Newhouse: from crushing poverty to a towering media empire; Newspaperman, S.I. Newhouse and the Business of News, by Richard H. Meeker. New Haven and New York: Ticknor and Fields. 294 pp. $17.95.
Some men buy newspapers for political power, like William Randolph Hearst who was indifferent to profits as long as he could be king. Others are interested in daily papers solely as money-making factories with the news an unavoidable nuisance. The most interesting practitioner in this century of newspaper-as-factory was the late Samuel I. Newhouse.
Newhouse was not without pride and ambition. But after a brief and futile fling at political influence, his goal was to become the biggest newspaper chain operator in America, squeezing each new paper for maximum profits with which to buy more papers. He reached his goal for a brief time in the 1960s, after which modern conglomerate owners overtook him. But in extracting maximum cash from each newspaper he was undisputed king in a domain filled with earnest seekers after the crown.
Newhouse was not the first. Early in this century, Frank Munsey bought, sold, and merged papers with calloused caprice, winning him William Allen White's bitter indictment of having brought to American journalism ''the talent of a meat packer, the morals of a money changer, and the manners of an undertaker.'' Munsey was a sensitive amateur compared to Sam Newhouse.
Richard Meeker, a free-lance writer in Oregon, has produced a tour de force in his biography of S. I. Newhouse. (Only the title is wrong. Newhouse was no more a newspaperman - that is, a journalist - than a commodity trader in pork belly futures is a devotee of pigs.) Meeker's book is full of careful detail, despite the refusal of the Newhouses - pursuing a family tradition - to grant interviews or give access to records. But Meeker has done more than that. He has written a readable book rich in both personal and historical background in an important era of American journalism.
The Newhouse beginning was almost too stereotypical. His parents, Eastern European Jewish immigrants, lived in crushing poverty in Bayonne, N.J. The father was ailing, his wife forced to support the family peddling sheets and pillowcases door-to-door. Sam, at age 13 became, in quick succession, useful-kid-around-the-office, book-keeper, and office manager in the law firm of a Bayonne judge. When the judge reluctantly inherited a troubled newspaper, the Bayonne Times, he said in distracted irritation to the kid, ''Sam, go downstairs and look after the paper.''
Incredibly, ''the kid,'' only 16 years old, was soon running the paper from the back shop. He learned every detail of supplies, production, and distribution. The newsroom seemed to be no more significant to him than the broom closet. He became a demon at selling ads, sabotaging the competition, and ruthlessly cutting costs. It was his start at operating newspapers as factories.
Newhouse did not cut costs the easy way, by issuing meat-axe memoranda from headquarters. Every week he visited each of his papers, getting facts and figures in every department and demanding results the next week when he brought up details even the local supervisors had forgotten. He didn't give his papers operating budgets, only orders to cut costs.
At a time when newspapers were entering the magic world of Wall Street paper, Newhouse was the last major operator dealing in hard cash of his own. He became a wizard at complex corporate structures to avoid taxes (a posthumous tribute to this talent was the recent claim by the Internal Revenue Service that his estate owed the government $900 million in unpaid taxes and penalties). When Newhouse sized up a paper he wanted to buy, or a chain of papers, he did not have to worry about stockholders or beg banks to take a chance. He encouraged a public image of a man careless with millions, but he was the shrewdest man in the business in foreseeing how much he could extract from a paper and its community. Against tough corporate competition and endemic anti-Semitism among many newspaper owners and their banks, he used a masterful grasp not just of his cash on hand but of business realities. He ended with 28 papers in 12 states and a major fortune.
He could be devious and winning. In one power struggle he enticed a son to conspire against his own father (not rare in newspaper family fights). Later, he used the son as a front to buy the newspapers in Harrisburg, Pa., knowing that the original owners had declared they would not sell to a chain and, he assumed, not to a Jew. For several years thereafter almost no one in Harrisburg knew that Newhouse was the real owner. At another time, he even permitted a few years of quality journalism in Portland, Ore., in order to create a national image of a good buyer for proud local papers, and then, when that had been accomplished, crushed the news staff.
Eventually, the Newhouse empire extended to broadcast stations and the Conde Nast and Street & Smith magazine groups (with magazines, as with newspapers, he often bought competitors and merged them to increase profits). After his death in 1979, his heirs bought the Random House book publishing complex and, so far, seem to operate it with more attenton to editorial quality than is extended to most Newhouse newspapers.
Meeker has written a careful and fascinating account of a man whose legacy reaches into millions of American households every day through daily newspapers, radio and television stations, magazines, and books.
