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— Analysis —
Looking back, the original newsweekly issues with their black-and-white newsprint pages retain much of the feel of the old daily. There was one exception: A tabloid-sized format that gave art director Larry Gendron a broad cover for distinctive, often award-winning, illustrative art. My, this is self-referential. Hell, why not? In 2002 and 2003, we finally began to wrestle with changes the Internet was unleashing on publishing. We had already integrated the Web into the newsroom, with all its tricky technical and personnel issues. But what really occurred with the advent of the newsweekly was a process of disaggregating content into print products -- daily news to The Daily Deal, analysis, commentary, features and data to The Deal -- which was then aggregated back into TheDeal.com. It dawned on us that the Web might be the future -- fiendishly clever! -- though advertisers continued to embrace print, and, importantly, many readers were habituated to paper, particularly to The Daily Deal. And if the Web was the future, could we charge for it? This dance of aggregation and disaggregation accelerated in 2003, when we launched projects that created newsroom specialties: Ken Klee arrived to start our corporate dealmaker franchise, launching a quarterly magazine in November. Then-managing editor Ed Paisley pondered how to marry deal reporting with technology coverage, a project that resulted in Tech Confidential. And we began database projects, which became a sort of hobby, like stamp collecting. All this took place against an economic climate that began in deep gloom but steadily brightened. In early 2003, deal markets stumbled along. Private equity mavens complained that banks wouldn't lend, blaming bank consolidation. A combination of Enron, WorldCom, Conrad Black, Sarbanes-Oxley, the facile argument that all M&A was bad, plus stock markets treading water sank CEO animal spirits. Only Oracle's Larry Ellison chased big strategic deals. And yet that very passivity contained seeds of revival. Many strategics were net sellers, unloading assets that didn't fit, that squeezed margins or that had been acquired by that madman, the previous CEO. Energy companies unloaded plants, pipelines, refineries, filling Auction Block, our listing of stuff for sale, which swelled like a wet sponge. Stepping into the breach: private equity, eager to harvest cheap assets if they could get financing. And so, quietly and carefully, the buyout boom began. Many 2003 LBOs were relatively small (by later standards) but big winners. While the downturn stifled returns on 1998-vintage funds ("The class of '98," Aug. 4), new fundraising blossomed. Pension funds and other institutions, hurt by the slump, reached for performance and raised allocations to alternative assets like buyout and hedge funds and to hybrid firms, from Blackstone ("Stirring the pot at Blackstone," Aug. 11) to Cerberus. By May, Wall Street had settled with Eliot Spitzer on Analystgate, big bankruptcies were memories and companies had adjusted to SOX. On the regulatory front, prudence edged back to competitiveness, particularly as pundits worried themselves sick over Japanese-style deflation. Blogging rudely emerged. Our covers marked the turn. In September we announced "A new age of M&A" (Sept. 8), followed by "Cerberus breaks out" (Sept. 15) and a look at the Oracle-PeopleSoft deal (Sept. 22). Our traditional year-end package, with its illustration by Arnold Roth, was headlined: "Revels of 2003: The year began in gloom and doom but ended -- a capitalist miracle! -- on the rebound." At 72 pages, it was our biggest issue ever. For once we had something to look forward to. Bring on 2004. |
At The Deal LLC, 2003 was the year everything changed. Indeed, much the same could be said for the deal economy, which scampered off on one of the bigger booms in history. We had started (for those of you who haven't been avidly reading this series) as a daily national newspaper in 1999, publishing 24 to 28 pages five days a week in five printing plants (including one in London) and hand-delivering it through a Balkanized network of routes strangely vulnerable to snow. This was all tiring, expensive and reeking faintly of anachronism, which was more evident to us than to, say, The New York Times. By mid-2002, with deal markets collapsing, we made several strategic moves: Start a weekly magazine mailed to subscribers, continue a stripped-down paper emphasizing daily news with more limited circulation and send everything to TheDeal.com. On Nov. 4, 2002, we published the first edition of The Deal, with then-bankrupt Kmart Corp. on the cover. 
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