- The Washington Times - Monday, October 21, 2002

NEW YORK
A year ago, publishers couldn't get enough of celebrity-centered magazines. With Martha Stewart Living and Oprah Winfrey's O thriving and the successful debut of Rosie O'Donnell's Rosie, namesake publications seemed a foolproof formula for turning prestige into profit.
Now, the stock-trading scandal involving Miss Stewart and the nasty clash over who runs Rosie's magazine has the industry reconsidering the wisdom of building a title around one person.
The Justice Department is investigating whether Mrs. Stewart lied to lawmakers about her sale of ImClone stock. She sold nearly 4,000 shares Dec. 27 one day before the government said it rejected the company's application for approval of a drug intended as a cancer treatment. Her company's stock has fallen from the midteens to as low as the $6 level, a swing of more than 60 percent.
The fear is that the problems will escalate to the point where Miss Stewart's image and her company's ability to sell products will be compromised.
"It would seem to be a stretch to think they could run it without her or with her in a lesser role," said Peter Appert, a media analyst at Goldman Sachs. "There are certainly plenty of competent people around her who could run the business, but from a marketing and PR perspective, this company is about her."
Miss O'Donnell's situation is different: She quit her magazine citing editorial disagreements, and is being sued by the magazine's publisher, Gruner + Jahr Printing and Publishing Co., for breach of contract and more than $100 million.
The magazine was barely a year old when rumors began to leak out of problems between Miss O'Donnell and G+J. Then she announced she was a lesbian and would end her TV talk show.
When quitting the magazine last month, Miss O'Donnell complained that she was denied the editorial control she was promised. The publisher responded by saying she acted irrationally and unprofessionally, overstepping the bounds of what their business arrangement had allowed.
"The Rosie brand is changing because Rosie is changing," said David Abrahamson, an associate professor at Northwestern's Medill School of Journalism. "If someone buys a certain brand expecting one thing, and gets another that can make the entities she's a spokeswoman for nervous."
Circulation figures, particularly newsstand sales, have slipped this year at Martha Stewart Living and Rosie magazine, but they're also lower at Miss Winfrey's magazine, which has been trouble-free.
And Mrs. Stewart's problems did not stop Kmart Corp. from running TV commercials recently with her promoting the home-goods product line she sells at the discount chain.
Some readers of her magazine say it isn't all about her, anyway.
"I don't really see myself canceling my subscription," said Kristen Gustafson, 26, of Bangor, Maine. "I have managed to separate the product from her, and look at it as Martha Stewart the brand. She's just the label on the magazine."
The strategy will continue to be tried whenever a publisher sees potential from another famous name.
"The shine is off until the next big star comes along," said Steve Cohn, editor in chief at Media Industry Newsletter in New York. "A Katie Couric magazine, for example."

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