It was a long, hot summer for O’Donnell and G&J, who came to loggerheads over the past few months over the issue of editorial control. One particularly sore spot for O’Donnell was an editorial meeting held in her personal office in July, when she was vacationing with her family in Miami. While it appeared that G&J would sell the title to O’Donnell outright, in the end the former TV talk show host said the magazine no longer reflected her “vision, values, and editorial direction” and she walked away from the magazine G&J launched in her image from the remains of McCall’s some 16-months ago. “My integrity and my name are at stake, and that price is too high,” O’Donnell said.
While not a complete surprise, the move came as a blow to advertisers and buyers that have built a relationship with the magazine and the Rosie brand. Peter Gardiner, partner and chief media officer at Interpublic Group’s Deutsch advertising, tied-in Almay cosmetics with print ads in the magazine, contests on its website, and product placement on O’Donnell’s now-defunct television show. “We’re obviously not thrilled it’s going away,” says Gardiner.
Another ad buyer, whose top ten agency has used Rosie on a very limited basis, says he is not surprised to see the very public rift between O’Donnell and G&J end with the closure of the magazine. “Who didn’t see this coming,” he asks, adding, “There are a lot of other places to go.” In fact, today’s crowded newsstand may be why so many advertisers were seemingly not sad to see one go – even if it was one of the biggest-selling magazines on the market.
Old Greenwich, Connecticut-based branding consultant Jack Trout says G&J took a risk when it put O’Donnell’s name on the cover. “Living brands don’t go forever because they’re people – and people are subject to do something stupid things or getting sick and dying.” Trout also believes the long-term growth potential of Rosie was limited by her exit from the television talk show scene. “The thing that drives the brand is the personality and the thing that drives the brand is television. Subtract TV from it, and you have nothing driving the personality. It’s the strength, but its also the weakness – you’re relying on that person’s performance in another medium to drive the brand.”
G&J was apparently of the same mind. “Gruner & Jahr USA is caught in the maelstrom of Rosie O’Donnell apparently abandoning her past,” said chief marketing officer Cindy Spengler in a company wide email. “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 contractual responsibilities.”
G&J USA president/CEO Dan Brewster met with Rosie staff members Wednesday to discuss the future of the magazine, which appears in doubt. What is for certain is the November issue has already gone to the presses, and farewell issue is scheduled for December.
Gardiner doubts he will buy any pages in the final issue, even though it may attract a larger number of readers, saying, “I don’t see any dramatic reason to be in there.” If O’Donnell attempts to parlay her Rosie experience into a new magazine, Gardiner also doubts he would be among its buyers. “We’d probably stay away from her, giving her track record because it doesn’t appear she is interested in building her brand. I think people are writing Rosie off.”
Through August, Rosie’s ad pages were up 103% compared to 2001. Its advertising revenues were up 125% to $90M. G&J executives were elated with the turnaround of the stodgy 125-year old McCall’s. “Rosie magazine was well on its way to being profitable in the very near future,” said Spengler. “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 simply cannot ignore that obligation.”
Legal action is likely, as both sides have already enlisted outside counsel in their ongoing debate. G&J, a unit of Bertelsmann AG, is represented by George Frampton Jr., of the Boies, Shciller & Flexner law firm. O’Donnell is represented by former Manhattan U.S. attorney Mary Jo White.
The next move for G&J remains unclear. Reconciliation seems unlikely, since both seem very happy to be going separate directions. But what path to lead Rosie the magazine down remains the question. G&J executives had already been contemplating the launch of another women’s title, and some insiders have hinted that a contingency plan for a divorce from O’Donnell was already in place. “They’re going to have to find a total new positioning,” says Gardiner. He and others doubt the McCall’s name will be revived, since it was tied to an image of a time gone by.
Rosie’s rate base is 3.5 million with a total monthly audience of 17 million, according to its publisher. Certainly, there was an audience for Rosie’s blend of how-to home tips, celebrities, and inspirational messages. Said a reader’s post to O’Donnell in the magazine’s chat room yesterday, “You did the right thing. Dust ‘em from your feet and move forward, girl.” It is quite clear to many in advertising that her future does not include building the Rosie brand.