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PREVIEW / Oct. 27 -- Nov. 2

Rosie and Publisher to Face Off in Court

October 27, 2003|From Reuters

Rosie O'Donnell and her former publishing partner are set to face off in a New York court this week in a much-hyped breach-of-contract battle following the messy demise of the entertainer's namesake magazine.

O'Donnell, known for her brashness and liberal views, was once dubbed the "Queen of Nice" by her fans. But former partner Gruner + Jahr USA Publishing says otherwise.

It charges that everything unraveled at the briefly popular but now defunct Rosie magazine when the comedienne shut down her daytime TV show in 2002 and moved away from her fun-loving image.

Rosie magazine, aimed at women 30 to 45 years old, enjoyed moderate success at first. But by the middle of 2002, the relationship between O'Donnell and G+J had soured.

Disputes involved issues such as changes in editorial staff and the editorial content of the magazine.

The showdown between O'Donnell and Gruner + Jahr is expected to open in a Manhattan courtroom Tuesday and promises to provide rich fodder for the city's tabloids.

"It's going to be watched a lot just because of the celebrity element -- that's America for better or worse," said Kevin Keller, a professor at the Tuck School of Business at Dartmouth College. "But from a marketing angle, I think it does raise an issue about the whole issue of people as brands and what are some of the business implications of that."

G+J, which is majority-owned by German publishing giant Bertelsmann, slapped O'Donnell with the $100-million breach-of-contract lawsuit last year after she pulled out of their joint venture to publish the magazine. O'Donnell has countersued, seeking $125 million in damages.

"The evidence will show ... that O'Donnell breached the joint-venture agreement when she decided to walk away from the magazine without legal justification, resulting in the loss of more than 100 jobs, and causing G+J to lose tens of millions of dollars," a G+J spokeswoman said.

O'Donnell, whose lawyers include former U.S. Atty. Mary Jo White, claims the publisher seized control of the magazine, fired editors who were loyal to her and tried to smear her reputation.

"G+J breached its fiduciary duties to Rosie by dishonestly 'managing' Rosie magazine's financials," one of O'Donnell's lawyers, Lorna Schofield, said in a statement. At the same time, "G+J was taking steps to usurp her editorial control" of the magazine, she said.

Rosie magazine was launched in 2001 as a makeover of the venerable women's magazine McCall's. It became part of a string of celebrity-driven magazines, along with Oprah Winfrey's O, The Oprah Magazine and Martha Stewart's Martha Stewart Living.

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