For more than a century, rich guys who think they’re smarter than the rich guys who came before them have been buying money-losing publications under the impression that by spending more money than their deep-pocketed predecessors, they’ll turn the red ink black. This tradition, whose ranks include such modern vanity moguls as Mortimer Zuckerman (Atlantic, U.S. News & World Report), Sidney Harman (Newsweek), Arthur L. Carter (Nation, New York Observer), Philip Anschutz (San Francisco Examiner, Weekly Standard), David Bradley (Atlantic, National Journal), Michael Bloomberg (Bloomberg Businessweek), Richard Mellon Scaife (Pittsburgh Tribune-Review), and Martin Peretz (New Republic), gained a new adherent about a year ago when Chris Hughes, a Facebook co-founder whose net worth currently bounces around in the vicinity of the half-billion mark, purchased the New Republic.
Since then, Hughes has followed the century-old script to a T, wheel-barreling a load of cash into the magazine, replacing the top editor with the former top editor, adding staff, opening a New York office, making plans to move his Washington staff to a nicer home, and ordering a makeover of both the magazine and website. This week, those redesigns debuted, with the magazine getting slicker and thicker, and the website receiving a sumptuous transformation that makes the competition look like they’re squatting on GeoCities sites.
Like the rich guys who have come before, Hughes has also set the goal of making the magazine profitable in “a couple years.” Making money is a wonderful ambition for the New Republic, which was losing about $3 million a year several years before Hughes began the current expansion, according to Martin Peretz’s ex-wife, Ann Peretz. Everybody should make money! But the ambition is more loony than it is wonderful. In today’s publishing environment it’s almost impossible for a journal of opinion or national general-interest magazine that’s not part of a larger magazine group that handles ad sales and back-office matters (e.g., Time Warner and Time; Condé Nast and the New Yorker and Vanity Fair) to maintain profitability.
Perhaps the Hughes Republic could turn a quarterly profit now and again if it were to ape the Atlantic and buttress the magazine’s content with tons of topical copy by inexpensive writers, enter the events racket, start a “digital consultancy,” and launch a business site. But as an experienced advice-giver to vanity moguls, I must warn Hughes against trodding this path, even though he’s committed himself to hosting events and already helped chair a New Republic panel.
When folks suggest that he must spend money to make money — that in order to staunch losses one must lose even more — make sure they can cite an analogous case in which the strategy worked. Hughes will be a lot happier running the New Republic as an expensive toy or a cheap millionaire’s hobby, and so will the world of journalism. Let’s say Hughes’ losses crest at $5 million a year. If anybody gives him any lip about it, he can quote from the scene in Citizen Kane, where Charles Foster Kane’s banker frets about the $1 million Kane is losing each year on the New York Inquirer. Replies Kane, “At the rate of a million dollars a year, I’ll have to close this place in 60 years.”