Fleet Street and Murdoch veteran Ken Chandler leads a conservative media empire's charge into New York
12:52 pm Sep. 26, 2011
Back in June of 2010, Ken Chandler was flipping through The New York Post when an item in the business pages caught his eye.
A month earlier, the Washington Post Company had announced it was putting Newsweek up for sale because it could no longer stanch the flow of money—tens of millions of dollars each year—it was draining from the company, and now an unlikely bidder had crawled out of the woodwork: Newsmax Media, which publishes the conservative monthly magazine Newsmax and five niche health and finance newsletters, as well as managing a broad portfolio of external e-mail blasts that cover topics ranging from personal computer security (“Maximum Software”) to self-improvement (“Chicken Soup for the Soul”) to Newt Gingrich’s mission to “preserve America’s Judeo-Christian heritage by defending and promoting the three pillars of American civilization: freedom, faith and free markets” (“Renewing American Leadership”).
Chandler was vaguely familiar with Newsmax. Years earlier, its founder and chief executive, Chris Ruddy, had worked for him. It was 1993, and Chandler, a former Fleet Street gumshoe who came to the U.S. in his late 20s and ascended News Corp’s ranks to become one of Rupert Murdoch’s trusted lieutenants, had just been installed as editor in chief of the Post following Murdoch’s re-acquisition of the ancient tabloid.
Ruddy was then a little-known investigative journalist who would soon rise to prominence for his probing of the case of Vince Foster, the inaugural deputy White House counsel under Bill Clinton whose death that July, Ruddy claimed, was the product of a nefarious government whitewash that reached all the way up to the first family. (Ruddy’s reporting was widely discredited, and multiple investigations have concluded that Foster had committed suicide; as it happens, Ruddy and Clinton are now good friends.)
Seventeen years later, here was Ruddy reigning over a burgeoning Florida-based media empire. Its right-leaning flagship brand made it a curious potential savior for a magazine like Newsweek, the Washington bona fides of which did not exactly make it the magazine of record for right-wingers disenchanted with the capital.
The organization was on target to bring in $52 million in revenue in 2010, up from $34 million in 2009. Newsweek, on the other hand, had hemorrhaged more than $45 million over the preceding two years.
"I think if people can realize that if somehow I could become friendly with Bill Clinton after all my reporting and criticism of him, then I'm open and broad enough to have a liberal publication that's part of Newsmax," Ruddy told me at the time, adding that he could make Newsweek "cash flow positive and profitable" in 18 months.
But Newsmax Media’s Red State mien was reportedly a little too much for Post Company chairman Donald Graham (Sarah Palin once famously cited Newsmax as one of her top three news sources), and Ruddy was politely shown the door. (Newsweek ended up selling for $1 to 92-year-old philanthropist Sidney Harman that August. He died nine months later after merging the magazine with Barry Diller and Tina Brown’s Daily Beast.)
That was when Chandler saw the Post’s report that Newsmax was out of the running. He called Ruddy out of the blue.
“We kind of reconnected,” Chandler recalled the other week. “We had a good conversation.”
Last Sept. 16, Chandler flew down to West Palm Beach, Fla. (where Newsmax is headquartered) to catch up with Ruddy (who then also held the top editorial slot at the magazine) in person. They spent most of the day in the Newsmax offices and then went to dinner at the West Palm Beach Grill around 7. Over medium-rare filet mignon and red wine, they talked extensively about Newsmax, Chandler’s impressions of the operation and what role he might play in it.
“I was very impressed with Chris and the caliber of the people he had working for him,” said Chandler. “I felt comfortable with the product. The New York Post was a conservative newspaper, so I felt perfectly simpatico with the content they were producing. But one of the things that impressed me most was that Chris had built the company on his own.”
Chandler flew back to New York the next day feeling pretty good about his prospects. Several weeks later, he and Ruddy sealed the deal by phone: Chandler would be Newsmax’s editor-in-chief.
“We talked a lot,” he said, “and that was that.”
ONE YEAR TO THE DAY AFTER HIS EFFICACIOUS MEETING WITH Ruddy, Chandler was in Newsmax Media’s just-opened New York offices on West 40th Street. There were a few editorial and marketing people typing away at their computers in two rows of mostly-empty cubicles that cut through the center of the room, which was bathed in the late afternoon sunlight. But most of the action that Friday was unfolding on the six flat-screen TVs affixed to the east-facing wall, one each broadcasting CNN, MSNBC, CNBC, Fox Business Network, Fox News and NY1. The 24-hour local news network would soon be replaced with a live feed of the Newsmax homepage once the requisite technology was up and running. Likewise, an adjacent room with large glass windows would be transformed into a TV studio within the month, “for if Rudy Giuliani’s coming in, or Mayor Bloomberg, or one of the presidential candidates,” said Chandler, giving me a tour. “It will be a good destination for them in New York.”
Chandler, slim yet broad-shouldered, with neatly cropped silver hair and a studious face, showed me to another empty enclosure on the opposite side of the office. What it lacked in character was mitigated by the fantastic view of Bryant Park. The space was to be converted into a conference room, but as of yet, its only contents were some wires snaking down from the ceiling and two lonely office chairs. The 64-year-old editor sunk his 6-foot-plus frame into one of them and spun it around on its side, lounging cross-legged.
“The goal is to make this office and this studio a must-stop destination for key opinion makers,” said Chandler, who was wearing thick black Ray Ban eyeglasses, black loafers and a plain Ralph Lauren button-down that matched his blue jeans, “much as Newsmax is down in West Palm Beach.”
From its hometown perch, Newsmax Media has scaled exponentially since Ruddy founded it in 1998. It became profitable in 2003, according to Ruddy, and was bringing in roughly $25 million in revenue by 2008, a figure that its owner projects will have ballooned to around $70 million by the end of this year. (Print magazine revenues represent just 10 percent of that total, the bulk of which is derived from digital advertising and paid subs.) The company largely owes its success to its newsletters, email lists and the more than 3 million readers they reach on a daily basis. But the magazine itself has cultivated a significant audience, too.
At a time when glossies across the spectrum were dropping eyeballs, the circulation for Newsmax surged, shooting up 93 percent during the first half of 2010 and 111 percent during the second half, according to the Audit Bureau of Circulation. Paid subscriptions (the magazine, which regularly costs $40 for 12 issues, is no longer on newsstands) have reached about 250,000, although company research indicates that each issue is seen by three or four people, putting its total monthly print readership closer to a million, said Chandler. There are 7.7 million people, according to Nielsen (5.5 million according to Quantcast), who visit Newsmax.com each month.
Given its breadth, it's no surprise Newsmax has become a force in conservative media. But The Weekly Standard or National Review it is not. Newsmax presents heros: Michele Bachmann is the "Heartland Warrior" on one cover; Sean Hannity is a "Great American" on another. This is not the magazine for "coastal conservatives" with golf-club subscriptions, or the academic conservatives and Straussians driving the intellectual agenda of the right out of university campuses and Washington think-tanks.
“I’m sure a lot of our readers are supporters of the Tea Party,” said Chandler. “Our audience is in the heartland of the country. They’re looking for a publication that mirrors their views, and they find it hard to find this in the rest of the media.”
Recent covers are like a Who’s Who of the Tea Party movement. Here’s Bachmann again on the front of the July 2011 edition, looking only slightly less crazy-eyed than when she graced the cover of Newsmax’s could-have-been sibling the following month. And here’s Paul Ryan proudly clutching his “Path to Prosperity” on the cover in August. And a blithe Rick Perry photographed in the shadow of the Capitol Building in October.
Yet for all its influence and success, and all of the unlikely success of the Tea Party wing of the G.O.P., there’s still a certain fringiness that has prevented Newsmax from moving out of the margins and into the mainstream. That the company is based in West Palm Beach hasn’t exactly helped matters. As a person familiar with the magazine’s expansion strategy put it: “They know as long as they’re operating out of the swamps of south Florida, they’re not gonna be able to stretch.”
Newsmax Media previously kept a small office on 42nd Street, but it was “a very modest space,” said Chandler, who flies down to West Palm Beach once a month to close the magazine. The new digs will accommodate 30 staffers (there are around 150 in Florida, including some 40 in the newsroom) both from Newsmax and MoneyNews.com, the company’s lesser known financial website, which is also in expansion mode under Chandler’s supervision.
“MoneyNews is something we see as having a lot of growth opportunity,” he said, “and now that we’re in New York, we’re gonna be a lot more visible.”
Both sites will start running significantly more online video content once the new TV studio is fired up. Down the road, said Chandler, his writers will be able to go into the studio to do cross-talk interviews on CNN and FoxNews, an important aspect of Newsmax's marketing strategy, and shoot more broadband video for the web.
“There’s nothing to say we couldn’t develop our own video service on the Internet,” Chandler said confidently.
Glenn Beck’s doing it. His company, Mercury Radio Arts, which produces the ex-Fox News anchor's nascent web TV offering and his year-old news and opinion website, The Blaze, is headquartered in midtown, though Beck himself is shipping off to Texas now that his cable news career has come to an end. It’s another example of an upstart conservative media brand anchoring itself in Manhattan while its audience is largely entrenched in Middle America.
“It makes the most sense to have a physical space in New York,” said Betsy Morgan, the former Huffington Post chief executive who went to work for Beck earlier this year as president of The Blaze. “New York is a news culture, and I think that’s important. It gets media really well, and it gets the news space really well.”
There are of course prosaic reasons why Newsmax would want a New York beachhead.
"Newsmax is growing at a really rapid rate and the demands for several segments of our business are growing, including areas such as editorial, marketing, database management, publishing, ad sales," Ruddy wrote in an email to Capital. "New York remains the leader in many of these areas."
But Chandler rattled off some of New York's more image-related benefits to a "heartland" magazine, back at Newsmax’s Bryant Park outpost.
“It’s so much easier to book guests to come in here,” he said. “Especially if it’s an author doing a book tour. They’re probably going to be going up the road to do Fox News or to Rock Center for MSNBC, so now we’re in the same neighborhood. And there’s just a lot of really interesting people up here who I think will make for great interviews that it would have been harder for us to access without this space. Someone like Steve Forbes, people like Giuliani; you name it. Politicians, financial people, and also those writing about them. The analysts, the opinion-makers—they’re all here.”
There’s also the byline factor.
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