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

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СКАЧАТЬ in a nutshell, defined the challenge of the modern media. How do you take our content—a kind of water by any other name—and efficiently get it into people’s homes? (It used to be that you wanted to get in into their heads—but the home offered the truer point that you really didn’t have to think about, or even register, content for it to be part of your life.) And how do you get it into people’s homes so efficiently that it becomes a transparent part of their daily activities? (Media ought to be on the unconscious level of water and electricity.)

      Owning the pipes was the key.

      Owning pipes was the millennial secret (as plastics had been the secret circa 1967 offered to Benjamin Braddock in The Graduate).

      Literally, there were oil and natural gas companies in the U.S. emptying (and one would assume cleaning) their pipes and filling them with the fiber-optic cables that, shortly, would glut the market.

      A water utility, with only a little critical interpretation, is therefore the same as a media company—indeed, let us call it a media utility.

      This wasn’t just French sophistry.

      Everybody who was rising in the media business was obsessed with distribution. HOW WE GET OUR PRODUCT TO OUR CUSTOMERS.

      This reflected two issues:

      There was the example and threat of cable television. Nobody took cable television seriously in the seventies. It was exclusively a distribution business—“a pure distribution play”—and everybody thought the effort and cost was going to be way too great. What’s more, you already had free television. So why would you choose pay television over free?

      The fact that everybody turned out to be wrong here, that consumers would pay, and that owning the pipes meant you controlled what went into people’s houses, was a vast shock to the media system. The paradigm, and the metaphor, changed. Instead of a media menu, with consumers selecting the radio and television and magazines and books that appealed to them, now the idea was a version of force-feeding. Could you be the doctor administering the nutrients and medication that flowed through the media IV?

      At the same time, we were entering a further new paradigm in which all of the capital and technological barriers to controlling distribution began to fall, in which we were becoming a world of broadband and Napster. That made it all the more imperative, and all the more valuable, to be able to argue that you were, somehow, going to be able to control distribution and maintain control, or at least as much control as it was possible to maintain.

      And then there was the second issue: the investment bankers. In addition to controlling the business language—the basic means of business expression without which you could not communicate with other businessmen—investment bankers also controlled the market. You could not sell something without bankers.

      Now, if you controlled distribution, or if you could merely argue a reasonable case that you would be able to control distribution, then the bankers would certify an altogether different type of pro forma than if you were just a mere content purveyor. The difference was a difference in scale. Scale. After covering fixed costs, how do we grow exponentially with only incremental new expenditures?

      That’s scale. Bankers would say: “How do we scale this? I don’t see any scale here. How do we show scale?”

      If you controlled distribution, you had scale.

      And if you had scale, then the value of your business—what someone, some investor, or some other business that might acquire you, would pay you for every dollar you earned (the “multiple”)—increased geometrically. At least according to the bankers.

      The fact the Messier’s and Compagnie Générale des Eaux’s water pipes had nothing to do with media was beside the point. He’d nailed the metaphor.

      There were two other big themes in the rise of Jean-Marie Messier and the transformation of Compagnie Générale des Eaux: national pride and personal vanity.

      Neither should be underestimated.

      Each European country had its media barons who could play on an international stage. The Germans had Bertelsmann. The Italians had Berlusconi. The English had Murdoch (however strained this relationship might be—and, even though he was actually an Australian). Being a media power was something like being a nuclear power: It brought you to the table; you were a player in the world. Another world now existed which was made of digital networks and cross-culture brands and, largely, the English language. You didn’t want your country to not have a stake in this.

      So Jean-Marie came into the media-mogul game not only with the right metaphor but with lots of French capital.

      And then the vanity: What was required in the transformation of Compagnie Générale des Eaux was someone who was willing to gamble very safe and stable wealth and power in a business of fathomless risk and low reward. Someone who valued the reward by a different measure than just a financial one. You had to understand the value of personal exaltation—of being a powerful individual and puffed-up popinjay on the world stage.

      Now, possibly the vainest thing a human being can do is go to Hollywood. More precisely, the vainest thing a human being can do is go to Hollywood with money. A step further: The vainest thing a human being can do is to be a foreigner who goes to Hollywood with money. You are, ipso facto, conceited and deluded enough to assume that while all other foreigners who have gone to Hollywood with money have had it ignominiously taken from them, you will not.

      It is possible, perhaps, that Messier was thinking something like, Lightning doesn’t strike twice in the same place. Considering that his vehicle of going to Hollywood was a vehicle that, previously, had been the instrument by which another ludicrously vain pretender had been fleeced.

      This was Edgar Bronfman Jr., who, in the same way that Messier was trading his stable and conservative water business, had cast aside Seagram’s, his family’s old-hat liquor business (with a big and lucrative interest in chemicals which Edgar sold to finance the Hollywood adventures), for the high-risk entertainment business.

      The Bronfman story is an unexpected and extreme tale of paternal love. A father, Edgar Bronfman (along with his brother, Charles, the uncle, who must really be pissed off) acts as a good, if passive, steward to a great family fortune based around the Seagram’s liquor company. He has a son, Edgar Bronfman Jr., with few demonstrable business talents or career focus. Rather than go to college, Edgar Jr. goes out to Hollywood, begins a long association as a friend to movie stars, and, briefly, considers a career as a songwriter (he writes “Whisper in the Dark” for Dionne Warwick) before being given unspecified duties in the family business. Then, placing filial regard above profit motive, the father allows the son, now in his mid-forties and still keenly infatuated with Hollywood, to redirect the family’s historic business interests. The company liquidates its enormously profitable holdings in the chemical industry and in 1995 acquires, from the Japanese, Universal Studios, and then goes on to buy a substantial interest in the music business. After vastly overpaying for these acquisitions, Edgar Jr. engages in several years of almost nonstop mismanagement during which many of his Hollywood friends, most notably Barry Diller, take great advantage of him. The family fortune is not only compromised, but the family is suddenly the object of great ridicule—almost as hurtful as great financial losses. Father and uncle direct Edgar Jr. to sell all of the family holdings.

      Edgar Jr.’s single victory in the entertainment business is managing to sell his company, at what seems like a significant premium to its worth (although at a significant loss for the Bronfman family), to Jean-Marie Messier. (“The best thing about owning an entertainment СКАЧАТЬ