During the same year the group's recording and music publishing arm was sold for US$2.6 billion to a consortium led by Edgar Bronfman (former head of Universal), becoming Warner Music.
''Fools Rush In,'' by Nina Munk, a contributing editor at Vanity Fair, is the best so far. Marrying exemplary reporting with lively, lucid writing, she makes a convincing and devastating at the same time case that Levin wrecked the legacy of Henry Luce, the founder of Time Inc., in the service of his ego. Levin wanted to redeem his weak performance at the company's helm with what he liked to call a transforming transaction. He had already transformed Time once, in 1990, when he helped engineer its merger with Warner Communications. That was another lousy deal. What he transformed in the AOL merger was $200 billion of his shareholders' money into nothing.
Munk's entry to the growing list of books about the AOL Time Warner merger provides a thorough recap of the catastrophe, with the author coming to her own conclusion on the causes behind the merger's failure. After more than 100 pages of the obligatory background on AOL and its chairman, Steve Case, and Time Warner and chairman Jerry Levin, Munk begins to make her argument that Case and Levin, who ran their companies with few checks and balances, bear the greatest responsibility for orchestrating a deal that had little chance to succeed. She presses her case by hitting hard on the fact that few Time Warner executives knew about the pending deal until hours before it was announced, and that even fewer executives supported the proposal. That due diligence for the $165-billion merger only took three days and that many of the merged company's top managers sold large chunks of stock (including Case who sold shares worth $100 million) shortly after the deal closed is further proof to Munk that the combination was not well thought out and that many managers had doubts about its success from the very beginning. For readers looking for a quick review of events surrounding the AOL Time Warner merger, Munk's book fits the bill, but for those who are already well versed on the subject, Munk (a contributing editor at Vanity Fair) adds little new information.
Many readers will find Munk's book comparable in terms of entertainment value (especially humor) as well as quality of thinking and writing. Both were thoroughly researched. The completion of each was aided and enriched by dozens of rigorous interviews of key participants. However, there is one significant difference: senior-level executives at Enron (notably Jeffrey Skilling and Andrew Fastow) have been accused and some charged with serious illegalities whereas none of those involved with the merger of AOL and Time Warner have, at least until now. "This is a the story of how two men, Jerry Levin and Steve Case, caused what may be the biggest train wreck in the history of corporate America." Munk goes on to suggest that "In broad terms, the disastrous merger of Time Warner and AOL epitomizes the culture of corporate America and Wall Street in the late 1900s."
Part Three The Big Deal: AOL and Time Warner, 1999-2000. Step-by-step, Munk traces the process which eventually resulted in "the biggest train wreck in the history of corporate America." I was fascinated to learn about the nature and extent of Ted Turner's involvement amidst corporate intrigues which would have made the Medici envious.