10

       NOT GETTING IT

      My problem, my analytic failure, is in always thinking this is the end. That it must be the end. That it has to be obvious to everyone that this is the end. That we have reached the point at which reformation must begin. That the moral of the story is clear.

      By July 2002, there was the absolute logical certainty that AOL Time Warner, the largest company in the media business, among the largest companies in the world, could not survive. The collapse of Vivendi was nearly a fait accompli. Bertelsmann was in deep retreat—they would surely sell Random House, its vast over-the-top acquisition (again, that problem of foreigners and due diligence), if only there were a buyer. Disney had become one of those isolated nations—Romania of the Ceauşescu era, or North Korea—held together only because its own despot had so thoroughly isolated himself from reason and the rest of the world. Viacom was a company caught between two warring chief executives who would sooner see each other dead than save the enterprise. News Corp. was run by the ancient mariner, almost mystical in his leadership. (What happens when the mystical leader dies?) All this together with the fall of Enron, WorldCom, Global Crossing, and Adelphia, and an epochal challenge to the cult of corporate personality—a post-Maoist climate, almost.

      If I had briefly thought Heilemann and Battelle had an extraordinary opportunity—a chance to seize an antibehemoth Zeitgeist—now I began to think, Who would even come to a media conference? Who would want to? The media was dead—everybody knew. Must know.

      And yet, certainly I was the shortsighted one.

      When you listen to the journalists and analysts covering the media business, you can actually think it’s an orderly, self-correcting world we work in. Reporters might spend a day ripping Messier or Pittman or Middelhoff to shreds, but then, shortly, return to defending Vivendi or AOL Time Warner or Bertelsmann.

      “In fact,” said the Times, “once all the broken promises about being a new breed of company for a new millennium are discounted, AOL Time Warner does not seem to be in such bad shape, considering the economy.”

      Reporters resist following to the end the cold logic of breakdown and collapse—even for the fun of it. They can’t seem to help thinking that invariably, rationality will emerge out of the current mess. If Martha Stewart goes to jail, the world will have been righted. It’s all ultimately part of a healthy process. After this period of resignations, terminations, investigations, and reorganizations, normalcy will return.

      The rules of reporting and analysis are that even if you have good reason to suspect that the end is near, that events are largely out of control, that very bad things will invariably happen to very bad companies, you’re not allowed to say it. There’s just no formula or model for applying any sort of chaos theory, or even gut sense, to business reporting or corporate analysis.

      You couldn’t say what seemed pretty obvious: that nobody knew how to run the superaggregated and radically transformed companies that came into being during the past decade. That these companies defied control, were too vast and far-flung and composed of too many recalcitrant people and inimical functions. This, together with the fact that the guys who ran these companies often clearly had no idea what they were doing.

      Everybody but the most literal-minded knew this.

      But to be a respectable business reporter, you have to pretend the world is a coherent, rational, by-the-numbers place. You can’t report that everything is up for grabs, that the greatest likelihood is that we’re deep into a process that will cause the reordering of most of the basic structures of the media business—that the sky is falling.

      Now, each of the management coups at AOL Time Warner, Vivendi, and Bertelsmann during the summer of 2002 was reported as a function of internal travails, and that is obviously the case—each enterprise was reporting its own variation on a looming cash crisis, which, in business terms, is the mother of all crises. On the other hand, three is a trend. Three indicates a mass movement, a systems issue, a rapidly spreading condition. It is not just a function of bad management but of larger, converging forces. History is turning against you—and is probably out to get you. And there’s no way to manage yourself out of the mess.

      But responsible reporters can’t say that.

      Which is why I started to wonder if I might have special powers.