The Rosie Trial | Day Five


Ms. O'Donnell Begins Testimony About a Magazine Deal Gone Sour

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NEW YORK ( -- It was late afternoon by the time the star took the stand at the Gruner & Jahr vs. Rosie O'Donnell trial yesterday.
Photo: AP
Rosie O'Donnell told the court that she liked Gruner & Jahr President-CEO Dan Brewster -- when she first met him.

Previous Courtroom Stories:
CEO Dan Brewster Fiercely Defends Gruner & Jahr Actions
CMO Describes Breast Cancer Insult by Rosie O'Donnell
Gruner & Jahr Appears to Strengthen Case on Editorial Control Issue
Testimony Describes Screaming Matches, Struggle Over Magazine Focus
Opponents Flail Each Other Over Who Did What at 'Rosie' Magazine

Ms. O'Donnell, whose name was on the cover of the now defunct magazine that is at the center of this clash, exerted a distinct gravitational pull on the courtroom. The room, packed with press and the occasional well-wisher, sounded primed for periodic laughs. Ms. O'Donnell's attorney and even Judge Ira Gammerman appeared amused at points by the star's presence and occasional wisecracks.

"Just try not to editorialize," Judge Gammerman admonished her at one point after Ms. O'Donnell spoke about the importance of staying "true to essence ... like standing up [for herself] in this trial."

Highly personal
A good portion of her testimony centered on Dan Brewster, Gruner & Jahr Publishing USA's president-CEO. Mr. Brewster is the other central figure of the trial, and the business squabbles between them became highly personal, as recent testimony has shown.

But Ms. O'Donnell sounded somewhat taken by him when she recounted their first meeting. "I was sort of impressed with the way he looked -- very put together," she recalled. "I said, 'You look good.'" She said Mr. Brewster responded by saying, "Yeah. You're wearing bike shorts.' " She also spoke of being impressed by the fact Mr. Brewster's father, Daniel Brewster, was a U.S. Senator.

Despite Mr. Brewster's pedigree and natty appearance, though, Ms. O'Donnell testified that she had planned not to go forward with the Rosie magazine concept, but Mr. Brewster lobbied for an additional meeting. (On Wednesday, in one of the hottest moments of his cross-examination, Mr. Brewster denied he needed to persuade a reluctant Ms. O'Donnell into going along with the venture, calling that assertion "absolute dead, outrageously wrong.") In the second meeting, Ms. O'Donnell said she told her partner, Kelli Carpenter, that Mr. Brewster "made a convincing plea"; that the way he spoke to Ms. O'Donnell's social concerns "resonated within me"; and that she was on board.

'Controlling bitch'
"At the time, he thought I had a good sense of humor," she testified. She said she had made him laugh when, after Mr. Brewster asker her whether she would be "a controlling bitch like Martha [Stewart] and Oprah [Winfrey]," she retorted, "They're pretty successful controlling bitches, don't you think?"

But things soured quickly.

In a late 2001, not long after the May launch of Rosie, Ms. O'Donnell and Mr. Brewster met along with her brother Ed, business manager Dan Crimmins and G&J's chief marketing officer, Cindy Spengler, to discuss replacing publisher Sharon Summers. In a deposition, Ms. O'Donnell termed Ms. Summers "horribly inadequate." Ms. O'Donnell said she was so upset by Mr. Brewster's behavior -- which she said reeked of "arrogance" and was disrespectful of her brother -- that she burst into tears after the meeting ended and demanded of her advisers: "Tell me how I can get out of this magazine deal."

Mr. Brewster's account of the same meeting was so different that he and Ms. O'Donnell appeared to be describing wholly different events.

'Editorial control'
Addressing the "editorial control" dispute that lies at the heart of the parties' competing $100 million lawsuits, Ms. O'Donnell said she understood that G&J would control the business side and she would control the creative side. She said she believed that Mr. Brewster's veto was only to be used if she "brought in something crazy."

"That's the contract I thought I was signing," O'Donnell said.

The agreement between G&J and Ms. O'Donnell's Lucky Charms Entertainment was entered into evidence Wednesday during Mr. Brewster's opening testimony. It said: "[Ms. O'Donnell] shall hold the position of Editorial Director of the Magazine, with control over the editorial process and editorial staff, subject only to the veto of" Mr. Brewster. Ms. O'Donnell "shall relinquish editorial control of each issue of the Magazine during the period one week prior to the editorial close."

Brewster's testimony
Starting off yesterday's proceedings, Mr. Brewster endured another tough go-round of cross-examination from Ms. O'Donnell's attorney Matthew Fishbein. Mr. Fishbein, pacing back and forth behind his podium with hands clasped behind his back, hammered Mr. Brewster on a memo from G&J's chief financial officer, Larry Diamond. The memo requested permission from G&J's parent company, Bertelsmann, to "manage the financials such that we do not fall below" a loss level significant enough to allow either party to terminate the joint venture.

After a verbal tug-of-war and insisting that remark had to do with estimates, not actual financial results, Mr. Brewster said, "There was no managing of any financials."

Overstated newsstand sales
Mr. Fishbein also went after serious discrepancies in the newsstand sales figures G&J presented to circulation agency Audit Bureau of Circulations and what ABC found when it released its audit of Rosie's 2002 newsstand numbers. (As reported in Advertising Age and elsewhere, G&J overstated its newsstand sales for the first half of 2002 by 32%.)

At one point Mr. Brewster sought to dismiss Mr. Fishbein's line of questioning about the importance of making rate base, or circulation guaranteed to advertisers, saying magazine rate bases are often "a function of how much you want to spend when you go out and buy circulation."

Kenneth Collins, a partner for media investment bank DeSilva & Phillips, testified that by his reckoning, Rosie's asset value for G&J was between $60 million and $65 million. But the value of his testimony appeared gravely wounded when Judge Gammerman cut short his cross-examination and declared that "he's relying on numbers there's no foundation for" and abruptly dismissed Mr. Collins.

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