Authors: Katharine Graham
I
N CERTAIN WAYS
, the defining period of my working life was over. During the turbulent years from 1971 to 1976, we had been through the major public dramas of the Pentagon Papers, Watergate, and the pressmen’s strike. Ironically, it was the next five years that were the most difficult work years I ever lived through. I sometimes felt as if I were being made to pay for having survived those earlier events relatively unscathed.
I still saw myself as an inheritor who had been very lucky. But, fortunately, after the years of public trauma, I had a fairly steady platform on which to operate. The company’s primary businesses—the
Post, Newsweek
, and Post-Newsweek Stations—were all generally progressing, but I still tended to exaggerate the things that were going wrong. Despite the recent successes, my confidence, never solid, was shaken, particularly as I began to be written about more and more for my real and perceived mistakes.
Warren’s advice and steady communication with me were critical to a number of actions I took in these years. Crucially, he persuaded me of the benefits of buying in our own stock. I had been suspicious of the idea. Repurchasing stock is a commonplace today, but only a handful of companies were doing it in the mid-1970s. I felt that, if we spent all of our money buying in our own stock, we wouldn’t be able to grow. Warren went through the numbers with me, showing me what this action could do for the company in the long run, or even in the short run. He re-emphasized how low the stock was compared with its real value and how this was a better business move than many we were contemplating. He gradually made his point: if we bought in 1 percent of the stock in the Post Company, everyone owned a larger share of our stock at a bargain price. I decided we should do it.
My natural caution, however, was such that I thought I had to convince the people around me of the importance of such a move. So I set about persuading the top executives, including the company’s legal counsel,
of the rightness of this decision. Finally, we agreed and took it to the board, who okayed the stock repurchases. In fact, the board quickly saw what a good idea this was, and didn’t want to stop. Over the next twenty years, we bought back 45 percent of the stock.
My management troubles may have derived mainly from my lack of business experience, but they were multiplied by not having a real partner to help me run the company. By the time of the strike, it was clear that Larry Israel, who had been president and chief operating officer of the company since Fritz’s death in 1973, was not working out. When I concluded after a great deal of consultation that this situation just wouldn’t get better, we made a decision to part ways and announced Larry’s resignation in January of 1977. When he left, I took back the title of president, retaining the chairmanship of the company as well, until we decided what to do about a new COO. The announcement of Larry’s departure was greeted with a batch of negative stories of which I was the target.
Time’s
piece on the move was titled “Krusty Kay Tightens Her Grip.” After describing me as difficult to get along with, mercurial, impulsive, manipulated by an “eminence grise”—meaning Warren
—Time
concluded by acknowledging, “Whatever the problems, Graham’s company will show record profits and record revenues.”
I particularly detested the sexist implications of stories like these—always being depicted as the difficult woman, while whoever left the company was the victim of my female whims. I was still a curiosity, a woman in a man’s world. Men like Bill Paley, Al Neuharth, Mort Zuckerman, and Joe Allbritton fired executive after executive, but no one attributed their actions to their gender.
Also at this time, I had some grave concerns about the quality of the paper and of the editing. I felt that the national staff and the metro staff had let down, that we were doing things superficially. Ben didn’t agree with me, but Bob Woodward did, putting it succinctly one day: “The paper is going down the shit hole.” It is to Ben’s great credit that he and I survived the difficult times and all my questioning. I could still come on like a dentist drill at moments like this, but he hung in, and balance would get restored. Sometimes he would do things despite my views, and sometimes he was right to do so. If he was mistaken, he would correct the mistakes in time, as soon as he agreed that something wasn’t working. Not listening to me—and to others—was both Ben’s strength and his weakness. However, as I wrote him at the time of this disagreement about the quality of the paper, “No superficial problems either of us may have at any particular moment matter compared to the basic trust and rapport with each other. Because if that’s there—and it is there as far as I’m concerned—all else flows from it.”
Another area I was worried about at the
Post
was the editorial page.
Phil Geyelin seemed to go into a prolonged slump after Watergate. I tried to assure him that, though I felt the page needed revitalizing, I had confidence in his ability to do it. I talked to him about how the complexity of my job and the pressures on my time had left me out of touch with him somewhat; I no longer participated to the extent I had earlier in editorial and management meetings at either the
Post
or at
Newsweek
. I assured Phil that I would try to remedy the situation and help in any way I could.
There were also problems at
Newsweek
. The magazine was doing well in operating revenue, and the business was remarkably good. On the editorial side, however, 1976 was the beginning of some high-level management turnover that affected both the magazine and me personally. In October of that year, after leaving and returning to the magazine, Oz Elliott, who had been
Newsweek
’s editor-in-chief and board chairman, suggested a sabbatical so that he could help save New York. Convinced that his mind was on other things, I had to let him go, and not just on sabbatical. Our mutual affection withstood the trauma, and I have nothing but admiration and gratitude for Oz, who left to become deputy mayor of New York City. Ed Kosner, who had become editor in September of 1975, remained responsible for the general editorial direction of the magazine.
When Oz departed, Bob Campbell, who had become
Newsweek
’s president in 1975, assumed Oz’s title of chairman and was succeeded as president by Peter Derow, who had come to
Newsweek
straight out of Harvard Business School in 1965. Peter was, I thought, an able, ambitious, attractive young man who knew his business. I saw him or talked to him frequently, believed in him, thought of him as an associate I could lean on, and viewed him as the promise of the future.
Although I considered myself inadequately educated and experienced for the role I was playing, I did think I was pretty good at appraising people and their performance. In fact, Peter’s performance was fine in many ways, and he had smoothly worked his way up to the number-two position under Bob Campbell. I had realized that he was highly political, never a healthy sign, but I was stunned one day in the middle of 1977 when he told me he was leaving to become an administrative vice-president at CBS. I was disappointed by that, but he didn’t stop there, going on to tell me that he wanted to be in a healthy, vibrant, well-run company, as opposed to the poorly run one I was operating. He said that he felt I was a hopelessly inadequate leader and that he had little choice but to leave for the dynamic CBS. He touched a raw sensitivity when he assaulted me for not being a professional manager, and I must confess that I wept on and off for at least two days. I didn’t acknowledge to myself that his was a highly irregular way to leave a company in which he had achieved success and that had done well by him for twelve years.
Embarrassed as I am to admit it, I worried so much about losing this
man that I actually offered him the presidency of the entire Post Company if he would stay. Peter was determined to leave, however, and told me it would take too much out of him to take on the job—he was thirty-seven at the time, I believe. The issue, he said, wasn’t a specific position or a title at the company but, rather, “Do I want to spend the next ten years educating myself and educating the family as to how this business ought to be run?” He added that to stay at The Washington Post Company “would take someone with much more patience than I have.”
A few weeks later, he departed with encomiums from us—elaborate speeches from me about how wonderful he was. Privately, I knew that I wouldn’t soon forget the personal verbal lashing I had taken from him, and I worried about how right he might have been.
In one of the more bizarre events of my working life, just six months later Peter and I had lunch together in New York, and he sounded me out about returning to
Newsweek
. Unaccountably—stupidly—despite the powerfully deflating effect of all he had said to me, I said yes right away and welcomed him back, especially since we had not yet found his successor. In another month, he was once again president of
Newsweek
.
At the company, in corporate, from the time of Larry Israel’s departure in February 1977 until close to the end of that year, I was essentially alone as both chairman and president, and was still the publisher of the Post. But Warren was supporting me, figuratively at least, on one side, and Don Graham was growing increasingly important on the other, and at the end of 1976, we had promoted Mark Meagher to president of the newspaper division. Simultaneously, Mark named Don executive vice-president and general manager of the Post, responsible for its day-to-day operation. In November 1977, we promoted Mark to president and chief operating officer of the entire company. Mark was young and, in some respects, short on experience and maturity, but he had done a good job for us, especially during the strike, and, not being quite sure what I was looking for, I thought it better to stay with a known quantity.
I
N THE MID-1970S
, my focus was on how to grow the company. The question of growth and acquisition had never been addressed in an orderly way. Neither Fritz nor I had known how to go about it, and in fact had rather unqualified people passing judgment on important issues. We had little more than a hit-or-miss strategy, with no logical point of departure, no consistent way of analyzing possible purchases, and no experience with negotiating targets we were aiming at. Of course, at least in the early seventies, our debt was still considerable, and our profits were not large enough to give us much leeway to grow, so in some ways the point was moot, but I wanted to be poised for growth when the opportunity presented itself.
Basically, I was baffled even about how to organize a group to think about expansion. As it was, one person might make a suggestion and the idea would lie on the table while several of us chewed on it in mostly un-analytical ways. At one moment in mid-1979, Joel Chaseman, president of Post-Newsweek Stations, and Mark Meagher, among others, were pushing for us to undertake a cable news network. I disapproved of the idea for us, but there was such a head of steam that I let them present it to the board, which turned it down. Although their memories and mine are at odds about the chronology of all this, I thought that the idea had not only already been conceived by Ted Turner, but had begun to be implemented; he was very determinedly barreling ahead, even though his network was not yet launched. There clearly wasn’t room for two such enterprises, if there was room for one—a real concern of mine at the time. In fact, it took many years for Turner’s Cable News Network to become a success, and only now are several other companies entering the field.
I started to look into properties that I’d hear were available. Warren was of especial help on acquisitions, knowing to some degree about almost every deal that was taking place or had taken place in the previous ten years. One potential acquisition we considered was a television station in Buffalo. Warren advised me that the newspaper, which was also for sale, would be a better buy, and if we didn’t want it, he did. Although dominant in its market, the paper had strong competition, strong unions, and no Sunday edition. When we decided not to pursue it, Warren bought it and after considerable struggle managed it to great success. I still feel we made the right decision for us.
How ill-prepared we were to manage another, smaller paper was amply demonstrated by the problems we were having with the
Trenton Times
, which we had bought in the spring of 1974. I had shared with Warren a memo describing and evaluating the deal and using some valuation parameters that caused him consternation, though he didn’t mention it at the time. Obviously, we hadn’t done sufficient research into the market. Nowhere in the memo, according to Warren, was there any indication that Trenton was not a single-newspaper town, the competition being a lively morning paper; in evaluating the deal, the memo used illustrations from monopoly cities. Warren apparently went into orbit at the oversight, but was restrained since he wasn’t yet on the board.
We offered $16 million for the property, probably about $4 million too much. I had enough sense so that when, at the last minute, one of the sisters in the family selling the paper wanted more money and it looked as if the deal might be held up, I said, “Good, let’s can it. If they want more money, just say no. Let’s use this opportunity to walk away.” I had reacted instinctively, but everyone else in the meeting—including Larry Israel, Mark Meagher, and Ben—rose up to say, “What’s the matter with you?
Don’t you want this company to grow? Don’t you want to make any acquisitions?”
I certainly did, but I didn’t want to buy trouble. Unfortunately, with the
Trenton Times
, an afternoon paper in an era when we knew what was happening to our afternoon competition in Washington, that’s what we would be getting. Nevertheless, I relented, and we took possession of the
Trenton Times
, adding another worry to my list of concerns.
Indeed, we never learned to manage the paper, and we ran it abysmally. (It’s true that we also were in the throes of a bad economy.) There were circulation and advertising-linage setbacks right from the start. We hired some excellent people and some who used the job as a springboard to the
Post
, but we overloaded the paper with people more appropriate for Washington than for the
Trenton Times
. We made every management mistake in the book, including offending and alienating the local establishment with a particularly savage “Style”-like report on one of the city’s main social events, criticizing people’s clothes, bibulous behavior, and so on. We had a succession of mostly inappropriate publishers who, with one exception, didn’t understand the community. We edited the paper well by our standards but poorly by theirs. Instead of thinking about what was the right paper for this particular community, we seemed to edit the paper as though we were thinking of what the community
should
read. I think there was some arrogance involved: we were going to bless them with a minor version of
The Washington Post
. Some people derisively referred to it as
“The Washington Post, North.”