NORMAN'S CONQUEST

Behind The Wall Street Journal's pin-striped façade lie Norman Pearlstine's unconventional gifts

The Press

MICHAEL SHNAYERSON

In the office of the editor of The Wall Street Journal is a framed quote from Moses Malone, basketball great: "If you don't got the ball," it reads, "you can't shoot the ball."

Take it, if you will, as an indication that Norman Pearlstine, the tall fellow in the dark suit, isn't always as earnest as he looks right now. Nor, in eyeing his interviewer, as suspicious (arms tightly folded, weight shifting from foot to foot). It's just that he knows how reporters can come into a story with, well, an agenda. And how they can misinterpret quotes. "What I usually do is run my own tape recorder, too," he says almost apologetically, and proceeds to plug one into the wall.

The forty-six-year-old editor of the nation's largest daily is cautious in manner, impatient in action, and a terrific newsman by everyone's reckoning. From his office in the grand and massive new Cesar Pellidesigned Dow Jones headquarters in New York's Battery Park City, he commands both a view of the harbor and a staff of some five hundred reporters and editors in about thirty bureaus in the U.S. and abroad. As well as worrying about the stories in tomorrow's paper, he oversees the complex satellite system by which the Journal is beamed all over the world, and continues instituting editorial changes that are the most radical since the legendary Barney Kilgore made the Journal a national paper in the 1940s.

Pearlstine often still comes in to work at four o'clock in the morning, because, he says, that's when he wakes up. A man of clinically proven photographic memory, he reads fourteen newspapers a day and myriad magazines, constantly comparing, collating facts and trends, brooding over stories the Journal should have had first. He is also, to the delight of his staffers, capable of party-hearty fervor. At company gatherings he has been known to get down on the floor and gator. And though this is hard to reconcile with the sober vision in the dark suit, Norman Pearlstine has, on several occasions, demonstrated to astonished bureau chiefs his uncanny ability to peel bananas with his feet.

Since his ascension to the editorship in 1983, Pearlstine has worked hard to avoid a high profile outside the company—consider how little known he is compared with Max Frankel of The New York Times or Ben Bradlee of The Washington Post. But he's eager to drum up excitement for the Journal's next great leap, the new third section, rolling out this fall.

He's considerably less eager to talk about his new, third wife, the glamorous and somewhat controversial Nancy Friday, author of My Mother, My Self and other pop-psych best-sellers, whom he married over the summer.

'I have never received a letter from a Wall Street Journal reader asking for a bigger paper," Pearlstine acknowledges as we sit down to lunch in the private dining room adjacent to his office. "Indeed, our challenge is that most people feel they have too much to read." At the same time, readers want increasingly specific information geared to their needs—about semiconductors, say, or international business. And, Pearlstine feels, they need to have that information presented in quicker, clearer ways. "I've said to our designers there are fifteen changes I'd like to have in the paper, and the sixteenth is that the reader not think he or she is getting anything different."

Off the record, Journal editors and reporters worry that the new section may just exasperate busy Wall Streeters for whom the paper has always been a second read. Pearlstine, of course, hopes the changes will only make the Journal an easier read.

A more troubling issue is whether or not this is the time to expand. After a twenty-fiveyear period of extraordinary growth, the Journal has gritted through three consecutive years of gently declining ad linage, and its circulation hit a plateau of two million in 1983. Last year's crash hardly helped matters.

"You should keep in mind," Pearlstine says, "that the Journal has been and is continuing to be an immensely profitable paper. This is not the Detroit Free Press. The only thing we're suffering from are year-earlier comparisons." Still, there is suddenly a defensive tone in his voice. Pearlstine's watch has not been the walkover it was expected to be. It has not, in fact, been an easy time at all.

"He came in with trumpets and fanfare and marching bands in the fall of 1983," says Dean Rotbart, editor of the Journalist & Financial Reporting newsletter, and a former Journal reporter whose public broadsides against his alma mater are both piercing and partial. "He was considered a real wunderkind; everyone believed he was going to spend a quick three or four years whipping the already successful paper into an even higher frenzy of success, and then breeze his way to the seventeenth floor [as chairman of Dow Jones], And for the first several months, nothing went wrong. Then he sort of cruised into a brick wall."

Pearlstine began by hiring a hundred new reporters and editors—an unprecedented move. More than any editor since Warren Phillips—Dow Jones's current chairman—Pearlstine advanced the new vision of the Journal as a paper for businessmen, not just Wall Streeters, and expanded his news coverage accordingly. But then, in early 1984, came the Foster Winans scandal: a Journal reporter was caught trading on information to be published in the paper. Soon after, the Journal's growth leveled off. Pearlstine was forced to impose a hiring freeze and let jobs evaporate through attrition. "A lot of people still think he hired too many people too fast," says one reporter. "But he also lit a fire under a lot of people who had been very complacent." And, in the business-minded eighties, new competitors arose to wrestle for what had traditionally been the Journal's turf. The New York Times went national and Cranked up its business coverage; USA Today offered basic, if unsophisticated, financial information; Investor's Daily became a serious threat.

"The first time she asked me if I was jealous, I said I'd never thought about it."

Pearlstine could hardly be blamed for these misfortunes. He could be, and was, judged for how he reacted to them. The consensus: pretty damn well. On the Winans scandal, he demanded that his news staff cover the story with unmerciful thoroughness. "The episode was extremely painful to Norm," says Atlanta bureau chief John Huey, a longtime friend. "He hadn't hired Winans, but it's damn good Winans got discovered on his watch." The expanded coverage helped hold off competition. "We used to be the ones who broke the aluminumingot story," says Huey. "Now we're also the ones who break Iran-contra news, perhaps, or political news in Chicago. And we still break the aluminumingot story." As proof, the Journal picked up a raft of prizes last year, including two Pulitzers—one for covering insider trading and the market crash.

A hundred other reporters of his generation started at the Journal as Pearlstine did, right out of school. And though it was law school in Pearlstine's case—a choice influenced by his father, now a partner in a small Pennsylvania firm—still the challenge of standing out from the pack was a formidable one. Warren Phillips speaks gruffly of Pearlstine as a "brilliant individual" with a "first-rate sense" of news. "There's a difference between ability and exceptional journalistic talent," he says. Dean Rotbart believes that Pearlstine in a quiet way knew exactly how to market himself, identifying himself early on as managing-editor material and connecting with his editors in a sober, abovethe-crowd way. The turning point, suggests Rotbart, came in the late seventies, after tours of duty in Dallas, Detroit, Los Angeles, Tokyo, and finally Hong Kong. Pearlstine had the chance to show managerial mettle as editor of the paper's Far East edition, but he also came to feel marooned. That was when he took the considerable risk of jumping over to Forbes.

"Before that," says Rotbart, "leaving the Journal was considered buying a one-way ticket to Siberia." The paper's tradition was to hire college graduates, mold the young talent, and promote from within. Company loyalty was prized; reporters who left and tried to return were smoothly assured that with the excellent training the Journal had given them they were certain to find a job elsewhere. But times were changing. The growing emphasis on business news around the country was actually producing top reporters trained outside the Journal's walls; to be competitive, the Journal's editors would have to put their elitism aside. Rotbart, for one, has no doubt that Pearlstine made his move at just the right time, and with calculated intent. "If you had tried to design a way to skip past all those people in front of you, you might not have been able to do it better than to say, 'Hey, folks, if you don't recognize my abilities, someone else may.' "

Pearlstine was coaxed back to the paper as national-news editor by Peter Kann, the young associate publisher who had worked with him in Hong Kong and whose rise on the business side has paralleled Pearlstine's on the editorial side. "The day he returned," says Rotbart, "the smart money at the Journal bet he'd be the next M.E."

As national editor, Pearlstine quickly affirmed his reputation as a sharp newsman. "I wrote a two-paragraph story when I was just starting out," recalls a reporter. "And Pearlstine called from New York to scream at me for not putting in the stock price. Of course, he was right." In the daily noon and 4:30 story meetings, Pearlstine would sit back until his deputies finished, then pounce: adding angles to a story, ordering up rewrites. "He really understands what makes business news exciting," says one editor. "When he tells you what's wrong with a story, you almost always agree. And because he's excited, he gets others excited."

Last year, between stints as editor of Manhattan, inc. and the New York Post, Jane Amsterdam sensed that excitement when Pearlstine called her to propose she dream up a business-magazine venture. "It was a great working relationship," says Amsterdam. "As it started to develop, he'd give me comments that went right to the heart of it. And the questions were about quality and tone and wit, things that don't normally get talked about when you're starting a magazine." When Black Monday squashed the plan, Amsterdam says, Pearlstine was every bit as regretful as she.

Unlike many editors, Pearlstine has proved as good a manager as a newshound. He keeps a close eye on talent throughout the Journal's kingdom; not infrequently, when a bureau chief relays the word that a certain reporter will be tackling a story, Pearlstine suggests another. In the new era of hiring from the outside, Pearlstine has generally made inspired choices: from The New York Times, he snatched political reporter Dave Scribman; from The American Lawyer, he hired Stephen Adler to start up a law page, and Jim Stewart, who won one of last year's Pulitzers.

Among the troops, Pearlstine's obsessiveness is a cause of grumbling, if also a point of grudging respect. It's best, says a colleague, if he has a lot to focus on. "When times are good and he's bored, he can be a real pain in the ass, making silly requests and annoying criticisms. But when times are bad, he's the best to have on your side, because he'll stand up for you. In journalism, most people are the opposite.''

Now that Pearlstine's energies are focused on the new section, however, some staffers feel pressured by the changes. "There's definite anxiety about the pace with which Norm is introducing change," says a bureau chief. "We're being asked to develop expertise in areas we haven't before."

Pushing his untouched lunch plate aside, Pearlstine spreads out a prototype—the ninth—of the newly reorganized Journal. The front page looks reassuringly familiar. As the paper heads into its centennial year, the wry humor and writerly style of its frontpage features, boxed within the classic prim design, continue to lend the Journal its unique and incongruous charm.

The changes lie within. They give new coherence to previous innovations: the second section, an arts-and-leisure page, a politics page. Although the redesign will use only a few more pages than before, the second section's front-page concern with "softer" issues like personal business and human relations in the marketplace will no longer lead illogically into the stock-market listings. Instead, the "marketplace" interests will carry straight through. One staple: the Journal's "Media and Marketing" page, started up last January. ("Yes, before the Times," Pearlstine says with a grin. "We had a lot more fun when Abe Rosenthal was there because he never read the Journal.") Another: the business index to companies mentioned in that day's paper. Add to those a daily story on "Enterprise" (new ventures), one on new high-tech products, and the law page, one of Pearlstine's personal favorites.

The third section will be strictly market view: for all the readers, as Pearlstine says, who read the Journal from back to front. They'll see a third "front," which offers a global view of the economy. The stock-market tables will look as good and gray as they always have, but a new Dow Jones World Index, coordinated with Shearson Lehman, will, for example, track the effect of a new-product announcement by Genentech on AIDS-related stocks in foreign markets.

Pearlstine does have interests outside The Wall Street Journal, and he pursues them with equal intensity. Reporters have come to respect his streak of zany humor, and his cheerfully fanatic love of old blues, rock 'n' roll, and soul music. On a routine visit to the Houston bureau, Pearlstine learned that bureau chief Tom Petzinger was trying to compile the perfect ninety-minute tape of rock 'n' roll. "Pearlstine showed up in a cowboy hat and we drove to Gilley's in my '73 Nova with its torn-up upholstery," Petzinger recalls, "and Norman proceeded to berate me over some of my selections. He was outraged, for example, that there was no Motown. He argued it as if he were negotiating the articles of confederation."

One Sunday not long after that visit, Petzinger's phone rang: Pearlstine on the line. Half-convinced he was about to be fired, Petzinger listened agog as his boss announced that he had some extremely critical suggestions. "First of all, for lyrics I needed something from Steely Dan; I had to have something from The River, by Springsteen; and he urged me strongly to can the Led Zeppelin."

Pearlstine confesses to playing his favorites on the cassette deck in his office—though only in those early-morning hours before the staff straggles in. It's comforting, somehow, to know that the soulful strains of Sam Cooke come wafting over the corporate memos and articles about semiconductors and commodities. But, for all that, Pearlstine was until recently a confessed workaholic whose idea of the perfect life-style was an office sofa that opened into a bed. That attitude—and the frequent moves—put too heavy a strain on his first marriage, then on his second. By the time he reached the post considered a pinnacle by any journalistic standard, Pearlstine felt a deep sense of void in his personal life, and a keen desire to put down roots.

Which was exactly when Nancy Friday came into his life.

'This is why I'm so reluctant to be interviewed for your magazine," Pearlstine says, looking truly miserable at a second meeting, early on a weekday morning, the computer terminals sitting silent in the newsroom outside his office. He feels obliged to grant an interview—as an editor whose own reporters make the same request every day—but he dreads the visibility. As if symbolically, the tape recorder he plugs in again now fails to work. "One of the ways the relationship has flourished," he says glumly, "is that we've been quite private for a number of years." But with a celebrity-packed wedding at the Rainbow Room, that privacy, he admits, is a closed chapter.

It was in late 1981 that Pearlstine met Friday, at a party given by Alan and Hannah Pakula for screenwriter James Brooks's Starting Over. Brooks, a friend of Pearlstine's since the editor's first L.A. stint, helped arrange another meeting in Brussels while Pearlstine was starting the European edition. Weeks after Pearlstine returned to New York, the affair began in earnest.

Pearlstine had separated from his second wife some time before. Friday, highly stylish and statuesque at forty-four, struck him as a sort of ultimate reporter: intellectually curious, asking questions about the most vital parts of life. As her books revealed, she was also stunningly candid. At that point she was interviewing psychiatrists and any willing subjects she could find on the murky subject of jealousy. Often she would walk up to a stranger at a party and say blithely, "What if you found your wife in bed with another man? Would you wish her well? Would you wish her evil?"

Pearlstine's relationship with Friday became, in a sense, a sort of analysis. "A lot of what she cares about is the early, formative years—a lot of things I'd had sort of a passive interest in. The first time she asked me if I was jealous, I said I'd never thought about it. Envy, grandiosity, sibling rivalry: all these are subjects a work-directed person doesn't think about." For the first time, Pearlstine felt he was in an adult relationship, "which is not to say that the people I was involved with were not adults, only that I'm not sure I was."

Gradually, the relationship became more public. Pearlstine and Friday bought a large house in northwestern Connecticut, and began socializing with other New York weekenders. Some found the couple a bit incongruous. "Norman is very impressed with Nancy's fame and success and glamour," says one acquaintance. "He's been seduced by this amazonian blonde celebrity." Certainly, the frank explorations of sexual issues in Friday's books gave rise to speculation. At a prenuptial party at the Connecticut house of Shearson Lehman's Dick Holbrooke, a covey of guests, including Henry Kissinger, James Robinson III, and Jim Hoge, heard their host toast the happy couple as having two things in common: "Great sex, and talking about it." Pearlstine, who'd spent much of the afternoon impressing on friends how dignified an occasion he wanted the wedding to be, cringed visibly.

The elaborate preparations for the marriage began to assume a madcap air. The Rainbow Room was chosen because that was where, following the final settlement of her painful divorce in December, Pearlstine and Friday had celebrated their decision to get married. A Monday in July became the appointed day because the Rainbow Room is closed to the public on Mondays; because a Monday wouldn't wreck friends' summer weekends; because Peter Allen, Friday's close friend, was free to play only on a Monday. Friday duly sent out three hundred invitations; 308 acceptances came back, a mystery that never did get untangled.

Friday chose her literary agent, Lynn Nesbit, and writer Barbara Howar as bridesmaids. "We must be the first two bridesmaids whose ages add up to more than a century," declared Howar. In the summer heat, Howar and Nesbit trudged in and out of stores all over Manhattan, searching for just the right material for their dresses. When they finally found it, and presented it to the dressmaker, they got a shocked response. "Ladies," he said, "you can't use this material for bridesmaid dresses. It's too sophisticated. It's too old." Howar fixed him with a withering stare. "I don't think you understand," she said in stentorian tones. "We are the bridesmaids."

Before a crowd of guests, ranging from Erica Jong and Gay Talese to the Donald Trumps and the Ron Perelmans, Norman Pearlstine and Nancy Friday exchanged their vows at the top of the stairs behind the Rainbow Room's bandstand. As the ceremony concluded, Peter Duchin struck up the tune "Body and Soul." If you don't got the ball, you can't shoot the ball. In yet another way, it seemed, Pearlstine had the ball.

Now all he has to do is float his new third section through the hoop.