How to Make Money Off Free Magazines: Vodka, Girls, Vegas, Maybachs. Plus, Lenny Dykstra!

Edward Kosner, former Newsweek and New York editor, reviewed former Forbes Washington bureau chief Randall Lane’s new book, The Zeroes, for The Wall Street Journal today (Mr. Lane also pitched the book himself on the Daily Beast today).

First, the hard news out of Mr. Lane’s book:

The juiced ex-Mets baseball player-turned-stock-picker Lenny Dykstra supposedly traded access to Jim Cramer, CNBC’s screaming “Mad Money” man, for $250,000 in penny stock; the psychedelic-art hack Peter Max is a wily operator; and Wall Street sharks made even more money and behaved even worse than you imagined as the markets careened toward disaster in the first decade—the Zeroes—of the new century.

But Mr. Lane also writes about the magazine publishing group, Doubledown Media, that he started to target the new class of working rich spawned by the bubble.

Doubledown published titles like Trader Monthly, Dealmaker, Private Air, Corporate Leader and Cigar Report—totaling some 500,000 free copies in circulation. How does a company like that make money? Free vodka and girls.

At one point, the company was valued at $25 million, and later at $17 million. (For reference, Perez Hliton’s blog was valued by one potential buyer at $20 million in May, but that was before it’s brush with child pornography. It’s worth less now?)

Mr. Kosner writes:

Such healthy valuations were strange because as “The Zeroes” goes along it becomes obvious that, while Mr. Lane’s company is churning out a half-million free copies a month, it is really in the business of staging parties. Advertisers and potential advertisers pay Doubledown for the privilege of pouring the latest designer vodka down the gullets of Wall Street’s new aristocracy, peddling $10,000 watches on the wrists of arm-candy models and enticing rich marks into $300,000 Maybach luxury sedans and time-share condos in Las Vegas.

The parties continued right up until the end. Less than 24 hours after Lehman Brothers failed, Dealmaker threw a party for over 1,000 bankers. In the end, Doubledown went bankrupt and a newsletter publisher picks up some of their property for $50,000.

One final note about Lenny Dykstra, from Mr. Kosner’s review: “He likes to stay up for four or five days at a stretch before crashing. He freely admits to Mr. Lane that he used steroids while playing ball. Despite everything, Mr. Lane goes into business with him; it all ends in tears and surreal litigation.”

Nails on rails!

How to Make Money Off Free Magazines: Vodka, Girls, Vegas, Maybachs. Plus, Lenny Dykstra!