Tina Brown has always had a thing for older men—years ago, she’d married one. There was S. I. Newhouse, her admiring boss and patron at The New Yorker and Vanity Fair. There is Barry Diller, funding her current buzzy, money-losing Internet venture, the Daily Beast. And here she was again, on the verge of tying the knot. This time the suitor was Sidney Harman, a 92-year-old audio-equipment magnate—a young 92, he hastens to add: “I know I don’t look or act my age.” Looking for another, perhaps final act, Harman had bought Newsweek magazine for $1 (and substantial liabilities)—the deal was announced August 2—and he needed someone to run it. He’d been searching for a partner for the past four months, and now, at last, he seemed about to win over Brown, once the most glamorous and sought-after editor in the city. Brown, too, wanted a new, expanded act. And there were, or at least everyone said there were, endless synergies between the Daily Beast and Newsweek, which would merge in the deal to get Brown. The newsy Beast needed serious ballast, a big mainstream identity—about the only asset the failing Newsweek still had—while Newsweek needed to make peace with the modern digital world. But there were a couple of hitches, as there would be, given such a complicated union of companies and missions and egos.
So, a couple of months ago, Brown and Harman sat down in New York with Barry Diller, the principal owner of the Daily Beast as well as a stable of workhorse websites. For Brown, it was “awkward,” according to a person familiar with the meeting, like a daughter who suddenly discovers she has two dads. There was Harman, the warm, white-haired retired stereo magnate with the politician wife and the academic appointment, and Diller, the bald and fit swashbuckling billionaire of the old style, with a Hollywood past, a fashion-designer wife, the biggest sailing yacht in the world, and an obsessive desire for control—he dictated the look of the window shades in his beautiful, bulging Frank Gehry building on the West Side Highway.
The three pushed through the awkwardness and, over several weeks, hashed out general terms—the idea had grown from Tina’s editing Newsweek to a joint venture, 50-50, combining the youthful Beast’s editorial momentum and the established magazine’s broad reach. As recently as two weeks ago, the egos and the deal seemed to fall into place. A top adviser to Harman crowed that Diller had agreed to let Harman run the operation day to day and would take an almost parental role—“a board-level kind of seat.”
Then, the weekend before last, Harman took a hard look at Diller’s proposed governance structure. He was in his Venice, California, home, modern and seemingly Cubist-inspired, with opulent views of the Pacific and politically correct solar cells on the roof, and he didn’t like what he read.
Inside the Daily Beast, Tina and her top lieutenants had been excitedly planning how they’d run the combined business. As they saw it, they were doing a lot more for Newsweek than vice versa. “Harman gets Tina to edit Newsweek, and he gets the momentum, metabolism, and talent of the Daily Beast,” as a person close to the Beast put it. And Harman would get to chip in as many thoughts as he liked. “Sidney clearly enjoys coming up with cover ideas and story ideas,” Tina later told me.
As Harman sat studying the proposal, the joint venture started to look like a takeover. True, Harman would be a CEO-like figure with day-to-day operating responsibilities, but it seemed to him like he was being squeezed out of his own deal. Stephen Colvin, the Beast’s president, would be Newsweek’s president. And according to the proposed governance structure, Tina wouldn’t even report to Harman but to an independent board. Even if the staff at the Beast had politely kept their dismissive attitude to themselves, the proposal made their feelings abundantly clear.
“Sidney wanted a structure where he could hire and fire,” says a person close to the discussions. Harman especially wanted to have a say in guiding the content—why else would you buy into a glamour business, even for a dollar? “Tina can live with it or hit the road,” said a person close to Harman. But that was exactly the problem. Under the proposal, Harman didn’t have the power to fire Tina or Colvin. “I didn’t buy this magazine to be hands-off,” Harman told me several weeks ago.
At bottom, Harman was looking at Diller as just an investor, a moneyman, which wasn’t exactly how Diller saw it. “Barry is happy to be in business with Sidney Harman,” says the person close to the talks. “But he doesn’t want to be part of a magazine that Sidney edits.”