Monday, January 13, 2003

Steve Case's amazing swindle. Steve Case's epitaph is that bamboozling Time Warner -- the largest media company in the world -- was an insufficient qualification for running it. Case quit as chairman of AOL Time Warner last night because the company's stock price has tanked since Case's AOL acquired Time Warner two years ago.

But as James Surowiecki observed in the New Yorker a few months ago (no link; I'm going by memory here, so bear with me), Case actually did spectacularly well by his shareholders -- that is, the folks who held hyperinflated AOL stock before the merger. AOL Time Warner's stock at this moment is $14.88, which is a lot lower than the $56 or so that it commanded at the time of the merger. But if Case hadn't gone out and bought a real company with his pile of AOL funny money, his crappy and outmoded online service would probably be trading for less than $5 right now.

Of course, the real reason I'm writing this item is so that I can recycle a bit from Tina Brown's debut column last fall in the Times of London, in which she quoted Time magazine art critic Robert Hughes's priceless letter to former Time Warner chairman Gerald Levin, the man who, more than anyone, got swindled by Case. Hughes's letter begins:

How can I convey to you the disgust which your name awakens in me? The merger with Warner was a catastrophe. But the hitherto unimagined stupidity, the blind arrogance of your deal with Case simply beggars description.

How can you face yourself knowing how much history, value and savings you have thrown away on your mad, ignorant attempt to merge with a wretched dial-up ISP? . . .

I don't know what advice you have to offer, but I have some for you. Buy some rope, go out the back, find a tree and hang yourself. If you had any honour you would.

Is that great or what? Thanks to Joe Conason for the link.

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