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Another
Life
By Michael Alan Hamlin
December 27, 1999
Asia’s financial crisis drove
home to even the most recalcitrant traditional industrialists and
old-line taipans the mostly painful reality that nothing ever stays
the same. It either gets better or worse, depending on how willingly
— and adroitly — organizations and institutions adapt
to new and continually evolving conditions. No traditional industry
illustrates this better than the global publishing industry.
Just 50 years ago today’s largest
publishing companies were relatively small, closely held corporations
owned by people who either loved books for the sake of loving them,
or loved selling them. In the ensuing half century, major publishers
started going public as old founders died out, then merging to acquire
authors and lists of steady selling volumes, and eventually wound
up being bought themselves by other, larger organizations not always
intent on achieving synergy for their diverse but related operations.
That trend for the most part holds today, with publishing houses
like Pearson and sprawling entertainment conglomerates like Time
Warner responsible for most of the publishing that gets done not
only in English, but German, French, Chinese and many other languages,
including several other Asian ones.
In Another Life: A Memoir of Other
People, venerable Simon & Schuster editor-in-chief Michael Korda
provides a fascinating, first-hand chronicle of the profound transformation
of the global publishing industry from not much more than a cottage
industry — at least in terms of profits as well as the sophistication
of the ancient processes involved in producing books — into
a high-profile — even glamorous — business composed of
huge public corporations whose stockholders expect consistently
high returns and professional management of business processes.
Mr. Korda’s reflections take
place on two levels. First, there is his life and the lives of the
people — mostly authors and other publishing industry figures
— that have populated his career and personal history. Running
parallel is the evolving character of the publishing industry. In
both cases, the transformations are dramatic.
Indeed, Mr. Korda’s life from
early on featured regular and profound change in fortunes and circumstances.
The son of a highly respected and sought after art director and
the nephew of Alexander Korda, "a legendary film producer and
entrepreneur before he was 30," Mr. Korda’s childhood
was filled with famous personalities — his mother and both
of Alex Korda’s wives were actresses — from both the movie
and the publishing industry.
So pervasive was his family’s
involvement in the movie industry that Mr. Korda says he never expected
to do anything but carry on the family tradition. That assumption
went wildly awry when his uncle died, leaving inadequate financial
resources to carry on the business, apparently with the full intent
that his empire die with him.
Eventually Mr. Korda — England-born
of Hungarian extract — found his way to New York — following
a stint as a freedom fighter in Hungary’s ill-fated attempt
to free itself from Soviet domination in 1956 — and through
a series of fortunate introductions found himself as a lowly paid
editor at Simon & Schuster, working for the brother of the deceased
cofounder Richard L. Simon. His cofounder, Max Schuster, was running
the company.
Back then, publishing was a business
— for the mainstream press at least — that operated with
a clearly defined sense of ethics and purpose. That purpose first
and foremost was to publish great literature, both fiction and non-fiction,
and hopefully to make a reasonable return for the effort. But in
order to make that return, editors had to be paid very poorly. In
exchange, lifetime employment was virtually assured.
So editors were a fairly unappreciated
group, and there was little to suggest that they deserved even that
safety net. When Ernest Hemingway’s editor at Charles Scribner
& Sons died, "Hemingway neither recognized the immense
value of (his) suggestions, enthusiasm, loyalty, and support to
his work nor wasted a moment in suggesting that somebody else could
take on the role," Mr. Korda recounts. "The deep bond
between author and editor that was to actually make writers leave
their publishers en masse when their editor changed jobs only came
later, with the demise of the owner-publisher and the advent of
the publisher-businessman."
That demise for Simon & Schuster
took place when Mr. Schuster gave up control of the business to
his long-standing partner, Leon Shimkin. For Mr. Shimkin, however,
gaining complete control of the company was more important to him
than actually running it, and before long the company was in play,
and eventually wound up as a piece of Gulf + Western Corporation,
which owned a bizarre array of businesses, including a movie studio.
Much like the Asian conglomerates
of the miracle years, Gulf + Western believed in growth, any growth,
as long as it increased revenues. By the time the conglomerate acquired
Simon & Schuster the only way it could sustain growth was through
acquisition, so diversified and rundown were most of its myriad
businesses. The sprawling empire was controlled by Charles G. Bluhdorn,
"the most rapacious and ruthless of conglomerateurs,"
according to Mr. Korda.
In the case of the Simon & Schuster
acquisition, Mr. Bluhdorn actually thought he might realize some
synergy, making books into movies. That wasn’t to be, not so
much because it couldn’t be, but because Mr. Bluhdorn wouldn’t
interfere with his unit managers, and Paramount wasn’t interested
in Simon & Schuster’s books. Note that Mr. Bluhdorn was
loath to interfere with the work of his senior executives not because
he thought that was the enlightened thing to do, but so that when
things went wrong, it was clear who had to go.
Needless to say, Gulf + Western was
as ill prepared to compete in a world where stockholders demanded
more than revenue growth than Asia’s conglomerates were to
compete in a liberalized, global economy. When Mr. Bluhdorn died,
a rule-by-the-numbers man who uncharacteristically excelled at more
sensational business responsibility too, Martin Davis, took over
and began selling off the deadwood. He ultimately renamed the conglomerate
Paramount, after its sexiest business.
Simon & Schuster grew from a
US$11 million business to a US$5 billion dollar company, with significant
holdings in the highly lucrative educational and textbook segment
as well as trade publishing in not much more than a decade after
the Gulf + Western acquisition. Ironically, the company was significantly
dismantled in 1998 when Viacom acquired Paramount and sold the educational
and textbook business to pay for the acquisition. Simon & Schuster
is back to being what it was in 1984, a very focused piece of a
larger business.
Mr. Korda’s book is a great
read for lots of reasons unrelated to business. But as an example
of how businesses expand, change, and shrink as conditions change,
it’s a good reminder that nothing does ever stay the same.
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