Gruner & Jahr USA Publishing

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2002 was decidedly schizophrenic for the company that President-CEO Dan Brewster took the helm of in June 2000. On the plus side: the biggest ad page gain in `02 for any top-10 magazine company, thanks to strong performances at Fitness, YM and Child. (Having a full year of Rosie on the books in '02 vs. its half-year in '01 didn't hurt either.) The bad news: the ongoing fallout from the disastrous partnership with Rosie O'Donnell over Rosie, which ended in a blaze of very public acrimony and sheaves of court filings. And YM was caught egregiously overstating its single-copy sales in the first half of 2001 by an audit in which the title was shown to be selling more than 200,000 fewer copies per month on newsstand than the claimed 594,000. This left the teen book missing rate base for six of 10 issues; led to a candy-store moment for advertisers left to choose between cash rebates or make-goods; and left observers wondering if other shoes might drop in future audits within the company. The $500 million-plus purchase of Fast Company and Inc. has yet to pan out. Both titles are still groping for the bottom, with ad pages respectively down 63.8% and 49.9% off their boom-year peaks; Fast Company has had weak newsstand results as well. The departure of Thomas Middlehoff as chairman of Bertelsmann, which owns 74.9% of Gruner & Jahr, meant Mr. Brewster lost a key company ally. But Gruner & Jahr's top leadership insists they're still behind Mr. Brewster, and even Mr. Brewster's confidants say he appears unfazed. This is good, because while the company showed some positive results in '02, there remain many open questions about what happens next. To watch for: whether or not any of the launch ideas percolating in the pipeline-like twentysomething female title Flash and European import celebrity title Gala-get the go-ahead, or if those who control the purse strings will allow this unit to play hard in the upcoming acquisition derbies.

Rating: 2 stars

Best performer:

Fitness

ad pages

up 44.1% to 988.5

circulation

up 7.3% to 1.3 million

Worst performer:

Fast Company

ad pages

down 18.4% to 805.3

circulation

up 3.7% to 734,449

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