Barbarians at the Gate by Bryan Burrough & John Helyar

It is not uncommon to see great works of fiction reprinted in anniversary editions celebrating either the date of publication or the centennial birthday of the author. See, for instance, the "50th Anniversary Editions" of On the Road and Lord of the Flies, or the "Steinbeck Centennial Collection." It is something else entirely, though, to see a hardcover anniversary reprint of a nonfiction title issued decades after the book's original publication. And with good reason: most nonfiction does not age well. Usually either the subject matter is no longer topical, or the underlying research has been surpassed by more recent scholarship.

Thus it is worth noticing when a nonfiction book does get the anniversary treatment. A title like The Joy of Cooking, which recently celebrated its 75th anniversary, is somewhat exempt from the obsolescence of most nonfiction titles, not that this diminishes the enduring popularity of that book. However, it is hard to think of a genre more prone to near-immediate outmoding than business current events. Just think, Charles Morris book on last year's credit crisis actually had to be retitled from The Trillion Dollar Meltdown to The Two Trillion Dollar Meltdown when it came out in paperback, as it was so quickly overcome by events.

That is a long way of saying that Barbarians at the Gates has a decent case behind its cover's claim to being the "Best Business Story of Our Time," based solely on the fact that it was republished in hardcover last year to mark the 20th anniversary of the leveraged buyout of RJR Nabisco. As the authors state:

When we wrote Barbarians at the Gate in 1989, it was a book about current events; now it's history. Some books age better than others. We'd like to think Barbarians has aged well. The book is still used in major business schools to teach any number of topics, from ethics to investment banking. In 1993 it was made into a movie on HBO. In 2002, fourteen years after its heyday, the RJR fight was dramatized once again in a documentary film on the History Channel.

I think there are several reasons for the book's lasting success. First, and most unfortunately, the subject matter has remained frighteningly topical. Sure, the details of the RJR Nabisco battle are no longer in the news, but the book's tales of conference room machismo and high-dollar financial manipulations have been seen again and again in the years since (perhaps most spectacularly in the saga of Enron, on which I will say more in my upcoming review of The Smartest Guys in the Room).

Second, though the book was written just a year or so after the events it describes, there is little chance of better research coming along; the authors, both reporters at The Wall Street Journal at the time, snagged in-depth interviews with seemingly every key player in the saga, providing a vivid behind-the-scenes perspective. They were able to reconstruct pivotal conversations based on the accounts of multiple participants, just like a fly on the wall. Finally and fundamentally, this is just a uniquely fascinating story with larger-than-life characters, and the authors tell it fabulously. They successfully meshed their thorough research with a suspenseful narrative normally reserved for works of fiction:

It was the night before the company's regular October board meeting, normally an occasion for the directors to dine informally with their chief executive, Ross Johnson, and get an update on corporate affairs delivered in Johnson's unique freewheeling style. But tonight the atmosphere was markedly different. Johnson had called every director and urged him or her to attend the dinner, which wasn't usually mandatory. Only a few knew what loomed before them; the others could only guess.

This board meeting, in which Johnson would propose to lead a leveraged buyout of the company he headed, is depicted in the book's opening chapter, though it takes nearly two hundred pages for the narrative to catch up. Johnson is at the heart of the story; leveraged buyouts, after all, normally depended on the cooperation of management in assisting the investment group in cutting costs, spinning off unprofitable businesses, and thus generating the huge profits expected from an LBO. Johnson's story is extraordinary on its own, depicting the Canadian businessman's late bloom and then meteoric rise, twice merging the smaller company he led (first Standard Brands, then Nabisco) into a larger company and then rising to the head of the combined operation.

But once the LBO gets rolling, Johnson largely loses control of the situation, with the arrival on the scene of Henry Kravis. Kravis, the self-proclaimed master of LBOs, did not like the notion that the largest LBO in history would take place without him. The majority of the book depicts the fight between Kravis' group and the management group to win the board's approval of their offer. This battle features all the worst of what American business has to offer: uncontrolled ambition, greed, preposterously immense egos:

While Cohen and Kravis glared over their coffee cups, Johnson decided to take matters into his own hands. He simply had to know if the Kravis bid was real and, if so , what it means for his management group. Johnson was nothing if not a quick read: He could tell Cohen was less than enthusiastic about sharing the deal of his life with Kravis. Both times Cohen and Kravis had spoken they had gotten into spit fights. Maybe it made sense to try some kind of partnership with Kravis. The only way to find out for sure, he reasoned, was to meet with Kravis himself.

But the time for handling such matters one-on-one had passed, and soon the story is one of rooms filled with bankers and lawyers, alternately negotiating the smallest details in a press release or coming up with financial projections to justify another couple billion dollars in their offer. In the end, of course, Kravis won. At least in the short term; by the late 1990s his firm divested its holding "with humble returns." Johnson, on the other hand, had resigned as CEO shortly after his group lost the bidding, walking away with a golden parachute worth $53 million. Still, as the authors point out in their new foreword, that "once-outrageous" amount seems practically "parsimonious" in light of the sums taken by today's CEOs, who can pull that much down in a yearly bonus. Or the amounts earned (read: stolen) by the folks at Enron. But more on them later in the week.