HE SAID, SHE SAID: It was like watching a train wreck.
And so the viewers gathered Thursday for the first day of the Gruner + Jahr v. Rosie O’Donnell court case, practically the first corporate dispute of its sort to actually make it to trial.
This story first appeared in the October 31, 2003 issue of WWD. Subscribe Today.
“I’m going to be giving out free stuff from ‘Taboo’ on the court steps daily,” O’Donnell had said two weeks before the case moved forward.
The surprising thing was that there seemed to be no autograph seekers whatsoever. Instead, the courtroom was filled mainly with media reporters and junior level correspondents from the local news stations sent out to make sure nothing really amazing happened. Oh, and a reporter from Us Weekly was there too.
First came a blistering attack on O’Donnell’s character that was delivered by G+J’s lawyer, Marty Hyman, who railed against her irresponsibility at having walked away from the magazine, tossing 100 people out of their jobs and costing G+J “tens of millions of dollars.”
He then laid out through a series of e-mails and past conversations how O’Donnell’s erratic behavior made it impossible to run the magazine.
O’Donnell, Hyman claimed, “threw a foul-mouthed temper tantrum” on editor Susan Toepfer’s third day of work. “Her third day!” he exclaimed, as if celebrities time their tantrums logically. “And she delivered an edict that she would not work with her,” even after, he claimed, O’Donnell had greenlighted her hire. The dispute between O’Donnell and her publisher arose over the replacement of editor Cathy Cavender with Toepfer.
“She’s no Mother Teresa,” Lorna Schofield, an attorney for O’Donnell, admitted within moments of her opening. But, she argued, “what she is and who she is are important to this case. Her name and integrity are what she values most.”
But while G+J’s attack was unrelenting, O’Donnell’s lawyers highlighted some chinks in the publishing company’s armor.
For one, there was the e-mail written by chief financial officer Larry Diamond to G+J international head, Axel Ganz, in which Diamond talked about how the magazine needed to manipulate its financials in order to meet its targets. There was a provision in O’Donnell’s contract that allowed her to walk if losses exceeded $4.2 million.
“The management team of G+J USA is recommending to you that we manage the financials such that we do not fall below the required threshold point, so that we can continue to publish Rosie,” the e-mail read. “We are asking for your approval to this strategy.”
Lawyers for the plaintiffs countered that there is no substantial proof of this and that to infer manipulation is a misreading of the e-mail. But the debate over who had editorial control was not made any clearer by the prosecution’s first witness, Family Circle editor Susan Ungaro, who helped bring O’Donnell to G+J and worked as an editorial consultant for its first year of publication.
While recounting conversations with O’Donnell, the perennially perky Ungaro expressed her own confusion over who was making the decision about the change in editors. “I thought it was collaborative, but yes [I thought it was her decision],” she said.
When O’Donnell expressed moral reservations about the switch, Ungaro recalled telling her, “You should be able to make this decision.”
And there were moments in her testimony that made the company look like network executives ordering reality shows five minutes after the trend had expired — as when Ungaro remembered being told the magazine wasn’t similar enough to People, and said that her own role as an editorial consultant was supposed to have been “like Ellen Levine’s at Oprah.” (Levine is the über-successful editor of Good Housekeeping who helped launch O.)
O’Donnell’s lawyers argued that the company aimed to reduce the magazine’s political quotient in favor of more celebrity, as well as fashion, a decision O’Donnell felt did not reflect her ideals.
More testimony is expected over the next week in the non-jury trial. — Jacob Bernstein
FORGET RIDING OFF INTO THE SUNSET: When Ed Kosner left the New York Daily News, he told colleagues the only person he was retiring from was Mort Zuckerman. Now, he’s found his next move: He’s writing a book. The title? “Dolly, Kay, Rupert, Mort, and Me.”
“It’s a life in journalism,” Kosner said when reached for comment. The book will be about his life working with The New York Post under Dorothy “Dolly” Schiff, the Post’s former owner, Newsweek with owner Kay Graham, New York Magazine (when owned by Rupert Murdoch) and, finally, Mort Zuckerman at the Daily News.
The proposal should be out in the next month and ICM’s Amanda “Binky” Urban is repping him on it.
“I think Mort has no idea he’s going to be a chapter in a book,” said one source, “and Ed is none too happy with him…”
And Kosner isn’t the only one thinking about the next phase of his career. At the book party for Michael Wolff’s “Autumn of the Moguls,” Ron Galotti was milling around Michael’s (i.e. the restaurant) with a big grin on his face. What brought him out? Might it not just be the open bar? Might Mr. Big, as sources said, be taking a look at New York Magazine with Wolff and his partner, Donnie Deutsch? “Michael’s taking a look at New York Magazine,” he said with a smile before running off into the crowd. Well, you heard it here first. — J.B.
THIS MAGAZINE HAS BEEN DISCONTINUED: Primedia looks prepared to sell New York Magazine no matter what, so it’s a good thing yet another bidder has arrived on the scene.
Sources said Village Voice Media chief executive officer David Schneiderman is perusing the black book with Goldman Sachs. The Voice and New York have been linked once before — when Rupert Murdoch owned them both in the Seventies — but he couldn’t make it work then. Several attempts to reach Schneiderman were unsuccessful.
Goldman Sachs is the exact opposite of the high spender Primedia’s board is waiting for — but it certainly is getting its balance sheet ready for a sale.
Buried beneath the bad numbers in Thursday morning’s quarterly earnings announcement — declining revenues, shrinking cash flow and a $43.7 million net loss — was Primedia’s decision to list New York as one of its “discontinued operations,” in effect telling shareholders and the federal government that New York won’t be around this time next year.
Primedia could still change its mind — on the call, chairman Dean Nelson said the sale won’t finish before New Year’s — but it’s a strong message to send the investment community while its bankers at Allen & Co. are still trying to convince interested parties into thinking that it will pull the magazine off the block if the bids are too low — say, less than $50 million.
“I’m not convinced” that they’ll sell no matter what, said one source close to the sale, who added that Allen & Co. is still talking a mean game. “That could just be bankers’ talk, because they’re disappointed with the ranges. Knowing them, they’ll keep fishing for that great vanity publisher in the sky that might emerge with a topping bid.” — Greg Lindsay and J.B.