The trial over the ill-fated Rosie magazine will be in its seventh day today and is expected to wrap up this week.
Ed O'Donnell, senior VP-marketing at NBC and an adviser to his sister on her business affairs, was called as witness Nov. 7. He testified that Cindy Spengler, G&J's chief marketing officer, told him the publisher had provided false circulation numbers to the Audit Bureau of Circulations.
He had been in contact with Ms. Spengler around the time G&J was hiring new Editor in Chief Susan Toepfer-with whom Ms. O'Donnell clashed loudly and often-in June of 2002, and was responding to Ms. Spengler's concerns over poor newsstand sales. Mr. O'Donnell said he felt the numbers "didn't look that bad." But he said Ms. Spengler warned him off numbers provided to Audit Bureau of Circulations and said, "We have the real numbers. They're much lower."
Mr. O'Donnell testified he "never heard" of such a thing, but said Ms. Spengler told him "everyone does it all the time."
In a cross-examination, G&J attorney Jeff Golenbock successfully challenged Mr. O'Donnell's contention that he had been looking at ABC newsstand numbers for the first half of 2002, as he'd stated, since those numbers were not available until well after he'd spoken with Ms. Spengler.
But Ms. O'Donnell's attorney, Lorna Schofield, flashed on screen a fax sent to Mr. O'Donnell on July 16, 2002, identified as "competitive newsstand data" and sourced to scan-data from major distributors. The document stated that Rosie's average newsstand sale for its January through May issues was 283,000. She then placed it side-by-side with figures G&J provided to the audit bureau, dated July 28, 2002. Those figures claimed an average newsstand sale of 415,000 for the same issues.
An ABC audit of G&J's newsstand figures for those issues, released just before the trial began, showed the actual figure was 272,008, close to the internal estimate provided to Mr. O'Donnell. The audit revealed that for the first half of 2002, G&J overstated newsstand sales at Rosie by 32%.
"[Ms. Spengler] said the numbers [G&J] provided to [the Audit Bureau] were not internal numbers," Mr. O'Donnell insisted during cross-examination.
A spokeswoman for G&J declined to comment, saying it was "an ongoing legal matter." An executive familiar with the situation, though, questioned when the newsstand figures provided in the fax to Mr. O'Donnell were calculated, saying they were merely "newsstand estimates from different points in time" and not confirmed final figures. When confronted with the similarity of numbers provided to Mr. O'Donnell compared to the ABC audit, the executive declined to comment beyond saying it was "somewhat of a coincidence."
Mr. O'Donnell's testimony capped off a week in which both parties' brands took serious hits. At one juncture, Ms. Spengler left the witness stand in tears. A breast-cancer survivor, Ms. Spengler testified that Ms. O'Donnell accused her of lying and told her, "Do you know what happens to people who lie? They get sick, and they get cancer." Ms. Spengler told Ad Age that, contrary to what Ms. O'Donnell claimed elsewhere, "she never apologized to me" for the remark. (Ms. O'Donnell's spokeswoman insisted she had.)
At stake in the dispute are competing breach-of-contract claims seeking at least $100 million in damages.
Read daily coverage of the trial at AdAge.com.