OUT-FOXED

Simultaneous to Nik Cohn's highway robbery, Felker was in the fight of his life to maintain control of his magazine.  Felker was up against a ruthless billionaire named Rupert Murdoch.  Making matters worse, Felker's dilemma was a self-inflicted wound.  It was Felker's own fault for letting the fox inside the henhouse.

Felker was a terrific editor, but he had one major weakness... he liked to spend other people's money.  Felker's expenses were so exorbitant, they out-stripped the magazine's resources.  His lavish spending on limousines, office space, costly parties and personal chefs drew heavy criticism from his magazine's board of directors.

One day Felker demanded they buy him a house in the Hamptons so he could throw bigger parties.  That was the last straw for the magazine's Board of Directors.  Clay Felker had grown too big for his britches.  In 1976, New York was going broke.  Fed up with his rampant spending, the Board told Felker to find a solution or start looking for another job.

Felker did not like being told to tighten his belt.  No one talks to him like that.  Why not just buy the magazine himself?  Then he would have the last laugh.  But first he had to find a sugar daddy.  Clay Felker had recently been introduced to Australian media mogul Rupert Murdoch by Katherine Graham, publisher of the Washington Post.  Graham had asked Felker to show the city to the new kid in town.  They lunched downtown and lounged seaside in the Hamptons while discussing mutual business ventures.  In the process, the two men became friends.  Or so Felker thought.

Rupert Murdoch was an Australian-born press baron who had just paid $30 million to add the New York Post to his chain of newspapers in Australia, Britain and the United States.  Hoping to impress Murdoch, one day Felker invited his so-called savior to visit one of his lavish parties.  No doubt Murdoch's eyes bulged as Felker guided a parade of celebrities, businessmen and politicians over to meet him.  No doubt this was the moment Murdoch realized that Felker's magazine could be of value to him. 

Taking note of Murdoch's deep pockets, in November 1976, Felker made a bold move.  He casually mentioned his boardroom problems to his potential benefactor, then asked if Murdoch might be interested in making an investment in the magazine.  Murdoch's eyes lit up immediately.  Felker's suggestion was akin to asking the friendly neighborhood fat boy to watch his hot dog for a while.  Thanks to Felker's big mouth, Murdoch had just realized the smart, sophisticated New York magazine was not only in play, it was exactly what he was looking for.   

Licking his chops, Murdoch smiled politely, then offered an invitation. 

"Why, sure, Clay, why don't you drop by my beach house this weekend?  Let's have a talk!"

Felker must have been in some sort of fog.  Or perhaps he had fallen under the spell of 'Cosmic Blindness'.  You knew I was going to bring that up, didn't you?  Ordinarily a shrewd man with killer instincts, Felker had missed what Nik Cohn was up to.  Now he missed what Rupert Murdoch was up to as well.  Felker did not seem to understand that Murdoch was looking to expand his media empire.  That was why Murdoch had come to New York in the first place.  Murdoch had started with the purchase of the New York Post, a blue-collar tabloid.  For his next conquest, he could use this magazine as a way to court favor with the city's wealthy movers and shakers.  

Meanwhile Felker remained blind to the danger.  He was so certain that Rupert Murdoch was a well-meaning buddy, Felker poured his heart out to Murdoch during a fateful weekend in the Hamptons.  Journalist Susan Braudy offered this startling eye-witness account:

"I had dinner with Rupert and Clay at Murdoch’s rented house in Southampton.  I was there as a weekend houseguest of Clay Felker, the publisher of New York magazine.  Murdoch’s daughter and son served steak and fresh baby peas.  Flawlessly tasteful.  Intimate.  A stealthy trap.  For Murdoch, the dinner party was a high-level espionage mission. 

Clay had no inkling that Murdoch was secretly positioning himself to steal New York magazine out from under him.  Clay was loquacious throughout the meal.  He explained Manhattan things to Murdoch who Clay clearly saw as a bit of an Aussie rube.  Clay waxed eloquent about his writers Aaron Latham and Gail Sheehy who were present at the meal.  Clay explained my presence in terms of Ms Magazine which he had helped launch.  This is where I wrote and edited.

Clay bragged about his fabulous parties.  He confided to Murdoch that he got his best stories by listening to dinner party conversation.  He was oblivious to his mistake.  This time it was Murdoch who was doing the listening, turning the tables so to speak.  Clay got no stories at this dinner because Murdoch said almost nothing.  He asked one or two flattering questions and that was it.  Murdoch was doing to Clay what Clay usually did to everyone else... listen and think of ways to take advantage.

A month or so later, Murdoch seized New York magazine and instantly fired Clay despite assurances to the contrary."

Clay Felker had been out of his mind to speak so candidly to the fox. 

Andrew Tobias, one of Felker's writers, had this say:

"Clay was not great with money.  He was always asking me for financial advice like how he could stint on his editorial package.  Clay's bread and butter was creativity.  The stories, graphics and writing meant far more to him than profits.  Then came the day he met a terrific young Australian publishing tycoon.  Clay told me, “Andrew, you’ve got to go meet this guy!” 

Clay assumed he was setting up Murdoch to be his shining knight.  When Clay sent me over to visit Rupert Murdoch, Murdoch ended up interviewing me about the magazine.  That's when I got that funny feeling.  Sure enough, to Clay’s consternation, Murdoch grabbed the magazine right out from under him."

Once Murdoch realized Felker had alienated the board of directors, he saw his opening.  At the same time Murdoch was sharing meals with Felker, he was negotiating behind Felker's back with Carter Burden, the magazine's majority shareholder.   According to the New York Times, Murdoch made a secret offer to the board of directors to buy New York magazine.  Clay Felker never saw it coming until it was too late.   Worried he might lose his magazine, Felker asked Katharine Graham to back him in a bid to keep the company.  When Graham learned of Murdoch's backdoor dealings, she called Rupert Murdoch to beg him to reconsider.

“Don’t do this to the boy, Rupert.  Don’t destroy this boy, don’t take this boy’s magazine from him.”

Murdoch could have cared less, so Katherine Graham tried another tactic.  She offered to buy out Carter Burden, the principal stockholder, who held 24% of the stock.  That is when Felker's Karma came back to bite him in the ass.  Carter Burden had once been the subject of a highly unflattering profile in Felker's magazine.  Holding a grudge, Burden turned down Katherine Graham.  On the following day Murdoch flew to Sun Valley, Idaho, where Burden was skiing.  There on the sunny snow-covered slopes, the two men made a deal.

Murdoch had sensed weakness.  He was a shark and there was blood in the water.  Felker might be a great editor, but he was a lousy businessman.  Given how fed up the Board was with Felker's spendthrift ways, all Murdoch had to do was wave money and they took it.  The moment Murdoch bought the New York magazine, he told Felker to hit the road.  Despite Felker's deep connection to his baby, Felker was of no use to Murdoch.  A ship cannot have two captains. 

Felker felt betrayed, stabbed in the back.  He had expected Murdoch would help him acquire New York magazine, not take it for himself.  He had trusted the wrong person.  Felker was down to one last hope.  His stable of talented writers was deeply loyal.  They threatened to revolt if Murdoch fired Felker.  However, the writers got nowhere.  Murdoch called their bluff.  If they left, Murdoch said he would replace them faster than the furniture, adding that there's always another English major hungry to make their mark.  Besides, try finding another job in this market, especially after Murdoch put the hex on them.  The revolt collapsed faster than a punctured balloon. 

Here is how Richard Reeves, one of Felker's stunned writers, put it:

"Part of what happened was Carter Burden, who was majority stockholder.  Burden hated Clay because Clay hated him. Clay had no use for people like Burden or the other money people. He - mistakenly, I think - treated them like dirt.  Clay paid a heavy price for that attitude.

[After Murdoch took over] this was a time that we all thought the power was with the writers, with the creative people.  We were wrong.  In a way we were forced to learn what they already knew in Hollywood: That’s not the way it is.  The power is with the money.  While we wrote about that all the time, and while Clay understood this fact of life intellectually, as a businessman I don’t think he got it.  That is what led to his downfall."

Gay Talese, writer at Esquire:

"Power and the access to power is a kind of addiction that sooner or later takes over the brain waves of an editor.  Clay papered that house of his with personalities and recognizable people, people who were going to fit into his plan as writers, art directors, girlfriends, a movie star.  When I first saw him was at a party with Sammy Davis Jr and Jacob Javits and there were pretty girls abundant.  Being around so many important people, I think it went to his head."

1976 and 1977 were tough years for Felker.   The toughest blow of all was losing his beloved magazine.  Once Murdoch showed him the door, Felker was heart-broken.  He was also out of a job.  Humiliated, Felker lost his pride, his job, and his magazine, the most precious thing in the world to him.  Felker had been synonymous with New York magazine.  But not any more.  Clay Felker was being called a loser, a chump. 

Felker had been outsmarted by Nik Cohn and outfoxed by Rupert Murdoch.  No one but Felker knew the inside story of how Nik Cohn had embarrassed him, but the Murdoch situation was different.  Felker's giant reputation was badly tarnished when the news emerged about how Murdoch had tricked him.  Imagine what it must feel like to become the laughingstock in the media capital of the world.  People laughed at his downfall. 

No doubt Felker was keenly aware that his self-destructive behavior had gotten him into this fix.  What is Rule Number One when dealing with people who have control of your Destiny?  "Don't bite the hand that feeds you."  Felker was forced to acknowledge how his unflattering profile of Carter Burden had led to his destruction. 

Brightest Day, Darkest Day.  This was Felker's Darkest Day.  Saturday Night Fever was being filmed in Brooklyn at the same time that Clay Felker was wrestling with Rupert Murdoch.  Shortly after Felker was fired in late 1977, the movie debuted in December.  At the exact moment Clay Felker was thrown out on the street, he was forced to watch helplessly as the box office and soundtrack made Saturday Night Fever one of the most lucrative films in cinematic history.  This had to be the lowest moment of his life. 

Everyone who touched this movie got rich.  Nik Cohn came away with half a million.  Robert Stigwood made more money than Midas.  John Travolta and the Bee Gees rocketed to stardom.  Felker was aghast to realize he was the big loser in this amazing bonanza.  In particular, he seethed at the indignity of letting Nik Cohn leapfrog to the stratosphere using his unwitting shoulders for lift-off.  

Feeling like a chump, it is fair to assume Felker sought redemption.  Bitter at his fate, Clay Felker decided he had a score to settle.  So what was he going to do about it?