Maxwell: The Final Verdict. Tom Bower
Gruson. ‘All I want is a men’s room.’
When he emerged, relieved but anticipating either a long wait or a swift return to New York, he found Maxwell in his socks anxiously searching for him. That was Maxwell’s charm – so different from Kevin, characterized by Gruson as ‘an unmitigated shit without his father’s flair’. Plans were completed for the two men to fly to South Korea, the Reverend Moon’s homeland, but the proposed deal collapsed.
Next Gruson had suggested a bid for the National Enquirer, a sensation-seeking tabloid. A team of Maxwell’s ‘experts’ toured the newspaper’s Florida offices and discussed the project at length, only for Maxwell to baulk at the price – in retrospect a missed opportunity, for the profits were enormous. Gruson’s next proposal, the purchase of the New York Daily News, was different. One of three tabloids in New York, the News in its heyday was the nation’s largest daily with a circulation of 2 million. But in March 1991 its staff had been on strike for nearly five months. Although published and sold throughout the dispute by non-unionists, its circulation had collapsed to 300,000 and its advertising revenue had practically disappeared, aggravating its accumulated losses since 1980 of $250 million.
The Tribune company of Chicago, owners of the Daily News, had adopted abrasive tactics which had in Chicago successfully broken the unions’ power. But in New York politicians and even the police, guided by self-interest, had supported the strikers. ‘Stay strong,’ Governor Mario Cuomo urged strikers, who had been burning delivery trucks and intimidating non-strikers. ‘You’re fighting for all of us.’ The problem had been made worse by the naivety of the Tribune company, whose senior executives in Chicago could not understand the ruthless competitiveness of New York’s Jews and mobsters and ignored the reality that New York City was not a suitable location for printing newspapers. Unable to cope with the violence and the daily losses of $700,000, the company’s management had threatened that unless the strike ended by 14 March the newspaper would be closed permanently. Closure, however, would cost an estimated $100 million in redundancy payoffs to the workers.
The Daily News was suffering an illness which Maxwell believed he could cure: overmanning by a rebellious and corrupt labour force, crippling restrictive practices, uncontrolled expenditure, antiquated print machinery and weak management. Over the previous years, he had stayed in contact with Jim Hoge, the News’s erudite and handsome publisher and president, who counted Henry Kissinger among his friends and owned a fashionable Manhattan address. From time to time, Maxwell or Sidney Gruson would discreetly telephone Hoge to ask if the paper was for sale. Politely Hoge would decline their offer.
That changed when the Tribune company issued its ultimatum to the unions and started to look for buyers. Maxwell declared his interest, but told Hoge that he refused to become involved in a competition. His participation would depend upon other bidders leaving the arena. ‘He played it according to Hoyle, the whole way’, remarked Hoge, comparing Maxwell to the bridge master. On 5 March, Gruson gave Maxwell the all-clear. The Tribune company had offered to pay Maxwell $60 million if he took over the liability within ten days. On the same day, Hoge told George McDonald, coordinator of the nine trade unions involved, to telephone Maxwell in London. McDonald, a generous-minded Democrat stalwart, knew that his call was crucial. Without any competing bidders, the newspaper’s existence depended upon Maxwell’s decision. Even McDonald, a seasoned fighter, was nervous when he made that night-time call. Maxwell’s position was potentially powerful and the unionist’s weak. But McDonald’s fears soon dissolved. ‘Do you think it’s worth my while to come?’ was Maxwell’s surprisingly meek response.
‘We’ll give you concessions,’ answered McDonald. Ten minutes later he felt he had achieved more with Maxwell than he had in two years with the Tribune group. Maxwell, he sensed, was hooked. ‘You know,’ he later reflected in his strong New York accent, ‘owning the Daily News is like a visiting card for sheikhs, kings and queens. It opens the door for people and I guessed he wanted it that bad. He could taste it.’
Bestriding an apparently irreconcilable dispute was honey to Maxwell. Not since he had defeated the Mirror Group’s unionists during the 1980s had such an opportunity arisen, and it was in the same city where Rupert Murdoch had lost a fortune before abandoning his attempt to modernize another tabloid, the Post. Nevertheless, a more rational man, confronting such massive and unresolved problems as Maxwell was, might have shied away from new time-consuming tasks at that stage. Maxwell, however, saw the Daily News not as a distraction from his other problems but as a solution to them.
Fresh from plotting his new empire in Eastern Europe (he had flown for a night to Berlin), he began discussing with Ian McIntosh, of the British bank Samuel Montagu, the sale of 49 per cent of Mirror Group Newspapers, insisting that he should receive £500 million in cash. He desperately needed money and hoped that he might raise a better price selling shares in New York. Unfortunately, however, despite his acquisition of Macmillan, he was unknown to American investors. This weakness was mentioned by Charlie McVeigh of Salomon Brothers, chosen after a beauty parade as the project’s New York brokers for the flotation. McVeigh, a ‘handsome goy’, employed as much for his charm as for his talent, was accompanied by Nancy Peretzman, a stylishly dressed, tough investment banker who had caught Maxwell’s eye when she thwarted his bid in 1986 to buy the magazine Scientific American. Together they had stressed the Publisher’s need to overcome his anonymity in Wall Street. Over twenty-four hours, Maxwell calculated that buying the Daily News could solve several problems.
After an emergency session with George Wheeler – Maxwell had spotted a single grey root – he boarded the Gulfstream at six o’clock on Wednesday, 6 March at Farnborough to fly to Whiteplains, New York. His headquarters would be the Waldorf Astoria in Park Avenue rather than the Helmsley Palace on Madison Avenue. During his last visit to the Helmsley there had been a row. His special telephone fittings in the three floors of the presidential suite had been removed by the US Secret Service when the rooms had been occupied by President Bush, and they had not been replaced. Maxwell had exploded, refused to pay his bill and vowed never to return.
As he arrived at the Waldorf more flamboyant than ever, no one could have guessed his financial predicament. Even Maxwell had probably forgotten it somewhere across the Atlantic. To those whom he met over the following three weeks he was ‘Mr $4.4 billion’, a conjured estimate of his wealth. The combination of money and power attracted Americans, most importantly Charles Brombach, the Tribune’s president. Charming Brombach, who had so misjudged New York’s unions, was not a problem for Maxwell. In a pattern which he had repeated on hundreds of previous occasions, he pulled out a copy of his own biography written by Joe Haines, the idolizing Daily Mirror columnist, from the piles which were always stored on his Gulfstream, on his yacht and even in his hotel suite, and presented it as his visiting card, just as he presented the same volume to the heads of every nation which he visited. Unlike the heads of state, the Chicago Brahmin actually read the hagiography and was convinced by its portrait of ‘a great family man, a brilliant entrepreneur and a brave soldier who could bring the unions to heel’. Brombach understood the difference between his own company and Maxwell’s. ‘We were looking at a fifty-year investment. He was sixty-seven years old and wanted to enjoy a piece of his lifetime’s ambition.’ It would be another vanity purchase.
The public announcement of Maxwell’s interest preceded his arrival in New York. ‘I’m negotiating to save the newspaper,’ he boomed soon after touch-down. Although there were only nine days left in which to finalize a deal, he threatened that the unions had just five, until 11 March, to capitulate to his demands. The following morning he met McDonald on the tenth floor of Macmillan’s Manhattan offices. The union leader had already said, ‘Maxwell will not be granted “management rights” but we will of course consider any demands he makes.’ The hint of concessions, albeit limited (the unions were determined to deny the aspiring proprietor the absolute power of hiring and firing), had been music to Maxwell, who had demanded that 800 of the 2,300 employees be dismissed but had rashly conceded, ‘I’m not asking for “management rights”.’
At the meeting, McDonald noticed another sign of weakness when Maxwell announced, ‘I want the paper.’ True to form, their conversation was marked by the tycoon’s particular charm