Up In Arms Over Rosie

Folio: The Magazine for Magazine Management, Sept 1, 2002

Byline: JILLIAN S. AMBROZ AND GEOFF VAN DYKE

In early July, Rosie almost died.

Or so it appeared. Just three days after Susan Toepfer was hired to replace Cathy Cavender as editor-in-chief of the magazine, Rosie O'Donnell, its namesake and editorial director, clashed with the new editor. O'Donnell, in fact, tried to fire Toepfer, who had jumped ship as deputy managing editor of People to head up the high-profile women's magazine that had evolved from Gruner + Jahr USA's 125-year-old McCall's a year earlier. She drafted an editor's note declaring she had brought back Cavender as well as creative director Doug Turshen, who had also been given the axe. O'Donnell soon discovered, however, that she had no legal right to undo the personnel shakeup wrought by Daniel B. Brewster, Jr., G+J's CEO. Livid, she decided to walk from her joint venture with G+J.

"Rosie called up Dan Brewster and cussed him out on the speakerphone," said a source familiar with the interaction. "She insisted he be brought into the room, and she said, 'I'm resigning. Take my name off of the magazine. Screw you. I don't want anything more to do with it.'"

The magazine's life during that week in July may have been saved by a technicality. O'Donnell's lawyer, Mary Jo White, a partner at Debevoise & Plimpton in New York City, reportedly advised her that, based on her contract with G+J, she couldn't just up and bolt. Now White and G+J's attorney, George T. Frampton, Jr., a partner at Boies, Schiller & Flexner in Washington, D.C., are working to iron out the "creative differences," hoping to keep the magazine on the presses. Both lawyers declined requests for interviews.

The nascent legal battle is only the latest issue challenging Rosie. Just as newsstand sales began to plummet this spring, O'Donnell had outed herself as a lesbian in her widely publicized autobiography, Find Me. In May, a prime promotional vehicle for the magazine was lost when "The Rosie O'Donnell Show" aired live for the last time. Now O'Donnell wants the magazine to reflect her edgier persona, which publicly emerged over the spring and summer.

While the lawyers hash out the details, G+J is in a tailspin to secure Rosie's editorial mission, keep the ads rolling in, and turn-around dismal single-copy sales. The question looming large is: Can the magazine be saved? And, more important, is it worth the effort?

CRISIS MANAGEMENT

Rosie wrangling is the trickiest and most critical maneuver to keep the magazine afloat.

O'Donnell's approach to editorial management is at best contradictory. In the press, she has demanded full control of the magazine. But in internal memos between O'Donnell and G+J management, she has consistently acquiesced to the company's wishes. In an e-mail about the firing of Cavender and Turshen and the hiring of Toepfer, O'Donnell wrote to G+J management: "If you are sure that this is the woman, then hire her and be as thankful to [Cavender and Turshen] as you can... Just e-mail me your decision so I can stay out of it."

But O'Donnell has publicly bashed the magazine - calling it "safe and boring" - and claimed a desire for total control. She's morphing into the publishing company's worst nightmare, potentially undermining the entire venture.

It's a risk executives at G+J should have anticipated. What G+J and O'Donnell need "is not crisis management but a marriage counselor," says a crisis-management expert who specializes in entertainment and the media. "But really, [G+J's] problem is much more fundamental. They wanted the name without assuming the risk, and now they're paying the price. In cases like this, there isn't a lot that can be done. If Rosie digs in her heels, as it appears she's doing, they're f**ked."

Still, giving in to her demands for control won't come easy. It's unlikely G+J would want to give up its right to intervene editorially if O'Donnell wants to obliterate the values of the magazine with, say, a Mike Tyson cover, which she reportedly offered out as an idea at one brainstorming meeting. It's also a sure bet G+J doesn't share O'Donnell's desire to follow her own whim, survival be damned. In an unpublished editor's note, she wrote, "From now on, the covers of this magazine will directly reflect my vision of this magazine. If it does not sell on the newsstand - then we go down as the little magazine that couldn't."

The stakes for G+J are enormous. Each side reportedly put up $10 million at the launch of the magazine to cover production costs. But O'Donnell's financial investment in the venture has already been used up, and the operating expenses now come directly out of G+J's pocket, says a source familiar with the deal.

"To G+J, this is a business, and they're out to turn a profit," says Robert Crosland, managing director, AdMedia Partners, a New York-based investment banking firm. "Dan Brewster and all of his people who work on the magazine are publishing professionals. To Rosie, it's not a vocation, it's an avocation. It's not something she depends upon for her livelihood. You can't just turn over the reins to someone coming from outside the marketplace."