By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
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To be sure, Lalli is a respected veteran, a former president of the American Society of Magazine Editors and managing editor of Money magazine. But sources say the recent turn of events leaves him looking out of touch, if not "delusional" about his role at Hachette. Case in point: Lalli gave colleagues the impression that he expected to stay at George a year or two before being promoted to a grander job, perhaps that of editorial directorbut the closing of George caught him off guard and placed a big question mark over his future.
The first week of January, sources say, Lalli was busy allocating his 2001 editorial budget. He had just hired a new managing editor and consulting editor, and was in the process of hiring a Washington correspondent. On the afternoon of January 4, editors sat down to work on the next cover story. Then Lalli got a call from Inside, shortly after which Kliger spoke to Lalli face-to-face. At 3:25, Inside broke the news that George was closing, and within an hour Kliger came down to tell the George staff. "It was clear that Kliger had not intended to make this announcement," says one eyewitness. "He seemed flustered and not as prepared as he would have liked to be."
There's no debate as to why the magazine died: It's the recession, stupid. Although subscriptions were up, newsstand sales and ad pages were down, and despite a "superb" editorial product, Kliger said, "The reality of today's magazine business is that we cannot make George work economically." Observers note that political mags rarely turn a profit, and that this one lacked irony and gossip, let alone any point of view whatsoever. Even the editors didn't know what George was about or who was supposed to be reading it. And while subscribers flocked to the live John Kennedy, after the issue commemorating his death, there were no celebrity relics left to sell. Hachette tried raising the cover price, discounting subscriptions, throwing glitzy parties, and cultivating the Times' media reporter. Eventually, one insider says, the company realized "they couldn't make money off a dead person. John wasn't Elvis or Marilyn Monroe."
Lalli is taking the news in stride. Last week, he told me he may or may not leave the company; his only immediate plans are to go to Florida for a few weeks and give an ASME speech later this month. He understands that Hachette "had to make a very tough decision" and says he feels no "anger or resentment," although he thought he'd get "another year or two." Lalli says his staff had lots of ideas and was bringing in some top writers. Fantasizing, he said, "We might have gotten a hot story, and then some major advertiser commits to us, and all of a sudden, we're Vanity Fair!"
Au contraire, mon frère. One source speculates that the Inside story was a "targeted leak" by Hachette, intentionally designed "to make Frank look like he was out of the loop." Staffers believe the decision was made as early as December 20, when they shipped the February issue to the printer. Shortly thereafter, someone told the printer to stop the presses, and an outside PR firm, Abernathy MacGregor Group, was enlisted to coordinate the close. But no one bothered to tell Lalli. (A Hachette spokesperson says they wanted to spare him the "burden" of keeping a secret.)
Having to read your obituary on a Web site may strike some as harsh. But don't blame Jack Kliger, says Elaina Richardson, former editor of Elle magazine. Richardson says her old boss "is one of the best managers, very thoughtful and direct, and he always signals what's going to happen." While she praises Lalli for putting together a "strong editorial team," she says the editor in chief may have been "in denial about the health of the magazine. . . . Usually, when a relationship breaks up, there are lots of signals beforehand, but the person who gets dumped feels like there weren't."
Before coming to George, Lalli had received mixed reviews. As managing editor of Money, he had a reputation as a consumer crusader who "knows a good story when he sees it," though some say he "tarted up" his covers and that the magazine needed more credibility to inspire subscription renewals. Then again, says one Time Inc. source, "There was a level of self-aggrandizement that didn't play well with his colleagues." Once, when a visitor came to see him, says another source, Lalli pointed to a sign that read "Managing Editor" and said, "Everybody who has that on his door in this building is a millionaire." In 1997, shortly after Norman Pearlstine became EIC of Time Inc., he removed Lalli from Money, and in 1998, Lalli quit the company altogether.
In 1999, Kliger and Lalli began the courtship that would lead to their current estrangement. Kliger had been named president and CEO of Hachette that spring, and he had already told Kennedy to look for new backers. That summer, Lalli, reincarnated as a consultant, talked to Kliger about start-ups and some other roles he might play at Hachette. But after Kennedy's sudden death in July, Kliger saw a marketing opportunity and decided to keep the magazine alive. Several months laterafter interviewing candidates from Jonathan Alter to Harry EvansKliger settled on Lalli as his EIC.
Inside the company, the new hire fueled speculation that Lalli was being groomed to replace Hachette editorial director Jean-Louis Ginibre, who is nearing retirement. But Lalli was apparently "not as secure as he thought," says a Hachette insider. Some scorned Kliger's hiring of Lalli as a "sympathy move," a sentimental gesture to rescue an "over-the-hill" friend who had been kicked out of Time Inc. While Kliger had bought out the Kennedy family's share of George and promised to finance the mag for two years, some insiders "sensed he was calling everyone's bluff" and would only keep it going for one. One source claims that Kliger saw George as a "free PR campaign" that could get his name in the paper.
Furthermore, says one insider, "corporate never signaled" its intention to give Lalli the job of editorial director. Sources point out that Ginibre, who was hospitalized at the time Lalli was hired, is more likely to choose as his successor someone focused on building the brand internationally, such as his deputy, François Vincens. Says Lalli, "I was never misled by anything Jack said to me."
Next week: Throughout 2000, "The warning signs were all there," according to one staffer. "There were not many days when the prospect of George's closing was not imminent."