Autumn of the Moguls: My Misadventures with the Titans, Poseurs, and Money Guys who Mastered and Messed Up Big Media

You create a vehicle for economic self-expression.

It’s less your business than your business avatar. It’s going to represent your business, economic, organizational, and technological philosophy.

Because you have made money before, money is now going to come to you, reside under your command like the armies of lesser lords. The money is your instrument.

A fund.

To have a fund.

Pete Peterson, the former treasury secretary, started a fund called Blackstone Group, which, in addition to making him vastly more wealthy, made him more central, engaged, called upon, than he was as treasury secretary. Before Peterson, another treasury secretary, William Simon, created Wesray, and arguably created the model for the personal fund. Henry Kravis, at KKR, with his fund became the seminal businessman of the eighties. John Doerr at Kleiner, Perkins made his venture capital fund the virtual arbiter of the nineties.

Leverage, venture, hedge—it doesn’t make any difference what kind of fund. In each instance, you have abstract concerns.

It’s influence. That’s what you have; that’s what you’re after.

Rattner’s construct, very vague in its outline, would involve the media industry.

He raised $1.8 billion. And, what with the money you would be able to borrow against that cold cash, Rattner would have $10 billion or more to invest.

No doubt, as he considered his construct in early 2000, he was thinking about old media and new media and the convergence of platforms and distribution systems and the technology to facilitate all this.

But then the market crashed.

Now, in an ideal world, you invest your money in a rising market (ideally, you raise money in a rising market too). In the second best world, you are fortunate enough not to have invested your money in a market which the bottom is falling out of (and too, to have raised at least a good part of what you want to raise before the bottom fell out).

Indeed, as the first year of the millennium wore, on, and as the millennial downturn got worse in 2001, it was more and more clear that Rattner was one of the luckiest guys around. He’d gotten lots of money together before the bust was clearly on, but hadn’t yet given it to anyone. This meant not only that he was not losing any money, but that he would have all the money in his war chest ready to deploy when the market bottomed out.

When he bought, he would be buying cheap. It was an impossible-to-fuck-up strategy. The job was just to wait. The art, too.

You had to fight the impatience of having nothing really to do.

You continued to raise money—slowly, in a down market—and you had a lot of meetings in which you listened to proposals soliciting you to invest in companies that you were not going to invest in because, if you merely waited a little longer, your dollar would buy more than it would buy when you first heard the proposal.

How to be a deal maker—a deal macher—without doing any deals? That was the question.

How to be out there is the way it would have been put. We have to be out there, Steve, someone would have said.

Brand. Profile. Marketing push. Buzz.

A conference.

The finest marketing strategy is to associate yourself with people who do not need a marketing strategy.

Starfucking.

Allen & Company, a far-from-mainstream investment house, which had developed a media specialty precisely because it was not a blue-chip firm, had, some years ago, begun gathering moguls together at the Sun Valley estate of Herbert Allen. Not only was this good for Allen & Company business, but it helped create the illusion that Allen & Company, and Herbert Allen himself, were at the center of it all. A magnetic force.

And if, a central motivation of everyone in the media business is to be at the center of it all, well, then, if you controlled the center, if you were the force that brought people to the center, then you were the center.

So a Quadrangle conference.

Rattner and his partners discussed this idea with Fortune. The concept was, first of all, to do this with people who knew how to do it—and Fortune, like every business magazine, organized several conferences a year. And also, to have Fortune, among the eminent names in the business arena, associated with Quadrangle, still hardly a name at all, couldn’t hurt.

But Fortune, with less to gain by sharing top billing, said no.

It was at this point that Heilemann and Battelle entered the picture. And while they were far from Fortune status, they had done it before. At the Industry Standard they’d produced conferences—which they’d had Rattner speak at (this is how they knew each other, from conferences).

What’s more, if they weren’t Fortune, they knew journalists. (While you might think that Rattner would know journalists from his Times career, this was a little like the Chairman of the Joint Chiefs knowing field soldiers—he would, but would not address them except through proper channels.) That’s exactly the pitch that Heilemann and Battelle sold Rattner on. This wasn’t just going to be a promotional thing; this was going to be a real conference. A serious business congress. Quadrangle would be at the center of a marketplace of business ideas and tough new thinking about the media.

It would be very cool.

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THE BALLAD OF JEAN – MARIE (#ulink_65352331-66d4-5c1d-8d59-f42ca88e7cee)

As Rattner was assembling his war chest, the media business was focusing its attention on another investment banker—a former colleague of Rattner’s from the Paris office of Lazard—who was the brightest and newest star of the media firmament, the first among a next generation of would-be moguls. Heilemann and Battelle, through Rattner, had already drafted him as the first big name of the autumn conference.

Now it is true that within two months of when I met Heilemann and Battelle for lunch, this star, the 45-year-old French-born-and-bred Vivendi chairman Jean-Marie Messier, would be out of a job, the punch line of every business joke. And yet the fall of their head-liner was not so much evidence of Heilemann and Battelle and Rattner’s foolishness, or lack of prescience, but of the weird surface existence of the media business.

The business is really quite a courtly affair, in which the most extraordinary manners and rituals are taken at substantive face value, right up until the point that disgrace intrudes. A mogul is a mogul, with all due consideration, until he is deposed. The king must be killed for him to cease being the king.

If Heilemann, Battelle, and Rattner had not been able to attract Messier to their conference—even when the smart money was already predicting his overthrow—his absence would have marked it as a pallid affair.

If his was a high-wire act, all media acts are. There isn’t any mogul who has not risked absurdity and death, so absurdity and likely death should not exclude you from mogul acclaim.

This is, indeed, a crux of the matter: How is it that people vastly unworthy, by all evidence and logic, so palpably precarious, are taken so seriously?

Why don’t we all break down in laughter?

How is it that our critical faculties come to be so readily suspended?

What made us such pushovers?

Certainly, from the start, the Messier proposal was an exceptionally ludicrous, even slightly surreal one: The idea was to take France’s leading water utility and turn it into a global media-technology-communications company.

Why?

A substantial part of the reason, oddly, lies in the uses of metaphor.

Metaphors as much as spreadsheets are key investment banking tools. The more abstract business became, the greater business there was for investment bankers, and the greater need there was for metaphors to give some structure to the abstruse forms everybody was talking about.

In fact, it was very French: Business, as well as life, was philosophically complex. It required new tools of language and consciousness to decipher.

A water company supplied great metaphorical opportunity.

A water company was an objective correlative for the media business.

The point was the pipes. Here you had a company that moved its product—water—through a complex distribution mechanism right into people’s homes.