Bloomberg Businessweek December 23, 2019
Whilethe1960sand’70sexpandedthe economicpieandgavemany
peoplea politicalvoice,the1980sseemedtomovein theoppositedirection.
Dozensoffightsforcorporatecontrolwerewagedbya newclassofbusiness
boogeyman or shareholder savior, depending on where you sat. These were
“TheRaiders”—junk-bondfinanciersandleveragedbuyoutkings—whomwe
personifiedwitha March 1985 covershowingapinstripe-suited executive
wearinga red bandanna.
The1988 fight over RJR Nabisco Inc. was era-defining. Henry Kravis’s buy-
outfirmKohlberg Kravis Roberts & Co. mounted a $25 billion hostile take-
overofthe tobacco and food giant, then led by a cocksure F. Ross Johnson,
who’dtriedtotakethecompanyprivateina sweetheartdeal.KKRfinanced
itscounterofferlargelybyborrowingagainstthecompany’sassets,puttinga
little-known financial tactic known as the leveraged buyout on the map. Kravis
landedon the Nov. 14, 1988, cover as “King Henry.”
Possibly the most iconic character of the 1980s was Michael Milken, the
wunderkind who led the junk-bond team at investment bank Drexel
Burnham Lambert Inc. “Milken has devoted his career to a radical
proposition: that the supposedly risky bonds of companies with low
credit ratings actually are terrific investments. So far, he’s been right,”
we wrote in 1985. (Many of his clients also became iconic figures,
such as oilman T. Boone Pickens, casino operator Steve Wynn, and
CNN founder Ted Turner.) Yet Milken’s decade-long run as the most
feared person in corporate boardrooms came to an end when he
pleaded guilty to securities fraud, served 22 months in prison, and
was barred for life from the securities business.
Elsewhere on Wall Street, Michael Bloomberg was “stirring up
trouble,” BusinessWeek wrote in its April 29, 1991, issue—the first
time the magazine covered its future owner, whose namesake finan-
cial information service already had “estimated” sales of $140 mil-
lionaswellassomeformidablecompetitors.“Incontrastwithhis
company’s modest size,” we wrote, “Bloomberg’s aspirations might
strike some as grandiose.” And how about this kicker: “Bloomberg
has already shown plenty of guts. Glory of the sort he craves may
take a little longer.”
Bloomberg’s data wasn’t the only thing changing Wall Street. With
the end of fixed brokerage commissions in 1975, retail investors,
driven by the replacement of traditional corporate pensions with
self-directed 401(k) retirement plans, had become a phenomenon
by the mid-’80s. The institutional investor “buy side” could finally go
toe-to-toe with Wall Street’s “sell side.”
Online discount brokerages appeared, and mutual funds boomed.
Charles Schwab Corp., through shrewd marketing and innovative
technology, “lays out a sumptuous banquet of low-cost and imag-
inative investment programs, such as no-fee mutual funds, com-
puterized stock trading, and specialized banking services,” said a
Dec. 19, 1994, cover story.
Consumer advocacy groups would also come into their own,75● 1975
The magazine devotes a cover story to the Corporate
Woman. The story receives a National Magazine
Award, or “Ellie,” for public service.
● 1979
“The Death of Equities”
actually looked pretty
smart ... for about three
years. Then an epic bull
market took off and
turned our cover into a
meme the internet has
yet to forget.● 1979
American Express makes
an unsolicited takeover
offer for McGraw-Hill,
which spurns it as “illegal,
improper, unsolicited,
and surprising.”
● 1972
InJune,McGraw-Hillmovestoa new
51-storytoweronSixthAvenuebetween
48thand49thstreets.
● 1975
Business Week begins a multiyear
streak of leading all U.S. magazines
in the number of pages of advertising
per year.
▼ 1970s