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Buying the Dream

Time Warner merging with AOL is the old story of the Titanic and that iceberg—they’re still scrambling for the lifeboats.

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THE MEDIA BUSINESS 2001


Steve Case (left) and Gerald Levin of AOL Time Warner.  

Here’s my Time Inc. (before Warner and before AOL) snapshot: If you looked a certain way, had a certain sort of Ivy League, good-sport-jacket, furrowed-brow assurance, the elevator crowds would really part for you at the Time Life Building. The secretaries and salespeople and whoever else worked there expressed an almost physical deference to the true Time man. And you always knew who he was, as clearly as you would a priest among the functionaries at the Vatican. If you were this person, your sense of ownership over the company was total (one reason, perhaps, why so many of these people were still holding on to shares when the price fatally collapsed last year).

Now my (pre-Time) Warner moment: Just a few blocks away from the Time Life Building, at the Warner Communication headquarters in Rockefeller Center, I’m in the service elevator with a good friend who’s an exec there. While doing an office redecoration, this exec conceives the idea of substituting fake art for real art. So, one night, after hours, helping to remove the real art, I become an accomplice to looting the company. Oh, yes, and Robert Redford is on the elevator with us.

In the former, you had a company of self-satisfied, head-in-the-clouds, superior types, for whom work was more avocation than vocation (no one was really in it for the money). In the latter, a company, happily, of thieves (I use the term with some affection) and celebrities.

The idea was that in combination, Time would become more aggressive and Warner more classy. Synergy.

Of course, that was not the result. But some sort of hybrid was definitely created. It wasn’t really a company, not with clear purpose and designated people in charge. Rather, it was a kind of arena, or forum, or congress, from which emerged, out of deep conflict and great payoffs and mind-numbing meetings, a kind of consensus that became, for better or worse, the nation’s media.

Arguably, this became the great New York company, and, also arguably, it was doomed from the very beginning. Not only was it not a very good business idea (the share price languished during the nineties), but it seemed to hold together only in anticipation of further, greater, more opportunistic power plays (Yugoslavia searching for its Tito). Indeed, the titular chief, the strange, Nixonian Jerry Levin (the Time exec who aligned with Warner’s chief to oust the designated heir from the Time side), seemed to stay in power not so much because he controlled things but because he created more fractiousness and confusion. Through the nineties, he masterminded a succession of deals that nobody could understand, and in 1996, added Ted Turner and CNN to the mix.

And then, in his most stunning power move, or most incredible act of hubris and grandiosity, or just as the next step in the corporate die-or-keep-moving handbook, he merged the company with AOL. The cocky Ivy Leaguers (grown weary and depressed through the nineties), the Hollywood thugs (many of them alter cockers now), and the ever-more-furious Turner were married to some suburban database hucksters from Dulles, Virginia. And in one of those through-the-looking-glass moments, virtually everyone said that what would shortly become recognized as the worst deal in business history was the best deal.

In fact, it turned out to be not just the worst deal but clearly the culmination of a long road of loopy and disastrous deals.

Possibly never before has there been such an existential moment of corporate self-examination (at least one not performed by lawyers).

Everyone who has ever worked for one or all of the various constituent companies seems to have not only an opinion about what crucial and elemental human and organizational flaws brought AOL/TW to this sorry moment, but an amount of awe and humility: We have all been part of this great fall. And this isn’t just the grumbling peons. The higher you go in the company, the more time executives seem to spend dwelling on this humbling thing that has happened and on their own flaws and culpability (and equally, on the flaws and culpability of their colleagues).

Everybody seems to have come face to face with a stark and potentially liberating reality: Here, too, the stupids have been in charge.

And so now a process has begun: The cable company is being spun out, the book company is getting ready to go, music is on the block, and AOL will surely go at the earliest offer. Sober men will chip it down. Everything will be reversed out. Although it is unlikely that those serious fellows in good sport jackets will reappear and once again have the elevator crowds part.


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