The big unanswered question about Sullivan’s business model is how the economics are going to play out. He seems to have brought in about $100,000 today, from loyal readers — that’s about 4,000 subscribers off the bat. But that $100,000 is going to go fast. Sullivan is coming off a fat contract at NewsBeast, signed when Tina Brown was flush with lots of Barry Diller cash. He almost certainly couldn’t get her to agree to replicate that contract when it came up for renewal, so it’s hard to know how much money he’d receive if he stayed at the Beast. But my guess is that Sullivan wants the staff of seven, including two paid interns, to earn somewhere in the neighborhood of $750,000 a year between them, plus benefits. Add in what Sullivan lumps under “legal, technological and accounting expenses”, and you’re well into seven digits. So while today’s haul is impressive, Sullivan is going to have to keep those subscription revenues coming on a pretty steady basis, and he’s surely targeting a paying subscriber base of at least 50,000 — about 5% of what he calls his “unofficial staff of around a million unpaid obsessives”.
He saved Newsweek, hired Tina Brown as editor and told me just last week that the magazine was on track to break even. When he died April 12 after a brief battle with leukemia, it came as a shock. He was 92 and expected to live past 100. We all believed him.
AOL, even after its spinoff from Time Warner in 2009, remains a public company. So why did it pay almost completely in cash? (Just $15 million of the transaction is in stock.) Because while AOL clearly believes fully in The Huffington Post, Arianna and her squad just as clearly don’t believe fully in AOL.
When I met Sidney Harman, he seemed to me a D-list guy with A-list money. His wife is a Republican congresswoman—strictly B-list stuff at best. But I could tell right away that he cared about journalism, and caring is a very A-list thing to do. For instance, he said to me and Tina, “I don’t care what you do with Newsweek, but you can’t change the motto, ‘All the News That’s Fit to Print.’ I love that motto. You can’t get rid of the Talk of the Town section or the Index page. You can’t fire Clay Felker. There still has to be fiction in every issue, and H. L. Mencken keeps his column.” I said to him, “Sidney, you have nothing to worry about.” Then he said to me, “Barry, it’s good to be in the stereo business with you.”
It will be nice to see Tina Brown back in print, just two years after starting The Daily Beast for Barry Diller at IAC and making it clear that she was crossing over to digital media and had no intention of coming back.
“I would hate to be in the magazine world. It’s a really tough world to have to compete in,” said Ms. Brown at the EconWomen conference in 2008. But that clear-eyed assessment seemed very far away on Thursday night. Never mind all that black crepe; bring on the Champagne!