'ROSIE' PUBLISHER TELLS OF SCUTTLED SETTLEMENT TALKS

In Trial Postmortem CEO Dan Brewster Blames Rosie O'Donnell; She Denies It

By Published on .

NEW YORK (AdAge.com) -- Gruner & Jahr and Rosie O'Donnell had reached a tentative settlement to their legal battle three times in the past few weeks, but "in every single instance" the O'Donnell side came back
Photo: AP
Rosie O'Donnell said she will never speak to Gruner & Jahr again.
'Rosie' Trial Stories:
'ROSIE' TRIAL JUDGE SAYS NO DAMAGES PROVED
Tells Courtroom 'We Were Just Dealing With Bragging Rights Here'
'ROSIE' PUBLISHER CHARGED WITH FALSE ABC REPORTS
Gruner & Jahr Trial Opens Can of Circulation Worms
GRUNER & JAHR CHARGED WITH COOKING 'ROSIE'S BOOKS
Memo Cites Potential to 'Somewhat Control The Financials'
ROSIE O'DONNELL'S FINAL DAY OF COURT TESTIMONY
Wisecracks, Anger and Publishing Naivete
G&J EXEC REBUTS ROSIE O'DONNELL CLAIMS
Says There Was No Apology for Breast Cancer Insult
THE STAR TAKES THE STAGE AT THE ROSIE TRIAL
Ms. O'Donnell Begins Testimony About a Magazine Deal Gone Sour
ROSIE'S CHIEF ADVERSARY TAKES THE STAND
CEO Dan Brewster Fiercely Defends Gruner & Jahr Actions
GRUNER & JAHR EXEC BREAKS DOWN ON WITNESS STAND
CMO Describes Breast Cancer Insult by Rosie O'Donnell
ROSIE'S COURTROOM DAY 3: LEGAL LUMPS AND HIGH ABSURDITY
Gruner & Jahr Appears to Strengthen Case on Editorial Control Issue
ROSIE O'DONNELL'S BATTLES WITH EDITORS DETAILED
Testimony Describes Screaming Matches, Struggle Over Magazine Focus
ROSIE O'DONNELL AND GRUNER & JAHR TRIAL OPENS
Opponents Flail Each Other Over Who Did What at 'Rosie' Magazine

with deal-breaking additional demands, according to G&J CEO Dan Brewster.

Ms. O'Donnell's refusal to sign confidentiality and non-disparagement clauses scuttled at least one of the potential settlement deals last week, according to people familiar with the discussions. Ms. O'Donnell's spokeswoman would not comment on that matter.

Post-mortem
Mr. Brewster made his comments as he spoke with reporters last evening as both the publishing company and the press began their postmortem analysis of what had happened during eight grueling days of courtroom battles and revelations.

In further rebuttal comments, Ms. O'Donnell's spokeswoman said Ms. O'Donnell "continues to be willing to settle on reasonable terms," but "G&J has not." Matthew Fishbein, one of Ms. O'Donnell's attorneys, said after the court adjourned that no further settlement talks were scheduled.

The case reached an unexpectedly dramatic conclusion as testimony ended yesterday and Judge Ira Gammerman declared that neither party "is going to recover anything other than nominal damages."

No winner
Although both sides will now submit written summations and the judge is not expected to issue a final ruling for weeks, both sides appear to be left with wounds that have little chance of being salved by a massive cash infusion.

G&J initially sued Ms. O'Donnell for $100 million in damages, and Ms. O'Donnell countersued for $125 million.

Both sides must now assess the damage done to each other by the ugly public wrestling match.

Circulation issue
G&J must contend with angry advertisers after testimony revealed it knowingly misstated newsstand sales figures for the ill-fated Rosie magazine, which published from May 2001 until December 2002. And its peers in publishing now grumble that advertisers may use G&J's poor example to tar all magazines with doubts about circulation integrity.

Ms. O'Donnell, long active in breast cancer charities, is now known for snarling to a cancer survivor that people who lie "get cancer," and a number of her other temper tantrums were brought to light on the witness stand, some by the star herself.

"I'm very happy simply to say it's over," Ms. O'Donnell told the throng of reporters and cameramen on the front steps of the courthouse. She said she had "no vengeance" toward G&J, but that "I will never speak of them again."

'She took a beating'
Asked about the damage to Ms. O'Donnell's brand -- the protection and correct interpretation of which were conceptual underpinnings of her court case -- her spokeswoman conceded, "She took a beating in a place she never wanted to go. But out of darkness comes the light."

"The outcome is not, ideally, what we hoped for," admitted Ms. O'Donnell's chief adversary, Mr. Brewster. "It's also not a terrible outcome."

"The judge is basically saying this was an unhappy marriage and you are both somewhat reponsible and no one is guilty," said Axel Ganz, the Germany-based president of G&J's international division.

Doubted profitability
Judge Gammerman made clear all along he was unconvinced Rosie was a potentially lucrative business. On Friday he expressed bafflement over the vast sums the magazine lost -- around $18 million in its 19 months of operation. In his closing comment he said he found "nothing on the record" that "would indicate to me that I should find that anybody would have made any money on this."

Mr. Brewster conceded that his side's inability to portray Rosie to Judge Gammerman as a business promising serious profits as "one of the biggest mistakes" made.

Ms. O'Donnell herself, normally an ebullient presence when entering and exiting the courthouse, seemed noticeably more downbeat than others around her after the judge concluded the trial.

She did not entirely leave her wit behind, though. While thanking her lawyers from the courthouse steps, she said, "If you ever get sued for [$100 million] by a corporate giant, I highly recommend them."

'Nothing improper'
At that corporate giant, Mr. Brewster insisted the trial ultimately showed G&J "never 'managed the financials'" -- a phrase from an e-mail of G&J's chief financial officer, Larry Diamond, that Ms. O'Donnell's attorneys turned into something of a courtroom mantra. "Nothing improper was done," Mr. Brewster said. He also said he continued to be supported by his boss, Mr. Ganz, and Bernd Kundrun, G&J's chairman.

"We don't put someone in doubt just because he has fought for a case he thought was right and, OK, a judge looks at in a different way," Mr. Ganz said. Mr. Ganz added that both he and Mr. Kundrun were "totally in line together" in backing Mr. Brewster.

The circulation misstatement issue may not be easy to wish away. The Rosie overstatements come to light after a similar situation arose at G&J's YM earlier this year.

Widespread practices
Mr. Brewster said, "I don't think we have adopted any practices that, frankly, aren't widespread within our industry."

But he is hiring former Time and Fortune general manager Greg Zorthian as an independent auditor to pore over G&J's circulation processes. Asked about the ongoing status of Diane Potter, G&J's senior vice president for consumer marketing who admitted in her deposition to intentionally misstating newsstand sales figures, Mr. Brewster said she was "a very experienced circulation director" and that "I don't have any plans at the moment to make any changes."

But later he added: "The only thing I can say is that we will not sanction or tolerate any misstatement of numbers, period."

In this article:
Most Popular