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Distressed Asset

Why's Condé Nast's Portfolio So Bad?

The second issue of Condé Nast's big-budget business mag, Portfolio, arrived on newsstands last week and I plucked one from atop an enormous stack of them at the Union Square Barnes %amp% Noble in New York. Between the weeks of media coverage citing long weekends, staff disagreements, reports of fewer ad pages in the second issue and more recently, the public firing of deputy editor Jim Impoco, the magazine has created enough internal melodrama to stoke curiosity--mine, anyway--about how well the second effort stacks up to the first. The temptation to speculate about the skyscraper stack of Portfolios being indicative of oversupply (the money and resources the company is pouring into the publication) or lack of demand (the target audience isn't interested in reading it) lingers, but one retail outlet isn't a legitimate sample size.

And neither is one reader. But if Portfolio were a high-end business magazine, I'd be an enthusiastic subscriber. The problem is that it's not. Press coverage has referred to it as a "Vanity Fair for business." It's not that, either.

The unfortunate thing is that it could be both. Portfolio should be a magazine about power, specifically in the private sector: who has it, how they got it, what they do with it, and whether they're using it for good or evil. (If you're going to write about Cerberus, for example, I have less interest in how secretive Steve Feinberg claims the firm is than what sort of deals John Snow is cutting in China, with whom, and to what extent the Chinese government is involved--something that has wider-ranging implications than the notion that some hedge-fund managers play against stereotypes and drive pickup trucks.) The magazine should exploit the biggest major advantage that print has over the web and that monthlies can generally do better than weeklies--long-form narrative journalism. There are huge swaths of the private sector that aren't materially covered right now. These are stories that existing mass-market business publications mostly bypass: They tend to cover large public companies; which are most relevant to the average investor. But that's a very narrow view of the business world. It's fine for The Wall Street Journal, which purposefully and usefully focuses on investors, but limiting for a general-interest business magazine.

That Portfolio hasn't taken advantage of its opportunity is probably a reflection of editor-in-chief Joanne Lipman's background, which most famously consists of launching The Wall Street Journal's "Weekend Journal," a lifestyle-oriented section that had little to do with covering hard business stories. And Portfolio's flaws seem to be rooted in its editor's entrenched habits from doing a very different sort of journalism.

When the first issue came out, I panned it pretty aggressively on a Wall Street website I founded called under the headline "Even Our Pessimism Was Optimistic" (which is why this publication asked me to take a look at the second issue). You can read the review here.

My central complaints about issue one: It was pretentious without being sophisticated. It lacked substance and didn't have the courtesy to compensate with style. It talked down to the reader and spent much of its editorial space explaining simple concepts and background information that its supposed target audience--mid-to-senior level executives in their early 40s--would already know. It was fluffy. And it didn't bring any substantive new information to light.

The second issue is slightly better is small ways but still suffers from those primary weaknesses. The front-of-the-book is denser than in the first issue, with a few pieces that are nice curiosities (whatever happened to Ted Turner's billion-dollar UN donation; short bios of the major presidential candidate's top economic advisors; a breakdown of sponsorship deals for a pro golfer) but there's nothing that really qualifies as need-to-know, or worst case, decent cocktail party conversation.

And there's still the dumbing down, some of which is impossible to distinguish from the editorial staff's inability to parse the issue themselves. Take the first essay, by Kevin Maney, "Bipolar Nation." The subhead: "On the East Coast, it's all about hedge funds. Out West, venture capitalist rule. The question: Why can't they all just get along?" It implies that there's an inexplicable split between the two, despite the seemingly obvious facts that hedge funds overwhelmingly fund later-stage companies and venture capitalists generally provide early stage or mezzanine financing, which means they're not terribly competitive in the first place. Add to that the academic R&D base on the West Coast (Stanford, CalTech, etc.) that doesn't much exist in New York, and it's clear why early-stage tech investors generally prefer to be on the West Coast, and later-stage investors would prefer to be closer to sources of liquidity and corporate finance and trading talent pools, most of which are on Wall Street. "Both coasts are hot at the same time, which is weird," says Maney. Weird to whom, exactly? Anyone besides the editors at Portfolio?

Another piece, titled "Get a Job," explains the survey process for determining the unemployment rate. It begins, "The Employment Situation Summary is released on the first Friday of every month..." If you're in a position where you need to care about the unemployment rate (and most of Portfolio's supposed target audience is), you already know this. And you already know almost everything that follows, most of which was covered in freshman year Intro to Microeconomics. If Portfolio must talk about the mechanics of unemployment rates--and really, must it?--it could easily offer some commentary on issues people actually talk about with regard to unemployment statistics, i.e., worrying underlying trends that the numbers systemically mask. Instead it reads like an entry from a high school textbook.

Now let's take a look at some of the features:

Leaving aside the issue of whether Cerberus's insistence on picking up a distressed asset nobody else wanted is really "terrifying" Wall Street, this piece centers mostly around Stephen Feinberg, who runs the $26 billion firm, and about whom no one has anything negative or even remotely skeptical to say. (A typical insight: "Take your brain and mine, take them to the 28th power, and you have Steve Feinberg.") Much is made of the secretiveness of the firm, which is really no more secretive than any other major private equity firm whose principals understandably eschew press coverage for, among other reasons, fear of increased regulatory scrutiny. The Portfolio writer sat in on an investor's meeting and transcribed some of Feinberg's quotes, wherein Feinberg cracks a couple of jokes about not liking press coverage. One suggests that he'd kill any employee whose picture ended up in the press, which Portfolio takes quite seriously, despite Feinberg's record of hiring high profile people (Dan Quayle, John Snow), issuing press releases about it, and allowing company employees to make statements, even if he won't talk to the press himself. Inasmuch as the actual Chrysler deal is discussed, it's entirely in generalities. This otherwise stale story, which mostly rehashes existing reportage, could have been made interesting with some specifics about Cerberus's 100-day plan for the company and details about what has been concretely accomplished so far, or even a more complex portrayal of Feinberg that tells us something new. But we don't see that.

As in the Chrysler story, Portfolio starts the piece with carping about how difficult it was for the reporter to get the story in the first place. The reporter amusingly succeeds briefly in gaining access to Yankee's chief George Steinbrenner by wheeling an 84-year-old friend of Steinbrenner's to his home, knowing that Steinbrenner would agree to see him, and ambushing him with questions, none of which were answered. Seeing Steinbrenner is of course a scoop in itself, but not one that props up a feature this long when it's not followed by a substantive story. The rest of the piece is a write-around, and not a bad one, although given Steinbrenner's notoriously colorful personality, woefully short on color. But I can't help but think: given the wide universe of available stories, should this be a marquee story in a business magazine? I think no.

The mystery of Google, and its primary competitive advantage, is its super-secret only-intelligible-to-Stanford-comp-sci-PhDs search algorithm that seems to make Google's search engine more effective and efficient than its obvious competitors. If Portfolio had any dirt on the specifics of the algorithm, that would be interesting. But it doesn't. Instead the story diagrams Google's server architecture, which is not unusual for a search company, and aside from maintaining speed and reliability, has no bearing on why Google is the market leader in search. This is akin to explaining eBay by taking someone into the company's server room and pointing to a bunch of boxes in racks and claiming that those boxes are why eBay is so successful.

Inasmuch as Portfolio is able to generate original stories, they're unimportant--i.e., the story about a contract dispute between Dick Snyder (who hasn't done anything of note since he got pushed out of Simon %amp% Schuster) and Edgar Bronfman Jr. (a living, breathing example of the dangers of nepotism who will be forever walking around with Barry Diller's tire tracks on his forehead) that basically boils down to this: there was no actual contract, and the dispute affects no one except the two aforementioned parties. And Portfolio doesn't add value to existing stories: Reviewing Mitt Romney's business background is useless if you can't get him to tell you where he's going to come down on controversial economic issues. What's more, it over-explains things that would only need explaining to readers who consume no other business news, have no business background, and possibly, double-digit IQs. If you're trying to introduce teenagers to business, that's fine. If you're talking to a senior executive at a large company, you're not going to have to explain why the U.S. can borrow money from less wealthy countries.

In Lipman's editor's letter, she writes, "Private equity, hedge funds, sub-prime mortgage lenders--all have thrived in recent years and, in some cases, are imploding now, thanks to the astonishing lack of transparency... We launched Condé Nast Portfolio in May to peel back the intrigue..." I can't think of a single hedge fund collapse that occurred thanks to a lack of transparency, but aside from that, the only thing Portfolio has peeled back is pages of the archives of other publications that have already covered most of what they're writing about. Again, this is probably a function of editorial leadership, which is presumably unaccustomed to producing long-lead stories that will be fresh months after they're assigned.

Maybe what's needed is an editorial change at the top. Rather than whining about Portfolio's mediocrity and leaving it at that, here's a somewhat left-field suggestion for a replacement candidate:

Tina Brown.


If nothing else, Brown understands and is innately interested in power and powerful people. (How else to explain her long-running friendship with Henry Kissinger? Or anyone's friendship with Henry Kissinger?) Any magazine about power elites in America these days would be, by default, a magazine about business people--the people who, in Godfather-speak, inevitably "pull the strings." And if Brown didn't know who those people were immediately, she'd figure it out, probably as much from personal interest as professional. She also indisputably knows how to do long-form narrative. Any concerns about her ostensible lack of knowledge in the business and finance departments are mitigated by the fact that the current regime seems to understand so little about those subjects that Brown would have nowhere to go but up. If you're going to do a Vanity Fair for business, maybe you need an ex-Vanity Fair editor. (Vanity Fair proper is less a magazine about power than a magazine about glamour--1920s Hollywood, decaying plutocrats and titled aristocracy, up-and-coming starlets and whatever Bono happens to be doing at any given moment. Despite the titling, every issue is The Entertainment Issue. It wouldn't be particularly competitive.) The magazine's budget is also large enough that even Talk-levels of excess wouldn't make a dent. And as far as we know, Brown's currently unemployed.

Note to Si Newhouse: Devil you know, etc...

Disclosure: Condé Nast HR asked me if I'd be interested in working on the magazine in late 2005 and I came in and had a conversation with Joanne Lipman, where I got the sense that it was going to be a lifestyle publication, which is not my thing. I never followed up and neither did she. And a few months ago, the managing editor of the website asked me if I'd be interested in blogging for the website. I said no, but not because of my opinion of the magazine; I just have no interest in full-time blogging at the moment, even for myself.

By Elizabeth Spiers