Charges Abandonment of Staff and Contract

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NEW YORK ( -- This is the memo e-mailed to the staff of Gruner & Jahr USA in the wake of Rosie O'Donnell's announcement that she is terminating her association with the magazine that bears her name.

To: Gruner + Jahr USA Staff
Fr: Cindy Spengler
Re: Rosie Magazine
Date: September 18, 2002

As of 9:00 a.m. this morning Gruner + Jahr USA Publishing was informed by Rosie O'Donnell that she is terminating our joint venture agreement to publish Rosie magazine.

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It is truly shocking and disappointing that Rosie would walk away from her obligations to her staff, her business partner and her magazine audience. In doing so, she destroys the value of the business we created and violates the conditions of our binding contract.

It is unfathomable to us that she would abandon an entire staff and a magazine that was on track to achieve all agreed upon goals. It is further perplexing that she continued to give us feedback and story ideas for future issues while denying her real intentions.

Rosie magazine was well on its way to being profitable in the very near future. To unilaterally declare that the magazine as published no longer has her backing creates a risk of substantial costs associated with a shut-down. Rosie cannot simply ignore that obligation.

Gruner + Jahr USA is caught in the maelstrom of Rosie O'Donnell apparently abandoning her past. She has walked away from her television show, her brand, her public personality, her civility -- and now her fans, the advertising community, her business partner and her contractual responsibilities.

Gruner + Jahr USA has been very successful at attracting a vital audience for this type of magazine. There is a readership of over 17 million for Rosie. We are committed to serving this audience -- the 30 to 45 year old woman seeking a contemporary magazine -- regardless of Ms. O'Donnell's decision.

We are considering our legal and publishing options. Our primary concerns will be the well-being of the Rosie staff, our fiduciary obligation to our shareholders and our commitment to our advertisers and readers.

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