Original Publication – Vogue – 11/1/1988
The code word was Delta. The principles were Titans, the price was staggering. In thirty-four days last summer, media matchmaker and investment banker John Veronis labored in secret to pull off the largest deal in publishing history: the $3 billion sale of Walter Annenberg’s private media empire, Triangle Publications, Inc., to Rupert Murdoch’s NewsCorp., Ltd. As broker for Triangle – TV Guide, The Daily Racing Form, and Seventeen – Veronis reportedly collected a fee of more than $12 million, which works out nicely to a little more than $350,000 a day.
Part of that windfall was simply – or shrewdly – being at the right place at the right time. Except for winning the lottery, the best way to become an instant millionaire these days seems to be as an investment banker cashing in on the frenzied merger mania and acquisition obsession that’s been gripping U.S. business for several years now. And in an era of high-rolling risk-taking tycoons like Rupert Murdoch, there is no better place to position oneself than the communications industry. Corporate ownership of magazines and newspapers has changed hands, merged and remerged with alarming rapidity over the last few years, and since 1984, ABC, NBC, and CBS have new owners. Murdoch himself bought seven U.S. stations to try to form a fourth major network.
Many of these risks seem well cushioned. According to recent business forecasts, communications will continue to lead all U.S. corporations in its rate of growth during the next four years. Moreover, specialists like Veronis, who began his own firm in 1981 to broker communications deals, believe Wall Street has consistently undervalued their worth.
“As long as you have rising levels of education throughout the world, expanding needs for information, greater common experiences among people in terms of traveling and sharing other cultures, plus the exploding growth of business globally,” says Veronis, “you are going to have constantly growing needs for information, for entertainment, for media of all forms.”
Yet even an industry cheerleader like Veronis could not have predicted the breathtaking outcome of what he thought was just another routine call from someone with whom he’s kept in close touch, Walter Annenberg, or “The Ambassador” as the former representative to the Court of St. James likes to be called. The proposal Veronis heard last July was startling and sweet. The Ambassador, now eighty years old, wanted to sell Triangle for ten figures, and he had a buyer in mind: Rupert Murdoch, a fellow billionaire and fellow conservative with access to worldwide banking, who could make his own decisions quickly without having to go through boards and corporate red tape. Not insignificantly, Veronis had already done four previous deals for Murdoch, including the acquisitions of New Woman and European Travel & Life.
Veronis moved into action as soon as he finished with Annenberg’s call. He reached Murdoch in London. “I just said, ‘Rupert, I’ve got something to talk to you about and I think you’ll find it quite important.’ I told him nothing else until I sat down with him two days later.” On Thursday, July 7, they met at Murdoch’s New York City office, where Veronis quoted the price and spent an hour and a half going through each Triangle publication. Murdoch, known to pay top dollar for properties that really excite him, didn’t blanch – he was definitely interested. On July 9, Murdoch picked up Veronis in the Hamptons in his private plane and the two flew down to Annenberg’s estate in Pennsylvania for lunch.
The meal lasted two and a half hours but money was never discussed. Instead, the two media barons took the measures of each other. Murdoch wanted to know the history and evolution of TV Guide. They conversed about the future of cable, and the fact that more states are adopting off-track betting to fund education programs. “It was that kind of societal talk – where each publication fit into the society,” said Veronis, who acted as the sole go-between. “Then, I don’t think Murdoch and The Ambassador spoke again until a dinner party August 2 at Murdoch’s house in Beverly Hills.”
In the meantime, however, Veronis and one associate had scores of phone calls and a dozen meetings with Murdoch and a few trusted NewsCorp. executives. “We began to supply him with specific information,” says Veronis. The deal was so secret, howeer, that in the beginning there was nothing on the pages to indicate what the figures alluded to. Inside Veronis, Suhler & Associates, Inc. – Veronis’s company – the code word for the deal known only to Veronis and his single associate, became Delta, the Greek letter in the form of a triangle.
Until very late in the negotiations Annenberg was acting completely alone. The day of the dinner party, a Tuesday, Veronis spent several hours in the morning with Annenberg and met Murdoch in the afternoon. The day after, the three of them met at the home of Annenberg’s daughter Wallis, in Los Angeles’s Holmby Hills. “On Wednesday the figure began to harden,” says Veronis, “and on Thursday morning, August 4, the deal was set.”
All that was left to do was draft a press release. On Saturday, Annenberg called a few key Triangle executives to tell them the news. That night, he and Murdoch let the world out at another Beverly Hills dinner party. When the news hit the wires on Sunday, August 7, at least one TV Guide executive, hearing of the sale for the first time on his car radio, nearly drove off the road.
Almost immediately the papers were filled with financial analysts wondering at the prices. They still are today. “Murdoch’s either the most brilliant man with a vision mere mortals can’t understand, or one of the craziest,” said a stunned colleague of Vernois’s from a major Wall Street house. “The price is off everybody’s calculator.”
The jewel in the crown of Annenberg’s dominion, of course, is TV Guide. With that acquisition, Murdoch is getting the largest-selling magazine in the United States (seventeen million weekly), plus a formidable supermarket distribution network that could help Murdoch’s other publications like The Star and New Woman. The hugely profitable Daily Racing Form is a virtual monopoly in a world where off-track betting is proliferating. For the future, it is possible that Murdoch, who owns Twentieth Century Fox, Fox TV and a European Sky Channel could adapt the information in TV Guide with its thousands of summaries of shows and movies to an electronic data base for use on home computers. But is all that worth three billion? Naturally, Veronis thinks it is.
In fact, to hear him tell how the highly secret deal unfolded, when two tycoons want something to happen, it does. “The price was very much in the framework of what we discussed in the beginning,” he says. “It was never far from where it concluded.” Says one Triangle executive, “It certainly doesn’t hurt to conclude a deal of this magnitude when The Ambassador, a great pal of President Reagan’s, can count on a compliant Justice Department.
Indeed. And for investment banker John Veronis, who formed his company in the belief that Wall Street vastly underrated the value of media companies, a month’s work had not only made him rich but right.
This article is typed from the original material. Please excuse any errors that have escaped final proofreading.
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