G+J GETS JARRED: On Thursday, the news broke that Rosie O’Donnell had filed an amendment to her lawsuit against Gruner + Jahr in which her lawyers claimed the company had cooked the proverbial books to keep her from exercising an escape clause in her contract. G+J conceded an escape clause existed, but said Rosie magazine’s newsstand data for 2002 was “highly accurate,” and that it therefore did not have to make any significant adjustment in its reports.
Of course, that didn’t mean G+J hadn’t overstated the magazine’s newsstand data in the past.
This story first appeared in the February 4, 2003 issue of WWD. Subscribe Today.
An investigation into its semiannual publisher’s statements revealed the company exaggerated newsstand sales of Rosie in 2001, the last period for which final numbers are publicly available. During the second half of 2001, Rosie’s single copy sales were overstated by an average of 67,000 copies an issue, roughly 14 percent of its actual newsstand total, according to data filed with the Audit Bureau of Circulations. Though that hardly approaches the level of overstatement recently seen at, say, fellow imprint YM, the numbers were still far above the 3 percent variance most titles come within when their publisher’s statements are audited.
Nor was 2001 the only year Gruner + Jahr overstated the numbers for Rosie. In the final six months of 2000, while the magazine was still called McCall’s, newsstand sales were inflated by 16 percent, according to ABC data.
A spokeswoman for G+J said Monday that overall circulation for Rosie in the last eight months of 2001 was within 1 percent of the actual total. But she did not address the fact that this could be because the company under-reported subscriptions as it boosted its newsstand sales. As reported, all but one title at G+J with single copy sales of more than 100,000 copies per month overstated newsstand sales by at least 10 percent between 2000 and 2001.
— Jacob Bernstein
PLUS BABY EQUALS THREE: Looking for further evidence that tabletop dancing socialites are out of fashion, replaced by Manolo-wearing power babes with baby strollers? Marie Claire fashion director Lucy Sykes and her financier husband Euan Rellie got together at Italian nightspot Serafina Sandro last week with a bunch of transatlantic friends, not to dance the night away, but rather to break the news that Lucy’s pregnant with their first child, due in July. Amidst a group that included New York Post Metro editor Jesse Angelo and writer Bridget Harrison, Rick Marin (author of “Cad — Confessions of a Toxic Bachelor”), Times writer Bob Morris and Lucy’s sister Alice and brother Tom, the noisy bunch stayed well past midnight, after which the crowd, minus Lucy, moved on through a series of watering holes. They finally ended up in Marin’s apartment where the revelry continued until 5 a.m.
TRACE ELEMENTS: Hipsters and investment bankers don’t usually mix, but the founders of Trace have hit the downtown style magazine lottery thanks to Goldman Sachs. In a complex deal, Trace has sold itself to a holding company in the Netherlands, majority-owned by the bank, named Alliance Trace Media. Flush with Goldman’s cash, the new company also has bought an 80 percent stake in MCM Africa — an African-urban-themed cable channel in France controlled by Lagardère, the parent of Hachette Filipacchi.
The transatlantic synergy has already started — the magazine, published bimonthly here and in the U.K., will go monthly in the fall, when a monthly French edition also will launch. Founder-editor Claude Grunitzsky said he plans to funnel cash into marketing and promotions in order to double circulation to 200,000 in just two or three years.
The deal instantly catapults Trace from the ranks of Black Book, Flaunt and everyone else fighting for the same Prada ad pages. It also represents the total so far of Goldman’s media investments almost a year after it was reported that the bank had set aside $1 billion for media purchases, which it denied. In this case, the money flowed from Goldman’s urban investment fund earmarked for investment in minority-owned businesses. Grunitzsky wouldn’t give any numbers from the deal, but mentioned that he might own his baby again someday. “There’s some performance-related metrics that, if we hit, we could get the majority back, basically.”
— Greg Lindsay