Live by the Ax, Die by the Ax

By Martha Duffy

Last week Richard Snyder, the CEO of the huge publishing house Simon & Schuster, and his young, third wife Laura Yorke invited a dozen Manhattan media swells to a dinner party. The guest of honor was to be Snyder's new boss, Sumner Redstone. Redstone's company, Viacom, acquired Simon & Schuster when it bought Paramount Communications, which owned the publisher. But the day before the party, Redstone left a message on Snyder's answering machine, backing out.

Later that day, Snyder was fired.

Until then Snyder, 61, had been one of the most powerful executives in publishing. Aggressive and abrasive, he had run Simon & Schuster since 1975 and increased the firm's revenues from $40 million to $2 billion. He achieved this growth largely by buying educational publishers like Prentice Hall. But those outfits didn't bring Simon & Schuster fame. It was its trade division -- the division that publishes the nonfiction books and novels available in bookstores -- that made waves.

Under Snyder, Simon & Schuster became almost as avid as a Hollywood studio in its pursuit of hot properties and star writers. Among the authors it rewarded with big advances were Jackie Collins, Mary Higgins Clark, Kitty Kelley, Bob Woodward, Rush Limbaugh and Ronald Reagan, who was reportedly paid $7 million for his memoirs. For class, Simon & Schuster plucked Philip Roth away from his prestige publisher, Farrar, Straus & Giroux. Although only about 10% of Simon & Schuster's revenues come from trade publishing, that is where the glitz lies. Says top literary agent Morton Janklow: "Trade publishing is like couture in fashion. Saint Laurent loses money on couture, but that's what allows him to make millions from his perfumes." With Snyder in charge, Simon & Schuster became the flashiest couture house of them all.

Snyder's high-volume, high-profile style produced profits that were just about average for the industry, but his personality created serious turnover problems. An arrow of a man, with a loud, deep voice and a blunt manner, he underscored every bottom line with outbursts of temper. When Martin Davis took over Paramount (then Gulf & Western) 10 years ago, the two dictatorial bosses began a festering, not quite open feud. Snyder is a buccaneer, better suited to being an entrepreneur than an employee. Says Joan Didion: "This is the game he wanted to play; he played it for 30 years, and he lost this round."

Others saw him more harshly. Last week, asked why Redstone would have wanted to get rid of Snyder, a source close to Davis compared him to Captain Queeg, saying, "It was a matter of how long before your patience runs out. He got more and more imperialistic." Frank Biondi, the president and CEO of Viacom and the man who fired Snyder, says simply, "Dick Snyder's operating philosophy and Viacom's operating philosophy were just at odds with each other."

Snyder's departure -- he was immediately replaced by his soft-spoken former No. 2, president Jonathan Newcomb, a finance and marketing specialist -- raised the question of what the new owner intends to do with Simon & Schuster. Viacom's victorious pursuit of Paramount brought $8 billion in debt. To lessen that burden, Viacom might sell the publishing house, but Wall Street observers dispute the wisdom of such a move. Says one: "A company with an $8 billion debt can't afford to dispose of a big chunk of cash flow like that." In addition, Viacom bought Paramount for its software -- its films, television programs and books. The writing community, however, is worried. Whatever his flaws, Snyder was fiercely committed to his writers. Now editors are receiving nervous calls from most writers with Simon & Schuster contracts.

Manhattan rumor mills ground out stories suggesting that another factor undercutting Snyder with Redstone was the publisher's free-spending ways. Snyder's contract called for an annual salary of $1 million, with a possible bonus of another $1 million each year. (He will leave with $10 million.) Snyder likes living well -- he has a vast Manhattan apartment and a baronial spread in Pound Ridge, New York -- and at Simon & Schuster he kept a chauffeur on staff.

( Those close to the fray discount such expenses as a serious factor. Snyder jokes that he was so conscious of Viacom's stinginess that he walked to his firing rather than use his car. For his part, Redstone, who used to take the subway, now rides in a limo. His driver: Martin Davis' former chauffeur.

But Snyder no longer has to worry about being thrifty. His chic little dinner went on last week despite the absence of its centerpiece. Snyder told his guests that when Redstone withdrew from the party, he changed the menu. Out went the frugal food. In came the caviar and champagne.

With reporting by Sam Allis/Boston, Elizabeth L. Bland and Thomas McCarroll/New York