Next year, Jann Wenner probably will launch his third magazine. Joining Rolling Stone and Outside will be Inside, a magazine for young urbanites.
Like so many other business decisions made at Rolling Stone's parent corporation, Straight Arrow Publishers Inc., the decision to attempt an urban life magazine was made by owner Wenner out of purely personal instinct.
"His wife Jane never leaves their apartment," said one of Wenner's employes. "It used to be an office joke after we started Outside that he would start a magazine for Jane called Inside. As usual, Wenner will probably get the last laugh when the thing makes a fortune."
A new magazine is just another step on the staiway to corporate maturity for Rolling Stone. Now comfortably into its second decade, Rolling Stone is showing its first signs of coming of age, of passing from the era of being an entrepreneurial enterprise under the tight control of one man into the age of systems, controlled by no one individual, and dominated by printed forms for everything from vacation requests to staff terminations.
Most symbolic of this change is Wenner's hiring of his first general manager, a young Harvard MBA with an impressive background in publishing. Frank Johnson was hired because Wenner needed someone who could engineer his rise to respectability.
They make an unlikely duo, Wenner and Johnson, but they understand each other. They are the same age, 32, but couldn't be more different. A shoot-from-the-hip gambler with an uncanny knack to recognize what will become popular, Wenner came up the hard way - taking chances and hoping. Johnson is methodical and traditional. A Phi Beta Kappa English graduate from Rutgers, Johnson served as a company commander in Bietnam on his way to the Harvard Business School. There he did a master's thesis on the Hearst newspapers that attracted the attention and respect of William Randolph Hearst III, a young heir to the Hearst fortune who later became the managing editor of Outside, and eventually introduced Johnson to Wenner.
But first, Johnson put in a few years at Dell Publishing, where he earned a reputation as a hard working and effective manager. He was as surprised as anyone when he was approached for the Rolling Stone job, which he begain in January.
"It's a tremendous challenge," he said in an interview in his 28th-floor office overlooking Central Park. "This year this will be a $20 million company, and it will be a $100 million company ten years from now. It is a major publishing house, and it is going though a major evolutionary change. It can't have the ups and downs it has always had."
When Rolling Stone moved the bulk of its operations to New York City from San Francisco last year, that change began in earnest. With Johnson's arrival, phase two begins - the development of systems that will allow the company to run itself. In the case of Rolling Stone, that will be no easy task, because so much of the success of the magazine was due to the energy of its staff and its creator, Wenner. It remains to be seen whether spontaneity can be programed.
Born in the age of the flower child in San Francisco in 1967, Rolling Stone started when Wenner fueled his dream with $7,500 of borrowed capital and a lot of help from his friends. Now there are 135 employes on both coasts, and a paid circulation of about 520,000 for Rolling Stone and something less than half that for Outside, a glossy out-doorsy magazine started last spring.
To be sure, Rolling Stone IS Jann Wenner. The magazine writes about what interest Wenner, and is influenced totally by his perspective. "We moved to New York because my wife wanted to mve to New York," said Wenner, quickly adding, "and it made a lot of sense in terms of consolidation of the company. I could not effectively run the company commuting back and forth (for years the advertising offices have been in New York) and the necessity of being on the West Coast for editorial reasons had really diminished substantially. All we were doing in San Francisco was covering rock and roll out of Los Angeles."
What has not yet diminished is Wenner's roll as the boss. From authorizing a change in cover photos mid-printing at a cost of $100,000 to a reported $30,000 payment to Carl Bernstein for one story about the press and the CIA (Wenner denied the payment was that high, but admitted it was too much - "Everybody is entitled to one mistake.") to cutting down on the number of WATS telephone lines out of the San Francisco office, Wenner's personal involvement spans the entire spectrum of the corporation. (Along with his wife, he owns "over 50 percent of the company.")
"It's one of the hallmarks of people who make it to the top," said Johnson of his boss. "They dream big and they pay fine attention to detail. Jann has both traits. Discussions go to small details and then he looks beyond it, and has the ability to conceptualize on a large scale."
Still, many former and present employes agree that Wenner is not a sophisticated businessman, and they also say that he is as difficult to deal with as many of the prima donna writers he has hired. Frequently he has been accused of being irrational in his dealings with his staff.
"I didn't lose my job, they lost theirs," Wenner said of former employers who have criticized him. "I don't regret losing anybody that I've lost, and I could have held on to some of them if I wanted to," he siad, revealing just a bit of the cockiness that so irks his critics.
His most publicized clashes, in everywhere from gossip columns to the comic strip Doonsbury, have been with star writer and RS national affairs editor Hunter Thompson. "Everutime Hunter resigns, you hear about it all over the place," said Wenner. "But you never hear the oppposite. He resigns every year, but he comes back.
"Hunter is the only person who really badmouths me and is still on the staff," said Wenner, while he paced the floor in his spacious office, also overlooking Central Park. He is never still for more than a few moments. "If you give Hunter enough (deleted), he'll say anything. I told him, though, that if he starts going around calling me a demented littly twirp . . . well . . . if he goes around telling anybody anymore that I cut off his life insurance in Saigon, then I would start going around telling the true story."
But Thompson personifies the magic of Rolling Stone - the brilliant yet unorthodox writers who were given their first major forum. At this writing, the entire next issue of Rolling Stone is awaiting Hunter Thompson, who is asleep in a motel room in Aspen, Colo. He is only half done on his yearly epic, this time a piece about the Ali-Spinks fight. It Thompson doesn't finish soon, for the second straight time the bi-weekly issue of Rolling Stone will have to go with a backup cover story and find some other way to fill eleven word-hungry pages.
Can a company do any real planning when it has to deal with someone like Hunter Thompson as a major part of its operation?
"I don't know," said Johnson. "You can't budget a force of nature."
There are others who have come and gone, many several times, en route to reputations as top writers: Timothy Crouse, Joe Esterhous, David Felton. Wenner has managed somehow to have these people alternately love and hate him. Wenner's magic is that, at one time or another, in one way or another, he has inspired them all to produce superhuman efforts for RS. Wenner's strategy befits his new image as a tough corporate executive.
"There is no single way you can treat all the writers in this place. It gets more out of Felton to sometimes throw him out and make him penniless, and have all the pressures come down on him at once, to make him produce," said Wenner, who on countless occasions has removed and restored Felton as a staff member.
Besides the difficulties of dealing with "talent," as writers are called in the business, Rolling Stone faces other formidable challenges as it steps lightly into the corporate world.
There are tough business decisions ahead. For the past four years, Wenner has been confident enough about his circulation to avoid any direct-mail circulation promotion. "We concentrated on nesstand sales," he said. But now that is changing, and nearly 20 percent of all Rolling Stone subscriptions come from what is known as agency business - heavily discounted subscriptions sold through promotion firms like Publishers Clearing House.
A January mailing for Outside was described as a "disaster" by publishing sources. Although many magazines had problems with January mailings this year, Outside was hit particularly hard.Outside already has cost Rolling Stone $2 million in start-up costs ($1 million more than originally planned), and is just now, in its seventh issue, looking like it will break even on aperissue basis.
Outside Managing Editor Will Hearst left his family business to join Wenner two years ago. "Jann gave me an opportunity to try out ideas at a younger age; he took a gamble with me, so I'm loyal to him," said Hearst about his relationship with his controversial boss.
Wenner said that about five years ago he began to realize that he had better start building the business side of his operation tha same way he had built the editorial side if he ever hoped to grow.
"I knew finding people there was going to be harder because it was an area I knew less aboutand had less contact with," he said.
Enter Johnson, who already has had some impact on operations. He runs weekly staff meetings, alerting department heads to the problems in other areas, and he has instituted strict space budgeting procedures for each issue of Rolling Stone, giving tha magazine a consistant ad-to-news space ratio for the first time. And plans for future book publishing efforts are under study. Earlier book ventures failed under misguided management.
It is a year of concolidation, of unpacking cartons in a new city and of planning, of finding a way to harness and budge the enormous creative energy of Wenner and the Rolling Stone staff into a profitably consistent money-maker.