How Bloomberg Became Media's Money Sinkhole

As his terminals mint billions, Mayor Mike, succession an issue, must decide how long to indulge a vanity TV and digital arm.

- Michael Wolff

MICHAEL BLOOMBERG, ACCORDING TO associates, quite believed he should have run for president and really might have won, and has been pretty miserable since reluctantly acceding to advice that he could not win and should not run.

While there are reasons to think the 74-year-old billionaire (40 times over) and former New York City mayor could have made a good president, among the good reasons for him personally to run was to get away from the business that bears his name. Bloomberg LP, a highly lucrative financial data and terminal company joined to a money-losing consumer media division, catapulted him to the mayor’s office in 2002, where for more than a decade he was removed from his old office’s politics.

But then he fell back to Earth. Before he was elected mayor, the consumer media arm of Bloomberg — more accurately, a personal branding arm with a small radio and television business — was losing, by some estimates, $50 million to $70 million a year on companywide revenue of about $3 billion (largely from the Bloomberg Terminal business). He returned to a company whose revenue had expanded threefold but whose losses in the consumer media business had leaped as much as tenfold.

Make no mistake, he could afford it. During an early meeting after Bloomberg returned to the company — following a reshuffle to deal with those losses in which Justin Smith had come from The Atlantic to run the media division, replacing former Time Inc. editor-in-chief Norm Pearlstine and NBC News chief Andy Lack (both have returned to their former employers) — Smith is said to have presented cost-cutting approaches. To which the impatient former mayor is reported to have replied, “Do I look like a man who has to save money?”