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The Last Action Mogul

Barry Diller's lone-gunslinger style and his frenetic deal-making pace make him a role model for other media tycoons. But what does his empire really add up to?

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Here's my Barry Diller story: On a Saturday morning a long, long time ago, The New York Times Magazine sent me to interview Diller, then the chairman of Paramount Pictures ("He's the new 400-pound Hollywood gorilla," said Times Magazine editor and future movie producer Lynda Obst). I met him at the home of his then- (and now) consort, Diane Von Furstenberg -- a flocked-wallpaper apartment on Fifth Avenue overlooking the Central Park reservoir. In an open-neck shirt -- as bald at 39 as he is now, a sort of cross between Mussolini and Picasso -- and no socks, holding a large glass of juice and sitting in a massive upholstered chair, Diller said to me, shortly into our conversation: "You know, you can't say anything about my personal life." Most shocking was that the 400-pound gorilla had a whiny voice.

"Of course," I said, fumbling, "only to the extent that your personal life is relevant to the story." He was not only a megagorilla but, every rumor agreed, a gay one in what was still, in the late seventies, a highly homophobic business.

"No. I don't think you understand," he said in his discordant whine. "I would kill you."

(Note to libel lawyers: While I did not actually believe that he would kill me, I do not think anyone has ever spoken to me in exactly the same way before or since.)

After a horrifyingly long pause, he said, suddenly brightening: "Well, I understand Simon & Schuster a Gulf+Western-owned company, as was Paramount is going to be publishing a book of yours soon. I hear great things about it. We'd like to take a look at it at Paramount."

Imagining my film career, I called the Times Magazine that Monday morning and resigned the piece. In due course I found myself on a conference call with Michael Eisner and Jeffrey Katzenberg -- then Diller's lieutenants at Paramount -- asking me to explain to them what I had told Barry to get him so interested in my book and offering me a first-class ticket out to the coast. In short order, I was sitting out by Barry's pool in Coldwater Canyon -- just Barry and me and houseman -- as he talked in the most contemptuous language I had ever heard about the power elite of the movie business. This was dissing of an extraordinary order.

Oh, yes, he never did buy my book.

Still, for years afterward, I could do a parlor trick. I could dial Barry Diller's office number and he would immediately come to the phone.

While the threat and the embrace is pretty standard Hollywood business behavior, Barry's threats are legendarily more extreme and his embrace that much tighter. Most recently, his bear hug and bullying have been focused on Lycos, the Internet-search-engine company, where he managed to seduce its CEO and alienate (and attack) its largest shareholder. The public scorn he's heaped on David Wetherell, whose company holds Lycos's biggest stake, and his refusal to pay a penny more than he originally agreed to pay were not necessarily good business -- after three months of name-calling, the deal was terminated last week -- but they are pure Diller.

So is that it? Is it his forcefulness -- the I-will-kill-you clarity he brings to a situation -- that makes him one of the defining moguls of the age? The mogul's mogul?

Ronald Perelman, the chairman of Revlon and multibillionaire (a friend of mine is a friend of one of Perelman's former wives -- this is how I heard this), had, for a long time, only one unrequited desire: for Diller to pay attention to him. "Did he see me? Did he notice me?" my friend reports the starstruck Perelman's demanding to know as he passed Diller one day on Madison Avenue (Perelman and Diller are now frequent companions).

I bet that if you polled a cross-section of American businessmen about what other businessman they'd like to meet, you'd get a pile of requests for Diller.

While lots of his contemporaries (including his former subordinates Eisner and Katzenberg) are bigger moguls than he is -- businessmen and showmen who have built labyrinthine entertainment and information megalopolises far more powerful and influential than anything Diller has ever controlled -- it is Diller who is thought (second only perhaps to Rupert Murdoch) to have a preternatural understanding of the media business. "What do you think Barry is up to?" is never an idle question. What's more, there is an interest in Diller that seems to transcend business. I think people believe there's something pure about Barry; with a little critical interpretation, he is a kind of John Wayne, living by his own code in a world without ambiguity. There is the "win-win" and "getting to yes" style of negotiating -- and then there is the "my way or the highway" and "fuck you, buddy," style nowhere better exemplified than by Diller (he has lost numerous big deals because he draws a line in the sand). He has not compromised, not lost his soul.

On the other hand, he has not gained the world either. He is a mogul without portfolio -- a homeless gun. All of the media conglomerates he has reached for -- at Fox, he made a bid to become Murdoch's partner; he lost out to Viacom in the takeover of Paramount; he failed to pull off the merger of QVC and CBS, and then he was even pushed out at QVC -- have eluded him.

Now, at the un-Hollywood age of 57, he is involved in a deal-a-day drive (and what even he must perceive as a last-chance effort) to secure an empire.

So far, he has assembled a collection of media properties that either (a) are a hodgepodge that have no relationship to one another save for the fact that he can apparently afford them, or (b) are the basis of the first truly convergent media company.

His properties include the Home Shopping Network, the USA Network cable station, the Silver King collection of UHF television stations, the Sci-Fi Channel, Universal Television Group, the independent film studios Gramercy Pictures and October Films, Ticketmaster and the public-company Internet spin-off of Ticketmaster Online/CitySearch.

Other than when he's been trying to acquire the most classic of old-media companies (were a television network to become available at the right price, he'd no doubt want it), Diller portrays himself as the bridge between old and new media -- the link without which neither can succeed.

With great righteousness and verve, he has taken to the new-media conference circuit -- Spotlight, Jupiter, PC Forum -- where he has derided and mocked his Lycos nemesis David Wetherell in a particularly withering Diller fashion. It is the sort of dripping contempt -- "dishonest" is one of Diller's favorite terms of dismissal, which he has applied gleefully to Wetherell -- that few businessmen would ever, or could ever, muster. It is vivid, scary, and wonderfully entertaining.

There is surely something unexpected about seeing Diller at these Internet conferences: Could there be anyone less nerd and more showbiz than Diller? The parties; the cars; the planes; the celebrity posse; the power breakfasts, lunches, and dinners? Could there be anyone with a more old-media-centric point of view?

He grows up in Beverly Hills, forgoes college, gets a job in the William Morris mail room, comes of age in the sixties heyday of network television, becomes part of a group of ABC executives who spearhead the movie-of-the-week concept, runs Paramount under conglomerateer Charles Bludhorn, goes to Fox in the eighties and helps Murdoch invent a new TV network. But suddenly, in the nineties, with his contemporaries taking over the industry, and his efforts to be more than just an employee rebuffed by Murdoch, Diller finds himself out of a job.

After a much publicized period of soul-searching in 1992, he takes over the cable shopping channel QVC. The notion of home shopping as a reflection of Diller's media genius -- a spin most of all propounded by Ken Auletta in a New Yorker profile -- goes a long way to obscuring the fact that these were Diller's wilderness years. Subordinates (not his biggest fan club) paint a comical picture: the ever-pampered Diller in a low-rent motel in West Chester, Pennsylvania, near QVC headquarters, or Diller bawling out the young woman staffer who teases him when he arrives at the new QVC office in Queens ("Welcome to Queens, Barry"), or Diller's persistent irritation about being called the cubic-zirconium king. The story of Diller and QVC is in fact largely the story of Diller trying to bootstrap himself back into real media.

And yet, he is not at all regarded as an outsider in the new-media world. Even the blistering contempt he's poured down on David Wetherell (Wetherell, a man with a very high stock valuation but not much business experience, has been a fairly easy target) is not seen as old-media sour grapes. Even the basic point he is making that new media is a cock-up, that it's absurdly valued, that he, Barry Diller, could do it better than anyone in these rooms, doesn't seem to faze anyone too much.

Rather, there is something about Diller that is absolutely in character for these conferences. After all, almost everyone in the Internet business has "transitioned" out of another business and turned themselves -- more or less overnight -- into new-media seers. Barry as much as anyone: He is a founder of the I-get-it-you-don't school of management. His is one of the great career shifts (a late-in-life one at that): From an exalted programming guy and talent coordinator to a finance, marketing, and technology wizard. This is no ordinary leap. Diller is running an information and entertainment company that is the product of some of the corporate world's most intricate financial engineering (no doubt part of the reason the Lycos deal was initially approved by the Lycos board -- including Wetherell -- was no one understood it). He has wholly remade himself -- from showbiz cat to astute financier. Certainly, Barry is one of the modern-day patron saints of entrepreneurs. But it's not entrepreneurship that really is the issue, it's transformation.

I'd certainly love to know how he suddenly came, mid-career, to learn the ins and outs of corporate finance (movie people are notoriously uninterested in numbers). From partying with Warren Beatty to designing deals so artful and complex that analysts, investors, and principals alike are flummoxed (this seems to be the way he snatched the TV business from Universal CEO and Seagram's heir, Edgar Bronfman Jr.). Lots of people would want to take that course.

I have taken to observing Diller from afar. I have often seen him striding in blue pinstripes between Allen & Company, his investment bankers, and Wachtell, Lipton, his takeover lawyers, a few blocks apart, or setting out in the morning from his New York base at the Carlyle Hotel, jacket over his shoulder, walking alone through Central Park. Once, under the awning of the Carlyle, we might have even stopped to chat, except that I was with my children, who were crying and hitting one another. I wonder if I haven't seen something kindly come into his face. It could be that he appreciates the arc of the story -- how a gay man, reckless in his honesty, without much education, beginning with no capital of his own, becomes one of America's most successful and admired businessmen. Or it could be that the possible twinkle in his eye comes from an understanding that these days, success is all about making it up as you go along -- showbiz after all. Or I could be wrong. Most likely he is not kind at all.

E-mail: michael@burnrate.com


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