THE COLUMN: What's Good for General Bullmoose...

Gerald M. Levin, who died last week at the age of 84, will be little noted nor long remembered by the American public, yet his name should live in corporate infamy. As the man who destroyed Time Inc. via a unique combination of ambition, pomposity, luck, greed, unctuousness, and stupidity, Levin is one of the great villains of 20th-century American and journalistic history and a now-deceased exemplar for everything that's wrong with big business, Wall Street, and the grubby managerial class that controls the lives of millions of people. Look on his Works, ye Mighty, and despair!

Gerald M. Levin, a “visionary” media executive, as he was often described, who ran the world’s largest media company, Time Warner, and became an architect of its merger with America Online, widely considered the worst corporate marriage in American history, died on Wednesday. He was 84.

Mr. Levin was Time Warner’s chief executive when he and his counterpart at AOL at the time, Steve Case, devised what was then the largest business merger in U.S. history. When the deal was announced on Jan. 10, 2000, Time Warner was the world’s largest media company, and America Online was the largest internet company, with a combined market value of roughly $342 billion (the equivalent of about $625 billion today).

The merger, which created AOL Time Warner, was heralded as a watershed moment — the union of old and new media, a storied 20th-century American company whose origins could be traced to the publishing baron Henry Luce and the Hollywood boss Jack Warner, hitching up with a Virginia tech company for a ride into the World Wide Web. Instead, it became shorthand for the excesses of the turn-of-the-century dot-com bubble and the era of so-called synergy.

Wall Street on the line...

It was a dumb idea from the jump and everybody knew it at the time, except for the aforementioned grubby managerial class and its cheerleaders in the major mainstream media and on the financial cable shows, who swooned at every new "transforming transaction" that came down the pike. Newer! Bigger! Better! Synergistic! As I had previously commented to my Time colleagues when an earlier generation of foolish Time Inc. executives had allowed the company to be taken over by the pirates from Warner Communication in 1989: "synergy is the new conflict of interest." So it proved. 

The merger’s failure was swift and unmerciful. AOL’s stock price slid more than 30 percent between the deal’s announcement in January and its approval that December by the Federal Trade Commission, pushing AOL’s proposed $165 billion purchase of Time Warner — in stock and assumed debt — down to $112 billion.

By the start of 2002, AOL Time Warner’s market value was hovering around $127 billion. That year, the company posted a net loss of $98.7 billion, a record for a U.S. company. Ted Turner, the company’s largest individual shareholder at the time of the merger, later told The New York Times that the deal had cost him 80 percent of his worth, about $8 billion. Mr. Levin resigned in 2002.

Levin's groupies, however, continued to sing his hosannas. They found his pseudo-intellectuality/quasi-spirituality irresistible. He was, they said, a scholarly "visionary" who, despite his rodentine appearance, could quote the ancient Greeks and the Bible, and used words like agape. He was, after all, the genius who got HBO on satellite to show the "Thrilla in Manila" and thus made his reputation in the company! The collapse of his world buffaloed him. As Nina Munk recounts in her book, Fools Rush In:

FOR MONTHS AFTER THE COLLAPSE OF AOL TIME WARNER, Levin was “a wreck,” he confessed. During our first encounters (long lunches, telephone calls, and meetings in his post-retirement office on the second floor of the Time Warner Building at 75 Rockefeller Plaza), he sounded desperate, like someone looking for a sign of redemption and a way out. Vulnerable, he told me he was on the path of self-discovery, self-realization. He talked about maybe writing a novel. He was reading the philosopher Martin Buber, he said, whose 1923 treatise I and Thou focuses on the way human beings relate to the world and to others, genuinely. Freed from the corporate prison of AOL Time Warner with its inhuman demands, Levin had taken off his blinkers only to discover the fragile beauty of life itself. “I’d never cried before,” he told me in a confessional mode, “I’d never cried. And now I cry all the time.”

Having followed Levin for years, I’d finally concluded that the man was brilliant but fragmented; parts of him didn’t cohere, didn’t fit together. Part of him, the one that quoted the Bible and Heraclitus, was deeply spiritual. At the same time, as Levin himself admitted, he was ruthless. Was his spiritual quest a form of sentimentality, the inevitable flip side of ruthlessness? Or was Jerry Levin, one of the most manipulative corporate operators of our time, suddenly experiencing a change of heart and mind, regretting what he’d done to AOL Time Warner, and crying on behalf of his shareholders and employees?

Either way, Levin’s repentance was short-lived. “I’ve done a transforming transaction on myself,” he told me, giddy, one afternoon in early 2003. He’d fallen in love; the love was “profound, almost unreal,” he confided. Abruptly, during the 2002 Christmas holidays, Levin had informed his wife of thirty-two years, Barbara Riley, that he was leaving her, just like that. (“She never saw it coming,” a friend of hers told me.)

All class; Levin went on to divorce his third wife as well.

Don't cry for them: Steve Case of AOL and Levin.

That the ruination of Henry Luce's publishing company, founded in 1923, was perhaps made inevitable by the internet, which has demolished just about every industry it's touched, including journalism, magazines, and Hollywood, didn't matter one whit to Levin or to his equally disastrous predecessors, Dick Munro (Harvard) and Nick Nicholas (Soros Fellowship trustee), who had engineered the screwball Warner deal. They might have more prudently chosen to capitalize on Time's strengths of factual reliability and elegant writing, and thus fortify the company's hard-won readership base, the way the New York Times ultimately did, instead of immediately rushing into the arms of a sexy new suitor. But no -- it was all about the "transforming transaction":

At the time, you may recall, Time and other media companies felt besieged. During the previous few years, Rupert Murdoch had bought Harper & Row, his great rival Robert Maxwell had nabbed Macmillan, Bertelsmann had purchased RCA Music, and Sony had acquired CBS Records. “We see Robert Maxwell, Rupert Murdoch, Bertelsmann, and Sony coming into our market and raising hell,” Richard Munro, Time’s chairman, said in announcing the merger. “We see this as an opportunity for an American company to get competitive.”

Nicholas expanded upon the same theme. “There will emerge on a worldwide basis, six, seven, eight vertically integrated entertainment conglomerates,” he told me. “At least one will be Japanese, probably two. We think two will be European. There will be a couple of American-led enterprises, and we think Time is going to be one.” Levin backed up his boss: “This is not a transaction done for the purposes of 1989, or even the nineteen-nineties,” he said. “It is for us to be positioned for the next century.”

Whoopsie-daisy! Instead, Time Inc., which is to say Time Magazine, Sports Illustrated, Life, Fortune, People, et al., wound up on the ash heap of history, in which some of its zombie publications still stagger on. In retrospect. one of the first signs of trouble was the arrival in its offices in the Time and Life Building in midtown Manhattan of representatives of McKinsey & Company, the apex predator of corporate buzzards. The managing editor at the time, the late Ray Cave -- the last of the great Time managing editors, as things turned out -- gave them a couple of days to wander around and then threw them out. When Time capped his tenure by winning the National Magazine Award for general excellence in 1985, Cave received the news humbly and, one of his very few staff meetings, said how "awed" he was by the editorial talent in the room. 

After Cave left, the sharks arrived, easily picking off the weak men without chests who tried to steer an ungainly dreadnought of a company that had long ago lost sight of its mission -- which was, simply, excellence -- and had become a plaything of the wealthy in the gilded Dogpatch called Wall Street. A place where this week's geniuses were next week's bums, albeit highly rewarded bums. But what did they care? When, as Munk reports in her book, Levin abruptly left his second wife: 

Levin’s former executives and employees were outraged. “It’s beyond belief,” gasped one senior official. “The gall!” exclaimed another. It was unconscionable: here was Jerry Levin, carefree, on a beach, in love, savoring his spiritual journey. Meanwhile, back in New York and Dulles, his former executives and employees were mopping up the awful mess he’d left behind at AOL Time Warner. Their stock options were worthless. Their retirement plans had been decimated. And Levin, free as a seagull, soaring, and still earning $1 million a year as an “advisor” to his old company, had walked away from it all. So this was what it all came down to: a CEO could be utterly reckless, utterly ruthless, and then he could move on.

And that wasn't the end of it. In 2022, with the Time Warner empire being sold off for parts, AT&T acquired the shell of Time Inc. for $100 billion: the Times headlined its story, "Was This $100 Billion Deal the Worst Merger Ever?" 

When AT&T’s bold megadeal to buy Time Warner was announced in October 2016, combining AT&T’s broadband and wireless networks with Time Warner content, many analysts and investors cheered. They loved the promise of cutting out the cable middleman and delivering entertainment directly to people’s TVs, laptops and phones.

Less than four years after the merger, AT&T abandoned its grand initiative. It spun off its Warner Media assets and ceded management control to Discovery. The new company, Warner Bros. Discovery, took on $43 billion of AT&T’s debt, and AT&T shareholders kept 71 percent of the company, a stake worth less than $20 billion. That amounts to a loss of about $47 billion for AT&T shareholders, based on AT&T’s $109 billion valuation of the deal at the time it was announced.

AT&T’s acquisition of Time Warner is hardly the first deal to have gone disastrously awry — Time Warner’s own merger with AOL in 2000 led to $160 billion in write-offs. But few corporate mergers have stirred up the passions, seething resentments and finger-pointing as AT&T’s short-lived ownership of Time Warner did.

As for the soon-to-be-short-lived "Warner Bros. Discovery" -- the Tyson Foods of entertainment -- here's a list of their brands. The stock is currently worth $8.54 a share. When the deal was made, Time stock went for $107.50.

Well, what's good for the corpo-rats is good for the U.S.A., right? As John Cassidy wrote in his 2013 post-mortem of the ongoing wreckage in The New Yorker: "About the only ones who consistently benefitted from Time Inc.’s transformation into part of a multimedia conglomerate were the bankers and lawyers who put the deals together." Not to mention the execs who profited from it. If you're looking for a point when it all went wrong with the American economy, the murder of Time Inc. at the hands of Levin & Co. is a good place to start. So RIP, Time Inc. As for Jerry Levin, he should be so lucky.