Yesterday was the day when everything happened at U.S. News & World Report. Nine uncertain months after the magazine was sold to Boston real estate magnate Mortimer B. Zuckerman, employes at the magazine began to receive much, but not all, of the approximately $140 million remaining from the $176 million sale of the publication.
And the staff also learned of a fresh management lineup.
Editor Shelby Coffey III announced "a new editorial structure" at a meeting yesterday. Former Reagan White House communications director David Gergen, who writes a column for the magazine, was named managing editor in charge of news; former Inside Sports editor John A. Walsh managing editor for "newsfeatures"; and former Fortune magazine Washington editor Peter Bernstein managing editor for business.
All of this comes after 18 months of management changes, fluctuating expectations, resignations, rumors and unresolved lawsuits. The magazine's four top editors before the shake-up have either left or plan to leave; and according to colleagues, a handful of editorial employes were encouraged to retire early or resign.
"I think anyone would agree there's always uncertainty when any organization undergoes change at the top," executive editor Kathryn Bushkin said yesterday.
Unwinding at the same time was the saga of the U.S. News Millionaires.
During negotiations for the sale of the employe-owned company, observers anticipated a financial windfall; employes spoke to friends of new homes, luxury cars and retirement plans. In fact, the 500 participants in the profit-sharing plan will receive an average of $200,000 -- with some getting much more. But according to some employes, the pot of gold has acquired a bit of tarnish during the last nine months.
Two groups of former employes have sued, claiming they were cheated of millions of dollars when they sold their stock back to the company upon retirement. About a third of the fund has been withheld pending the trial, which is scheduled to begin this fall.
"U.S. News, being employe-owned, sort of operated like an old plantation or an extended family," said senior editor John Lang, who yesterday was designated as Walsh's deputy. "There was a sense of belonging, of extended family. That's just evaporated."
Staff members talk about people who committed their expected wealth long before it materialized. Others express anger toward the former colleagues who are suing.
"It's been pretty lousy seeing people hold you up with a gun," said assistant managing editor Fred Frailey.
"Mentors, if you will, of a lot of people still here" are among those suing, said Lang. "You hear grumbling. I frankly have tried not to pay attention to it. I didn't want to get soured here.
"For a time, I thought I was going to be a millionaire, then I heard it was only 70 percent, then 67," Lang added. "I just quit worrying about it. There were fantasies. You go home at the end of Friday and picture buying a round-the-world plane ticket, Porsches and all that, but we don't really believe it. It has gone on now more than a year, and it's just kind of a numb feeling, at least for me."
Said executive vice president James K. Glassman, "A lot of people became very fatalistic. I think that was the best way to handle it. It was an emotionally debilitating experience for many of the people here, and that's why we're so happy at last they have access to their hard-earned money."
Coffey said, "I'm just glad to see the considerable part of that clearing up."
"This thing just dragged and dragged and dragged," said one longtime U.S. News editor. "Tempers have worn very, very thin. People are screaming 'My God, where is my money?' Ex-wives in some cases are threatening to come back and sue again for a hunk of the action, when a nickel of the action hasn't even come in yet . . . "
Two strains of speculation -- about money owed and changes promised -- seemed to feed each other at the magazine's West End building.
"You hear rumors," said a production department employe. "You see a lot of new cars in the parking lot -- whether they would have bought them anyway, I don't know. The rumors have been incredible. 'Everyone's going to get pink slips.' 'They're cutting back 30 percent.' I think the rumors have been worse than anything else. I think a lot of the people feel the company's changing for the good. I think the fear of the unknown was the worst."
Magazine executives said yesterday that rumors of major personnel changes are false.
"There are no plans for any pink slips," said Gergen. "The only pink slips I've seen are the blizzard of telephone messages today. There are a few employes who have left the magazine already for a variety of reasons. A few, they had not received good notices from the previous management. There was some consultation with them and they left the magazine. There are no pink slips coming with the green bucks."