Playing New York's Power Game

New York magazine, Founder-Editor Clay Felker likes to remind his readers, is about "how the power game is played, and who are the winners." In or out of print, there has been no abler exponent of the Felkerian philosophy than the ingenious Felker himself. From its first issue of April 8,1968, his avenue-smart urban-survival one-upmanship manual has exerted an influence far beyond its current 375,000 circulation and Manhattan bailiwick. Though it is frequently footling and vulgar, the weekly's intelligence and imaginative thrust have given its aggressive boss the money-power to take over the raffish, rambunctious Village Voice in 1974 and, last year, to start New West, New York's California clone. They were to be only the first provinces of a Felker empire.

That is not how the power game has turned out for Editor Felker, 51. Last week two of the biggest potentates in publishing battled for the feat of Clay. The combatants: Katharine Graham, 59, board chairman of the Washington Post Co., which in addition to the D.C. daily owns Newsweek, the Trenton Times and four TV stations; and Rupert Murdoch, 45, buccaneering Australian proprietor of ten major newspapers and eleven magazines--including, as of last week, New York City's afternoon daily the Post, where he is editor in chief. Up for grabs: control of the umbrella New York Magazine Co.

Six weeks ago, sensing that some major stockholders had tired of his profligate ways and wanted out, Felker confided to Murdoch his fear that he might lose editorial control of the company. Next thing Felker knew, Murdoch was negotiating with the biggest (23.8%) stockholder, Manhattan Socialite Carter Burden. In near desperation, Felker turned for help to Kay Graham, an old, close friend. By week's end, Murdoch seemed to have the upper hand after the bidding had gone to $7.50 a share for stock that had been traded over-the-counter for $2 a month earlier, raising the paper value of the company to some $13.4 million and attesting to its potential worth.

Managerially, the triple Felkerburger--New York, Village Voice, New West--had become something of a monster. Says a company insider: "With one magazine, Felker could get away with his highly personalized approach. But it's impossible with three publications 3,000 miles apart."

The Bottom Line. Start-up costs of New West, originally estimated by Felker at $1 million, ran over $3 million. Though New West is fat with ads and has a heady 240,000 circulation, expenses are outstripping revenues. Village Voice is still profitable, but its net income has dropped since the takeover. Thus, for the first time in years, N.Y.M. Co. will post an operating loss for 1976.

Felker's personal grandeur may match his managerial overreach. Since last spring he has asked for: 1) a 25% increase in his 1975 salary of $120,461. 2) the wherewithal to buy a house in Long Island's ducal Hamptons, and 3) company purchase of his super-duplex. His directors, in New York parlance, cut him off at the bottom line.

Whoever succeeds in controlling N.Y.M. Co., Felker will not be out of pocket. His 10% share of the firm will net him more than $1.3 million, if he wants to sell. That should be enough to establish him in the Hamptons--or, more likely, as editor-publisher of yet another magazine. Next time around, it might even be called Felker's.

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