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Tuesday, November 21, 2006

Sam Newhouse - The frugal founder

Sam Newhouse on the cover of Time Magazine
July 27, 1962

Samuel Irving Newhouse (1895-1979), the father of Si and Donald Newhouse, was the founder of the family business and built it with his brothers Ted (1903-1998) and Norman (d. 1988).

His rags-to-riches story is an American classic. Like many barons of American capitalism, he was a monopolist who used our free-market system get a foothold, and then abused it to eliminate competition in order to enrich himself and his family. (Nepotism will be discussed in a later post.)

For $.01 + shipping you can get: "Newspaperman: S. I. Newhouse and the Business of News", (1983) by Richard H. Meeker at Meeker is publisher of Portland's Willamette Week.

Excerpts from a review published in the New York Times Sept. 25, 1983 (registration required), by Edwin Diamond of MIT and author of "Sign Off: The Last Days of Television":

Sam Newhouse told the story on himself. He asked his wife, Mitzi, if she wanted anything as he was leaving his Park Avenue apartment for a stroll one Sunday: "She asked for a fashion magazine, and I went out and got her Vogue."

The year was 1959, the story apocryphal. But it characterizes Newhouse's style at the zenith of his remarkable, joyless, heroic, exhilarating, monomaniacal career, one as eccentric as any in the annals of American capitalism. At the time of his death in 1979, the Newhouse empire included 29 newspapers, a string of radio and television stations and the Conde Nast magazines. In 1920, Newhouse bought his first newspaper, The Fitchburg (Mass.) News, for $15,000. In his last deal, more than six decades later, he acquired the eight Booth papers in Michigan and the Sunday supplement Parade for a total of $305 million.

Mr. Meeker decided to go ahead with this biography in the face of absolute stonewalling by the family and associates of Newhouse. He says that Newhouse's wife and their sons, S.I. Jr. and Donald, refused interviews, as did his brothers, Theodore and Norman, and all the current Newhouse editors and publishers. Even photo sources, especially for Newhouse's younger years, dried up. Family members let it be known that he was essentially a private man and that they wanted to wait for the "right time" and the "right biographer."

Newhouse didn't want to make - or write or observe - history. He wanted to make money. A. J. Liebling called him a journalist chiffonier, or ragpicker, for his habit of buying undervalued newspapers that were in distress from failing circulation, bad management, feuding family owners or other causes. (He favored those that enjoy monopoly or near-monopoly status.) For Newhouse, there was never the romance of newspapering, the duties of the First Amendment. Newhouse probably did bookkeeping better than any businessman of his era.

Newhouse's life was the stuff of the American dream. He was the first child of dirt poor, unschooled Russian Jewish immigrants who settled on Orchard Street on New York's Lower East Side. Through pluck and luck, he pulled himself up the ladder to amass one of the great private American fortunes. His wife achieved social prominence (the Vogue connection helped) in New York's meritocratic society. His sons and nephews and cousins went into the business, and he endowed a school of communications at Syracuse University, located in one of the towns where his company owned a newspaper.

Newhouse didn't conceal his nature. When he was 84, two Syracuse University officials came around to see him to solicit a final endowment gift before he slipped away for good. They found his attention wandering, his appearance waxen. While the men from Syracuse talked up the school, Mitzi Newhouse showed around some photographs of a Florida house she wanted to buy. Newhouse roused himself for a moment; his glow returned, and as Mr. Meeker tells it, he said, "Mitzi, I'd rather buy another newpaper." That is not a bad epitaph, and it is one that is likely to survive Mr. Meeker's book and even the eventual "official" version.

Part 3 in a series: "Getting to know The Oregonian's owners"

1 comment:

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