Rupert Murdoch has long been regarded as the consummate dealmaker. Perhaps his greatest skill is the ability to make quick decisions based on his gut instinct, as I found out to my significant advantage in 1984. I was working for French publisher Hachette-Filipacchi and was the junior in a group of executives trying to interest Murdoch in getting his News group to become our partner in launching our fashion magazine ELLE in the US.
It was our first foray into publishing ELLE, founded in 1945, outside France, and the titan took some convincing. I had the grand title of President of Hachette-Filipacchi, Inc., a one- year-old entity with a capital of US$1,000 and two employees: my secretary and me. We had already had around six knockbacks from US publishers as varied as the New Yorker, Time Inc. and Iowa-based Meredith Corporation, publisher of the ultimate mass market magazine, Better Homes and Gardens. All the publishers said, “Another fashion magazine? Don’t think so. The market is already saturated. Sorry, Didier, it would never work.”
And we had one publishing failure hanging like an albatross around our necks. I’d joined Hachette-Filipacchi as a junior executive in 1979, and we had tried to revive Look magazine in the US, only to crash and burn in nine months, at a cost of 10 million then valuable US dollars.
Murdoch himself was based in the office of his New York Post newspaper but had just bought The Times in London, a big financial bite which suggested to me he probably wasn’t exactly lining up to get into fashion magazines. I could not really picture the delicate, high-heeled fashion editors mixing with the rough, headline-driven journalists. Magazines, yes, but maybe not fashion. News Corp had also recently bought New Woman, and it owned the very successful New York magazine and also The Star, a rival to the National Enquirer. It was a profitable title that was hardly playing to the same readership as ELLE. So, there was no looming conflict.
We knew that we needed a US-based publisher for its local market knowledge and strength, as we had learned to our cost with Look, which we’d tried to manage on our own. “Go find a partner,’’ said my chairman, Daniel Filipacchi, on one of his many visits to the Big Apple, where I was based. But we couldn’t touch either Hearst, publisher of Harper’s Bazaar, or Condé Nast, publisher of VOGUE. They were potentially dangerous competitors. Another advantage of doing a joint-venture with a US publisher was that they wouldn’t set up in opposition to us. So, when I suggested to Daniel that we visit Rupert Murdoch, he was all for it. We’d already published two test issues of Elle in English for American consumption and both had sold out, which meant we had that on our side.
Daniel lined up the meeting for June 24, 1984 and organised reinforcements on our side. We had Daniel leading the delegation, backed by Gérald de Roquemaurel, the CEO from Paris, former Look editor Bob Gutwillig, who was still on the payroll as a consultant, Group advertising director Philippe Sechet and lastly, myself. We were met by Marty Singerman, the CEO of Rupert’s Magazine division.
Rupert had a big office on the top floor of the seventeen-storey New York Post building, overlooking the Hudson River in Lower Manhattan. It was a warm but muggy day, typical of New York in June, with the clammy atmosphere perhaps amplified by our collective nervousness. Rupert entered the room, greeting everyone civilly, but then launching into a loud grumble to Marty about costs at the Post.
“What have you done in the US?’’ he asked. Bob jumped in to explain that we had had a success with the two trial issues. He was bending the truth a bit by including himself in that exercise, and also managed to steer clear of mentioning the LOOK fiasco. Bob can tell a good story and he explained that the first test edition was translated from French to English in France, then set by typesetters who didn’t speak English, with the inevitable storm of spelling mistakes and typographical errors. That thawed the ice a bit but Rupert wasn’t diverted. “How many copies did you put out in the US?” he asked. Bob didn’t know, nor did my other three bosses, but because it had ruled my life for months I was able to say that the first test edition had a print run on 100 000 copies, the second 135 000 and the third, which we showed him, ran to 240 000
copies. “How many pages of advertising did you sell?”
Philippe the advertising ace didn’t remember but since I’d been the one wearing out shoe leather knocking on doors, I had the answer: sixty-four pages out of 252.
“What was the page rate?” he carried on, asking me directly now. I answered $US5,000. “What’s so special? Why did it sell?” he went on crisply. We explained it was a different product from what was available in the US, sophisticated but accessible and very visual, laid out by the highly talented art director, Regis Pagniez. Regis was a horror to work with, but we didn’t mention that. “But ELLE is a French magazine. No one knows it in America,” said Rupert, still unconvinced, if curious. I explained that it was well known in the small village that is the U.S. fashion industry, having been around every week since 1945. I also told him that Calvin Klein insisted that all his junior executives check ELLE each week, even if they couldn’t understand the words in the few copies that made it across the Atlantic. That seemed to get through. “So, it’s a brand,’’ he said. “We can do something with that. We have the contacts with advertisers, printers and distributors and we have the management. That will allow us to leverage off that brand.’’ Then, after an interview lasting less than forty-five minutes, during which we barely mentioned money or terms, he clapped his hands and said:
“Let’s put the lawyers together. We’ll do it.”
It was as simple as that. No doubts, no uncertainties, and with Rupert’s imprimatur it was going to happen one way or another, to our ill-concealed delight. So, began a 50-50 joint venture that got us started on the long road to what would become an international network of ELLE magazines published in forty-six countries. Three years later, Hachette-Filipacchi bought out Rupert’s 50 per cent share of ELLE US for US$180 million, a spectacular return on News Corp’s original US6 million investment.
Not every deal I’ve been involved in was as successful, but what has stayed with me ever since was seeing just how quickly a media titan such as Rupert could make a decision. Some snap decisions in media history have paid off in spades, such as that one, while others have taken years of market research and still ended in tears.
Maybe the magazine industry has a “seat of the pants” element and Rupert certainly got it.
What I can say is that there’s no direct correlation between elaborate planning and financial success, as this book will show.