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Si Newhouse’s Dream Factory

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David Remnick, 1993.  

“There’s no place on Earth like this,” Carter tells me. “There’s no place where you’re given the resources you need to do what you want to do and also given complete freedom to do it.” A short time ago, Carter says, he offered Newhouse some possible economies. “I tried to bring up money with him,” he explains. “I had some ways of cutting expenses around photo shoots. He just didn’t want to hear it. He got all uncomfortable. Si said, ‘Just make sure there’s nothing that can hurt the magazine.’ In my lunches with Si, you wouldn’t know that there’s anything different from 2002, 1996, 1992.”

Newhouse’s publishers represent an altogether different part of his personality—a darker, hungrier, more aggressive side. Newhouse sometimes refers to his publishers as killers. For years, Steve Florio, brash, crass, and, he said, blue collar, was the lead killer, “the Godfather, the Samurai, the leader, the warrior,” as he wrote in a book proposal. He was also a liar. In 1998, a Fortune article documented a roster of casual biographical embellishments, which taken together made him unemployable elsewhere. Newhouse defended him: “He tells just enough of the truth.” Many at Condé Nast were appalled by Florio’s “brilliant ridiculousness,” as one put it. But Newhouse has a kind of Spidey sense. “He so embodies the business and he’s so involved in it, it’s like an organism that is part of him,” says James Truman. “As a result, he has had a precognitive notion of what’s going to unfold and what the company needs.”

In 1994, after Florio’s disastrous run as publisher of The New Yorker, Newhouse promoted him to CEO, a shocking choice that proved visionary. At the time, Florio made a bold prediction to a meeting of Condé Nast’s publishers. “This company has always been about the editors,” he told the group. “Now you’re all going to be superstars.” And he was right. Florio’s publishers became stars with as much claim to “Page Six” as the editors. Ron Galotti, who was publisher of several Condé Nast magazines, dated models and later Candace Bushnell, who turned him into Mr. Big in Sex and the City. Richard Beckman, a former British footballer and a Florio protégé, became, if not famous, notorious. One tipsy evening in 1999, Beckman, then publisher of Vogue, smashed the heads of two young female Vogue staffers together, suggesting he wanted them to kiss. One of the girls, says a friend “looked like she’d been in a car wreck.”

At another company, the incident would surely have ended Beckman’s career. Newhouse, though, loved the kingdom’s rambunctious egos, especially if they produced, and Mad Dog, as Beckman was known, performed well. Newhouse stood behind him, paying a reported seven-figure settlement to the girl, and eventually promoted Beckman to head of corporate sales.

Newhouse could afford the settlement. Condé Nast rode the boom like few other magazine companies, and its business side sparkled. “For the next ten years, the company was about sell, sell, sell,” says one insider. Florio pushed Condé Nast into the top rank in number of ad pages sold, while constantly bringing home stories of shoving rates down clients’ throats. Newhouse knew the stories weren’t entirely true but loved them anyway. For years, Newhouse raised ad rates about 5 percent annually whether or not a magazine’s circulation increased. Last summer, the company raised rates by another 5 percent. “We’re a company that wants to be admired, not liked,” explains one publisher.

As harsh a manager as Newhouse could be, the upside for publishers was much greater. “You were selling ads for some shit-ass magazine, and now you’re the richest person in your community,” explains one former publisher. “If Si likes you, you will have a life you never imagined you could have.” Newhouse turned a publisher into an expense-account millionaire, flying first class and staying in the best hotels. The company provides key employees no-interest or low-interest mortgages. Publishers can receive a clothing allowance; two club memberships, one in town and one out of town; and a $1,500-a-month leased car. It wasn’t entirely wasteful. Newhouse wanted clients to understand that the Condé Nast brand was as elite as theirs.

In his own life, Newhouse doesn’t need perks. He’s appeared on the Forbes list of wealthiest Americans for 28 years, since its inception. In the Newhouse family, wealth doesn’t translate into worthiness. To Si’s father, one proved oneself through work.

Several years ago, Florio had walked into his office around five in the morning, the time Newhouse usually arrived.

“I know why I do what I do,” he told Newhouse, referring to the long days. “I have two kids to put through college.”


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