Was Formerly Exec VP at 'Martha Stewart Living' Magazine

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NEW YORK (AdAge.com) -- Although company insiders don't expect Gruner & Jahr USA Publishing to name its new president-CEO until later this month, there are signs the selection process has entered its endgame.

On May 7, Axel Ganz, the president of G&J's international division and the U.S. division's current interim CEO, told staffers in an e-mail that "the shortlist is at its shortest." The leading candidate, say insiders, is former TV Guide CEO and Martha Stewart Living founder David Steward.

TV Guide
Mr. Steward, while an executive vice president of Martha Stewart Living, was named to Ad Age's "Marketing 100" in 1995. He left Martha Stewart Living in 1997 after assisting in its buyout from Time Inc. (and being subsequently promoted to chief operating officer of Martha Stewart Living Omnimedia) to become president-CEO of TV Guide in its pre-Gemstar days. During the dot-com boom he founded streaming-video company Earthnoise. In early 2000 he was a candidate for president and chief operating officer at Rodale, a position that went to its current president-CEO, Steven Murphy.

Mr. Steward did not return calls placed to his residence seeking comment. Mr. Ganz has been interim CEO since Dan Brewster was ousted as president-CEO in January.

Others named as potential contenders include TV Guide Publishing Group President John Loughlin and ESPN's executive vice president, John Skipper. Through a spokeswoman, Mr. Loughlin confirmed he had been contacted by G&J some months ago, but dismissed talk he may still be in the mix as speculation. Mr. Skipper, who was also contacted by G&J, said, "I am not having any discussions" with G&J.

G&J: No comment
Mr. Ganz and a G&J spokeswoman declined to comment.

Whoever steps into G&J's top slot faces challenges on a number of fronts. The company took a series of public-relations body blows during its legal stalemate with entertainer and former business partner Rosie O'Donnell. During that trial, the testimony of a former top circulation executive revealed that G&J knowingly overstated newsstand circulation numbers for Rosie magazine.

That revelation, as well as some comments made in its wake by Mr. Brewster, touched off a round of intense scrutiny on magazine circulation, not to mention angry reactions from other publishers who sought to distance themselves from G&J. (Mr. Brewster later insisted his remarks on G&J's circulation -- "I don't think we have adopted any practices that, frankly, aren't widespread throughout the industry" -- were taken out of context.)

Troubled publications
G&J's formerly highflying teen title YM -- which had its own newsstand circulation overstatement flap early last year -- remains severely stressed, with ad pages down 44.8% in the first four months of this year. Its rate base, or circulation guaranteed to advertisers, was cut 25% to 1.5 million, after having been cut from 2.2 million in 2003. And while business title Inc. is showing signs of life from a 12.3% increase in ad pages through April, its sibling title Fast Company continues to slump, with pages down 27.2%

Mr. Brewster, under whom the company acquired Fast Company, was brought on when the German-owned company sought broad expansion in the U.S. Judging from Mr. Ganz' previous comments, that won't be the new CEO's mission.

"Everyone has become a bit more modest," he told Ad Age after Mr. Brewster's exit, adding that the company now preferred "internal growth" to acquisitions.

Still up in the air is the fate of Gala, a celebrity and lifestyle title Mr. Ganz launched in Europe, and for which G&J USA investigated a fall 2004 launch.

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