A rexblog G-J circulation-cooking retrospective: Folio:’s Michael Rovner (and others) are reporting some custodial activities at Gruner & Jahr USA.
Cindy Still, who joined Gruner & Jahr in March 2004 as executive vice-president, consumer marketing, cleaned house on Monday, sacking several mid-to-upper level staffers in the circulation departments at Inc. and Fast Company. The dismissals reportedly left only a few folks in the circulation department at Fitness magazine. When reached by Folio:, Sue Geramian, vice-president corporate communications said, “It just happened, no decisions have been made and Cindy is evaluating how the department will be restructured going forward.”
As the five readers of this weblog may recall, we used up lots of free server space on this topic last year but then decided to drop the subject after the controversy widened to include a magazine we compete with when not blogging, one apparently with fewer circ people today. However, today’s news did make the rexblog nostalgic for the good old blogging days when we posted the following; back before this blog started referring to itself in the third-person-weblog tense:
While I’ve avoided the Rosie trial in much the same way I avoided her magazine and TV show, today’s revelations regarding the falsification of ABC numbers hits the rexblog radar screen. According to ABC news (no relation to ABC numbers) the chief financial officer of Gruner + Jahr USA, publisher of Rosie O’Donnell’s magazine, admitted Monday that his company reported false circulation figures to hide the magazine’s losses. Lawrence Diamond, the CFO, said executives at G+J decided to “manage the financials” of the magazine, “Rosie,” so they could keep publishing. If the magazine lost more than $4.2 million in a fiscal year, O’Donnell would have been permitted to end her arrangement with G+J. I now officially take back any prediction of a certain victory for G+J. All I’m certain of now is that everyone associated with this case will be found guilty of first degree hubris.
Cooking with G+J: The allegations that G+J cooked the circulation figures of Rosie Magazine are being denied by the company. However, I’m confused. I thought it was their own CFO who described under oath a practice that sounds like supplying bogus numbers to ABC. As I said yesterday, this tid-bit from the trial, if it turns out to be what it sounds like it is, will have major ramifications for the consumer magazine industry and the audit bureau folks.
Is Dan done? Now that the Rosie trial has “ended,” the NY Post’s Keith Kelly wonders (in the form of a news article) about G+J USA’s CEO, Dan Brewster. In trying to decode the quotes and nuanced shadings of Kelly’s article, one would be led to compare Brewster’s prospects to that of, say, Steve Spurrier. As I’ve pointed out (and here), the real “story” of the Rosie trial, at least for the magazine industry, is the revelation that G+J deliberated manipulated circulation numbers in the first half of 2002. According to Kelly, G+J seems to have scrambled the cover-your-ass squad on this front, in part by, “bringing in circulation expert Gregory Zorthian, a veteran of Hearst Magazines and Time Inc., to go over the circulation practices within the company.” Here is my prediction. Mr. Zorthian will not like what he sees. Soon, Mr. Brewster will announce that he has accepted the job as head football coach at the University of Kentucky.
Harried Potter: Last week, on November 13, I pointed to a Keith Kelly article in the NY Post that was headlined, “Brewster’s Fortunes Look Less Rosie After Trail Loss”. That link will likely die soon, but in it, Kelly reports the obvious speculation of job insecurity for Dan Brewster, who pursued the ridiculous lawsuit against Rosie, oversaw the circulation-cooking scandal and engineered the purchase of two magazines for what is acknowledged to be, well, inflated prices. Today, Diane Potter, senior vice president and director of consumer marketing at G+J, offered her resignation “because she believes it in the best interests of the company,” according to the AP. One doesn’t have to be a herder to know a scapegoat when you see one. I will stop my comments there, but I’m sure it is apparent that I think there are others at G+J USA who should do the right thing.
The Brewster crows: A day after the WSJ broke the story (no, wait, they didn’t, clarifies the NY Times), others follow-up on the Daniel Brewster “ouster” story. According to the NYT, Brewster told a group of G+J executives that he anticipated being fired. According to the NY Daily News, he denied that he is being fired. Perhaps it was this type of failure to keep his stories straight that led to his demise.