass off the brand without disrupting either party. After Sidney Harman died in April 2011, his family told reporters that "The Harman family is totally committed to Newsweek and its future." Two years and nine days after the initial agreement was reached, Barry Diller indeed took full ownership of Newsweek simply by way of the Harmans "ending" their investment in the property. So, yes, they were committed in the sense that they were committed to Barry Diller honoring his side of this deal.
10. Everyone knows Tina always wanted to get her hands on a print magazine again. Diller, however, had to fight her on this. Diller sought out a number of people before her to edit Newsweek, including Peter Kaplan. But anyone with a working brain knew Tina would present problems, as would running two categorically different publications (as, technically, a singular entity) in the same office. After not finding anyone for the job after a not-great-search, it was generally agreed that one person needed to run both shows. Tina's reluctance was simple: She fancied herself a digital maven, and didn't need this oldfangled print publication getting in the way....unless she had final cut on everything but shutting it down. What Diller didn't plan on was Tina spending the brand equity of Newsweek on The Daily Beast, and ruining it, thus rendering his purchase null and void.
11. "As someone who worked for her, I can assure you, Tina is bat shit [sic] crazy." That was just a line from my correspondence about this. I enjoyed it.

So, if this is true, you can probably grasp the takeaways pretty quickly: First, that Diller fucked both The Washington Post Board and fucked with IAC shareholders. Next, that Diller always ended to put Newsweek down by way of The Daily Beast. And finally, that Diller's confidence in Tina Brown is probably waning after all of this, and it's best he just rid himself of the stupid ass mess he got himself into to begin with.

What's funny is that Diller's plans weren't even so terrible! This is a man who wanted to save a publication, make a less-regal publication regal, give an old man some thrills in his dying days, help The Washington Post Board unload debt, and make everyone a winner in the process. The problem is that attempting to do this in public would've been problematic, because, for one thing, the hubris it'd take to think you can make everyone in this situation happy and come away the big hero and winner is effectively the kind of banging one's dick on the table so hard as to break the boardroom in half. For another, people would've seen it as patently ridiculous, and gotten in the way. Rather than deal with those small minds, Diller—who knows how to run a good play and a long con—went around everyone to execute his machinations. And this is the hilariously sad result.***

[*Who aren't the kind of IAC shareholder that trusts Barry Diller about as far as they can throw him, after brunch, no less. In which case, those people might want to care about this a great deal.
**Media reporters, this is the part where you start to email Lally Weymouth.
***Assuming all of this is true, of course. In the situation where this isn't assumed to be true, it's simply sad.]

Tuesday, April 23, 2013

What Happens When Adam Davidson Goes On Vacation (or New York City: Cheaper For The 'Professional Class')

What happens when insidious Planet Money host and New York Times Magazine columnist Adam Davidson goes on vacation?

They replace him with Catherine Rampell, who—she’ll tell you herself, in a lede—is “an educated young woman who loves her job, sometimes gushingly, occasionally annoyingly.” You don’t say!

She also, apparently, loves Davidson’s job, given the way she’s subbed in for him while on vacation. Take for example this week’s NYT Magazine economics essay, titled Who Says New York Is Not Affordable?

Just like the previously linked essay from earlier this month, Rampell opens up with an anecdote about her own difficult life:
One of the first things you learn when living in New York is that what qualifies as wealthy somewhere else seems barely middle-class here. On the Upper West Side, where I live, it’s hard not to feel as if Manhattan is impossibly expensive for young professionals. The average nondoorman, one-bedroom apartment in the neighborhood rents for about $2,500 a month. Oatmeal-raisin cookies at Levain Bakery cost $4 each. A pair of sensible, unstylish walking flats from Harry’s Shoes can set you back $480. I suppose, by comparison, that the $198 chef’s menu at Jean-Georges doesn’t sound so ridiculous.
Rampell goes on to extoll the virtues of Manhattan not for the “rich,” but for“professional-class workers.” No, really:
Professional-class workers who like to moan about the cost of living in New York — and I’m including myself in this group — don’t realize how spoiled we are by both variety and competitive pricing. Truthfully, things seem more expensive here because there’s just way more high-end stuff around to tempt us, and we don’t do the mental accounting to adjust sticker prices for the higher quality.
Yes: Catherine Rampell invented a class of people in New York last Sunday. Which would be impressive on its own, but then there's the label she affixed to it, one that implies that a certain station of wealth capable of drawing the line in the sand for those who are worthy of being deemed “professionals.” Which, logic would follow, makes everyone under that economic station unprofessional (surely, some of her lesser-cash rich NYT colleagues would enjoy this).

You can practically hear her sigh with boredom when she gets to the How This Affects The Poors section of her piece in the second half, which is actually right at the pagination mark—for anyone reading online, you have to get to the second page to find out what poor people might have to do with all of this. This is not what we call ‘burying the lede,’ mind you, because Rampell’s M.O. gives zero fucks about poor people, who are less a lede than a obligatory aside:
There is, however, an ominous flip side to Handbury’s findings. When you look at the cost of living for low-income people based on their tastes and preferences, New York’s poor turn out to be even poorer than you think. According to her research, a household earning $15,000 a year faces approximately 20 percent higher grocery costs in cities with relatively high per-capita income. The same is very likely to be true for other essentials, like clothing. Real estate is most crushing for all but those lucky enough to get into subsidized housing. For the poor, it is impossible to unbundle apartments from all the perks that help drive up costs.
Okay, this is kinda-good, right? Except, not: Rather than explain why this is, or what we can do to fix it, Rampell explores why New York City feels like it’s changed so much the way a character on the final season of Friends might cry about the West Village losing character:
I began to realize why, in part, New York seems so wealthy. It’s not so much that the city has been colonized by hedge-fund millionaires (though it often feels that way) as it is losing its lower classes.
And then there’s her capsule summary, which, I mean,
Deep thoughts this week:
1. New Yorkers don’t shop like other Americans.
2. Which is good news for some and bad news for others.
3. Hello, Houston!
Again, this is either some of the best trolling or dumbest writing in the history of ostensibly utilitarian economics columns. Not that there’s anything wrong with Rampell trying to steal Adam Davidson’s job, or that he shouldn’t have a job stolen from him. But Davidson’s writing is, to his credit, insidious because employs subtlety—something his Koch crony colleagues (e.g. Megan McArdle) are far less adept at—or is just boring enough to convince most This American Life listeners to deem him an important presence in their lives without actually listening to anything he says.

Rampell, on the other hand, doesn’t have time for subtlety, which makes her marginally less insidious but also far more easy to identify as straight-up stupid, awful, and wholly mean-spirited. It also makes her far more entertaining, and thus, capable of holding a far more captive audience (that won't actually listen to her or read between her lines) than Davidson ever could. Which makes her dangerous to Adam Davidson, though in an ideal world, less dangerous to the marketplace of ideas (that's having a lot of—maybe too much—faith in the people that read The New York Times Magazine, though). As such,

Deep thoughts this week:
1. Catherine Rampell is an Adam Davidson crony.
2. Adam Davidson is the perfect model for nu-economists who want media careers because
3. Adam Davidson and Catherine Rampell have demonstrated that there's no money or fame in writing about or for anyone but those who can bestow in upon them.