The Torch Is Passed at the House of Luce

Henry R Luce is in the news ....

Started Time in 1923
Started Fortune in 1930
Started Life in 1936
Started Sports Illustrated in 1954
(2000: his company is now called AOL Time Warner)

Henry R Luce Bio at Time:
http://www.time.com/time/mediakit/about/biographies/founders/luce.html

NYTimes Article Today:
http://www.nytimes.com/2005/10/17/business/17time.html?ex=1287201600&en=8e790ca9260e5664&ei=5090&partner=rssuserland&emc=rss

The Torch Is Passed at the House of Luce

By KATHARINE Q. SEELYE

When Norman Pearlstine, the editor in chief of Time Inc., decided
early this summer that Matthew Cooper, a reporter for Time magazine,
should testify before a grand jury in the C.I.A. leak case, Mr.
Pearlstine's No. 2, John Huey, was uncharacteristically circumspect
about what he would have done, had he been in his boss's shoes.

A lot of people wanted to know, especially in the magazine's
Washington bureau, which felt hung out to dry by Mr. Pearlstine's
decision. It was a defining moment for Time. And Mr. Huey, as Mr.
Pearlstine's heir apparent, would soon be in the position of making
such decisions himself.

Now he is. Time Inc., a division of Time Warner, the world's largest
media company, is to announce today that Mr. Huey, 57, will succeed
Mr. Pearlstine, 63, on Jan. 1. This makes Mr. Huey the sixth editor in
chief of the storied magazine empire since Henry R. Luce published the
first issue of Time in 1923 (though Mr. Luce did not assume the title
of editor in chief until the 1940's).

So the question was put to Mr. Huey in an interview last week: Would
he have had Mr. Cooper testify before the grand jury?

Yes, he said, he would have reached the same conclusion as Mr.
Pearlstine but with two caveats: "If I know then everything I know
now," he said, more than three months after the fact, "and if I'm
faced with exactly the same situation and data, then yes, I make the
same decision."

The answer showed, beyond loyalty to Mr. Pearlstine, the degree of
mind meld between the two as they stake out a position unpopular among
many journalists. They have worked together for 17 of the last 25
years, starting at The Wall Street Journal, and Mr. Pearlstine has
been grooming Mr. Huey as his successor since appointing him four
years ago as editorial director.

They have been the Astaire and Rogers of publishing, so in sync as
they swept across the floor of the house of Luce that it was not
always clear who was leading.

"John has been running this magazine group with Norm, so it's hard to
tell where one's point of view ends and the other's begins," said Eric
Pooley, whom the two executives installed earlier this year as
managing editor of Fortune.

As a result, the transfer of power to Mr. Huey will be just the way
Time Inc. likes it - barely perceptible to its 13,500 employees or to
the nearly two of every three American adults who read at least one of
Time Inc.'s 155 magazines every month.

Moreover, the Huey era is likely to bear a strong resemblance to the
11-year Pearlstine era, down to Mr. Huey's grooming of his own
successor who, if the hosannas from the 34th floor of the Time & Life
Building are any indication, is likely to be Martha Nelson, 53, the
managing editor of People magazine.

"I don't think you'll see a lot of change," said Don Logan, chairman
of Time Warner's media and communications group. "It's an orderly
transition that has been planned out and thought out for some time.
And it's not like John is moving into a situation that's broken and
needs to be fixed."

But that is not to say that everything will stay the same. The
challenges facing Mr. Huey, an assertive and opinionated fellow, in an
increasingly competitive and strained financial environment are
different from those that have faced Mr. Pearlstine.

"The bottom-line pressures at Time Inc. are no secret," said Mark
Whitaker, editor of Newsweek, Time magazine's crosstown competitor.
"And they are particularly intense now, given Carl Icahn's involvement
and interest in getting the stock price up," he said, referring to
pressure for corporate revamping by Mr. Icahn, the investor who has
increased his stake in Time Warner.

But "for anybody in this business," Mr. Whitaker said, "the big
challenges are: How do you continue to keep print magazines exciting
and viable while also taking advantage of the Web? How do you attract
younger readers? And what can we do to make the strongest possible
case to the advertising community?

"John is in the same boat with everyone else in trying to figure those
things out."

Mr. Huey, a native Georgian with a slow drawl, seems to be trying not
to make waves as he takes the helm.

"My main vision - and this sounds like I'm more of a marketer than an
editor, but so what? - is making sure the power of the brand stays as
vital as it can," he said in the interview in his office, which he
will soon trade in for Mr. Pearlstine's grand corner lair.

And who will take Mr. Huey's none-too-shabby digs? No one for now, he said.

"I have to spend time sorting out what life is like without Norm," he
said. Besides, he added, Ms. Nelson, whom he called "a creative genius
and a great manager," is "very, very valuable right where she is." But
few doubt that Mr. Huey will sooner or later expand her portfolio to
include more of the lifestyle magazines, Time Inc.'s profit centers,
and put her on a path to become the company's first female editor in
chief.

For years, the publishing division of Time Warner, which is mostly
magazines but includes books, has been immensely profitable.

According to Time Warner's earnings report for the first half of this
year, the division accounted for $2.7 billion of the company's total
revenue of $21.2 billion. This is the smallest amount generated by one
of its five divisions, and yet it generates 10 percent of its
operating income, before depreciation and amortization. The division
consistently makes money, led by the phenomenal financial success of
People magazine, which accounts for about 15 percent of Time Inc.'s
profit.

"If you take People magazine out of Time Inc., we are a rather
ordinary magazine company," Mr. Pearlstine said. "It's what gives us
the superior performance."

But growth at some other magazines has slowed or is flat. Problems
include sluggish advertising, uncertainty over the sources of future
growth and an inability to make headway online. Mr. Huey said that
Time, the flagship publication, for instance, "needs a little pump."

Richard Greenfield of Fulcrum Global Partners, a publishing industry
analyst, said that Time Inc. "is a good solid business today and has
had reasonable growth over a very long period of time, but the average
12- or 21-year-old isn't picking up magazines." In addition, he said,
the company's print division was hampered by its online division, AOL,
which features news generated by media outlets besides Time Inc.

"How do you make Time magazine into a killer brand online if you are
offering these other brands?" Mr. Greenfield asked. "Magazines like
People and InStyle may have a very long life, given that it's hard to
replicate that experience online. But for the less female-skewing,
less fashion and less gossipy publications, we're increasingly
concerned about where they are going. With news, people don't want to
read it a week late."

Mr. Logan said he expected profit to be up again this year but the
company was nonetheless in a "difficult" period. As a result, he said,
he expected tighter cost efficiencies and fewer new magazines. Time
Inc. has essentially had a hiring freeze for the last four years. Mr.
Huey said the slowed growth in company profit was already forcing him
to think about job cuts. "It's premature for me to say how it comes
out, but it's in the air," he added.

He also said advertisers had become more aggressive about trying to
get lower rates and embed their products in magazines in ways that did
not immediately identify them as ads. "The pressure is extraordinary,"
he said. But, he added, "We have to be open to some of these kinds of
things."

In newsmagazines that are trying to present "the unvarnished truth,"
Mr. Huey said, he "would never consider such a thing." But in others,
"we would work to figure out if the consumer would be comfortable and
if it didn't denigrate our brand of journalism."

Ann S. Moore, chairwoman and chief executive of Time Inc., said Mr.
Huey's main task would be to pick the editors to run the magazines.
His real test, she said, "is who's his team." She said she did not
anticipate immediate turnover at the major publications; most of those
editors are relatively new. But, she said, "there are magazines that
need reinventing and redesigning, and there will be turnover."

Replacing editors is a sore subject for Mr. Huey, who fired four of
his shortly after becoming editorial director in 2001, a messy period
chronicled in an unflattering article in GQ.

Mr. Pearlstine said many of those decisions were his, although Mr.
Huey was blamed. While Mr. Huey disputes many details in that article
and acknowledges that he can be blunt and sarcastic, he said he had
learned to "modify" his behavior. "The further up you get in an
organization like this," he said, "the more weight people put on your
words."

For all of the symbiosis between Mr. Pearlstine and Mr. Huey, there
are differences.

Mr. Pearlstine is something of an international jet-setter; Mr. Huey
has avoided what he calls the media swirl. Mr. Huey's family lives in
South Carolina, to which he commutes regularly. Since his use of
company planes for that purpose was criticized, he now takes
commercial flights.

Mr. Pearlstine said they also had different instincts. "I have that
newspaper instinct that says you put your most important story on the
cover," he said. "John has the instinct that the cover is a marketing
document."

And while they emerged on the same side in the Cooper case, they
arrived in different ways. Mr. Pearlstine, who was trained as a
lawyer, said the decision was the most difficult he faced in more than
three decades in journalism. He pored over case law and buttonholed
academics, he said, before concluding essentially that no one is above
the law.

Mr. Huey is more of a gut-level pragmatist. "I was never the
intellectual champion of the decision in the way he was," Mr. Huey
said of Mr. Pearlstine, "because I'm not a lawyer and I'm not an
intellectual. But I'm not an idiot either."

He said he would have done what Mr. Pearlstine did because he learned
in the last three months that Mr. Pearlstine's decision "did not
destroy the credibility of Time magazine," as some had feared.

Moreover, he said, "if you look at how the opposite decision is
playing out," referring to the decision by Judith Miller, a reporter
for The New York Times, to go to jail rather than testify in the case,
only to emerge from jail 85 days later to testify, "I'm not sure what
that proves. What are the lessons from that?"

A notable difference between the two is that Mr. Huey loves being a
hands-on editor. "I was a guy who liked to write headlines and picture
captions and move things around and choose covers," he said. "There
was a tradition in the old days when the editor in chief would edit a
magazine for a couple of cycles. Norm never did that, and as to
whether I would ever revive that tradition, I don't know. But I
certainly would be comfortable doing that. I like editing magazines.
It would be fun to get back in the car and ride around the track a
couple of times."

--
Regards,
Sanjeev Narang

***

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