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CNN Live At Daybreak

'Rosie' Lawsuits

Aired November 07, 2003 - 07:04   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


SOLEDAD O'BRIEN, CNN ANCHOR: It is the war of the Rosies, the star and her now-defunct magazine. Rosie O'Donnell and the company that published her magazine are suing each other for breach of contract. Rosie is expected to return to the witness stand this morning.
CNN's Mary Snow joins us live from the courthouse here in New York City with the very latest on that.

Mary -- good morning.

MARY SNOW, CNN CORRESPONDENT: Good morning, Soledad.

Rosie O'Donnell took the stand late yesterday, talking about the start of what was "Rosie" magazine. She said she told the publisher she wanted editorial control, and that he joked back with her asking her if she was going to be a controlling expletive, just like Oprah and Martha Stewart. She said she laughed at that comment and pointed out that both of them were successful controlling expletives. That was the start of a business venture that turned very ugly.

(BEGIN VIDEOTAPE)

SNOW (voice-over): No stranger to the spotlight, this is one stage that appeared to make Rosie O'Donnell nervous. Referring to the judge as, "Sir," she even told him at one point, this is the first time I'm doing this.

Outside, she was asked how she felt she did.

ROSIE O'DONNELL, ENTERTAINER: And I sat through their entire case. I was hoping for summary judgment. I will now wait until the end of the case, and then I feel fairly certain that the judge will decide in our favor.

SNOW: In stark contrast to previous days when testimony became emotional and tempers flared, the day's testimony was subdued. It focused on financials with O'Donnell's lawyers questioning Gruner & Jahr's CEO, Daniel Brewster, about whether he deliberately inflated the magazine revenue numbers. Under her contract, if the magazine lost $4.2 million in a year, Rosie O'Donnell would be able to walk away. Brewster testified that he did not fix the numbers, and later told reporters that she broke the contract illegally.

DANIEL BREWSTER, CEO, GRUNER + JAHR USA: And the fundamental question is: Did she one day in a fit of tantrum simply walk away? And that's what she did, and that is what we're demonstrating. SNOW: In her testimony, O'Donnell said Brewster had to convince her to be involved with the magazine, that her contract gave her most of the editorial control and she was persuaded to approve the hiring of Susan Toepfer as editor in chief.

(END VIDEOTAPE)

Rosie O'Donnell is expected to take the stand when court resumes at 9:30 this morning, and she's expected to tell her side of those heated exchanges behind the scenes of "Rosie" magazine -- Soledad.

O'BRIEN: Mary, anybody else expected to be on the stand in addition to Rosie?

SNOW: Some of the former employees of the magazine. Possibly her brother could take the stand. And this case could be wrapping up as soon as Monday -- Soledad.

O'BRIEN: Mary Snow for us this morning at the courthouse. Mary, thanks.

"Celebrity Justice" correspondent Carolina Buia has been covering the case and has been talking to us about it for the last couple of days. She joins us to talk about the testimony.

Good morning. Nice to see you. Nice to have you.

CAROLINA BUIA, "CELEBRITY JUSTICE" CORRESPONDENT: Good to see you, too.

O'BRIEN: We've seen over the last couple of days sparks flying and these sort of emotional little mini-press conferences outside the courtroom each and every day. A different tone yesterday.

BUIA: Yes. Yesterday, she spoke just a little bit to the press, and she seemed just very focused on getting her testimony out there. And yesterday when she finally got on the witness stand, she was very different from the beginning of the trial when she was so outspoken outside the courtroom. Inside the courtroom, she was deferential to the judge. And for at least the first 15 minutes she looked a little uncomfortable and nervous, but she quickly got into that Rosie mode that we're so used to seeing her.

O'BRIEN: What was the core of the testimony yesterday? I mean, we heard from Mary sort of the combating expletives over, you know, what Rosie's role to some degree would be in this magazine, even though the two of them were kind of joking. Are you going to become a nightmare like the other two...

BUIA: Yes.

O'BRIEN: ... it seems as if the CEO was saying.

BUIA: Well, at the beginning of the testimony, she just basically laid out what projects she is currently involved in and a little bit about her background, where she came from, how she got to where she is. And then, she got into how Dan Brewster, the way she put it, was wooing her for this magazine. She says that with her first meeting at Gruner & Jahr, she went home, talked to Kelly Carpenter, her partner, and both of them decided it was not a good idea. But then, Dan Brewster had a series of other meetings with her, at which he convinced Rosie this was going to be a great joint venture.

O'BRIEN: Why does that matter that she was reluctant? And at the end of the day, doesn't what really matters is what's in everybody's contract? I mean, in some ways, we've heard a lot of the emotional stuff. But to some degree, won't the judge just say yes, she was given editorial control in this contract?

BUIA: That's exactly what he's going to do. And this is what it spells out in the contract. In Section 2 of the contract, it talks about editorial control, and it does say that Rosie has creative control over the magazine. But there are some safeguards in place. And, I mean, this is something that seems to me would be pretty standard. I've worked in magazines before.

It says that Gruner & Jahr in the last seven days before the magazine goes to press, they have ultimate power over what goes in the magazine and Rosie has to relinquish editorial control. This is more for practical purposes. I mean, you can't have somebody throwing a tantrum, oh, no, no, I want this picture re-shot two days before you go to press. That's expensive and can cost millions of dollars.

The other safeguard is if Rosie suggested anything that Gruner & Jahr considered outlandish, they could veto it, sort of like a presidential veto.

O'BRIEN: What's the sense right now of where the argument sits? Again, outside of the emotion, how do you feel about how each side is doing when they present their case?

BUIA: Well, since we've really only seen one side present their case, you know, I don't want to go either way or (UNINTELLIGIBLE) either way. And Rosie has just begun her testimony. Monday, we're going to have a better sense of where this is going, or possibly at the end of today.

But I do want to add, yesterday Gruner & Jahr had an expert witness on the stand, and Rosie's team punctured some holes in some of the numbers he had. You know, he was evaluating the magazine as of July of 2002, saying it was worth around 60 million. But all of his numbers came directly from Gruner & Jahr. And the judge said, hey, how is this a third-party independent valuation?

O'BRIEN: Carolina Buia, I'm sure we'll be continuing to check in with you on this case. Thanks for joining us this morning.

BUIA: Thank you.

O'BRIEN: Nice to see you, as always.

BUIA: Nice to see you, too. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.






Aired November 7, 2003 - 07:04   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: It is the war of the Rosies, the star and her now-defunct magazine. Rosie O'Donnell and the company that published her magazine are suing each other for breach of contract. Rosie is expected to return to the witness stand this morning.
CNN's Mary Snow joins us live from the courthouse here in New York City with the very latest on that.

Mary -- good morning.

MARY SNOW, CNN CORRESPONDENT: Good morning, Soledad.

Rosie O'Donnell took the stand late yesterday, talking about the start of what was "Rosie" magazine. She said she told the publisher she wanted editorial control, and that he joked back with her asking her if she was going to be a controlling expletive, just like Oprah and Martha Stewart. She said she laughed at that comment and pointed out that both of them were successful controlling expletives. That was the start of a business venture that turned very ugly.

(BEGIN VIDEOTAPE)

SNOW (voice-over): No stranger to the spotlight, this is one stage that appeared to make Rosie O'Donnell nervous. Referring to the judge as, "Sir," she even told him at one point, this is the first time I'm doing this.

Outside, she was asked how she felt she did.

ROSIE O'DONNELL, ENTERTAINER: And I sat through their entire case. I was hoping for summary judgment. I will now wait until the end of the case, and then I feel fairly certain that the judge will decide in our favor.

SNOW: In stark contrast to previous days when testimony became emotional and tempers flared, the day's testimony was subdued. It focused on financials with O'Donnell's lawyers questioning Gruner & Jahr's CEO, Daniel Brewster, about whether he deliberately inflated the magazine revenue numbers. Under her contract, if the magazine lost $4.2 million in a year, Rosie O'Donnell would be able to walk away. Brewster testified that he did not fix the numbers, and later told reporters that she broke the contract illegally.

DANIEL BREWSTER, CEO, GRUNER + JAHR USA: And the fundamental question is: Did she one day in a fit of tantrum simply walk away? And that's what she did, and that is what we're demonstrating. SNOW: In her testimony, O'Donnell said Brewster had to convince her to be involved with the magazine, that her contract gave her most of the editorial control and she was persuaded to approve the hiring of Susan Toepfer as editor in chief.

(END VIDEOTAPE)

Rosie O'Donnell is expected to take the stand when court resumes at 9:30 this morning, and she's expected to tell her side of those heated exchanges behind the scenes of "Rosie" magazine -- Soledad.

O'BRIEN: Mary, anybody else expected to be on the stand in addition to Rosie?

SNOW: Some of the former employees of the magazine. Possibly her brother could take the stand. And this case could be wrapping up as soon as Monday -- Soledad.

O'BRIEN: Mary Snow for us this morning at the courthouse. Mary, thanks.

"Celebrity Justice" correspondent Carolina Buia has been covering the case and has been talking to us about it for the last couple of days. She joins us to talk about the testimony.

Good morning. Nice to see you. Nice to have you.

CAROLINA BUIA, "CELEBRITY JUSTICE" CORRESPONDENT: Good to see you, too.

O'BRIEN: We've seen over the last couple of days sparks flying and these sort of emotional little mini-press conferences outside the courtroom each and every day. A different tone yesterday.

BUIA: Yes. Yesterday, she spoke just a little bit to the press, and she seemed just very focused on getting her testimony out there. And yesterday when she finally got on the witness stand, she was very different from the beginning of the trial when she was so outspoken outside the courtroom. Inside the courtroom, she was deferential to the judge. And for at least the first 15 minutes she looked a little uncomfortable and nervous, but she quickly got into that Rosie mode that we're so used to seeing her.

O'BRIEN: What was the core of the testimony yesterday? I mean, we heard from Mary sort of the combating expletives over, you know, what Rosie's role to some degree would be in this magazine, even though the two of them were kind of joking. Are you going to become a nightmare like the other two...

BUIA: Yes.

O'BRIEN: ... it seems as if the CEO was saying.

BUIA: Well, at the beginning of the testimony, she just basically laid out what projects she is currently involved in and a little bit about her background, where she came from, how she got to where she is. And then, she got into how Dan Brewster, the way she put it, was wooing her for this magazine. She says that with her first meeting at Gruner & Jahr, she went home, talked to Kelly Carpenter, her partner, and both of them decided it was not a good idea. But then, Dan Brewster had a series of other meetings with her, at which he convinced Rosie this was going to be a great joint venture.

O'BRIEN: Why does that matter that she was reluctant? And at the end of the day, doesn't what really matters is what's in everybody's contract? I mean, in some ways, we've heard a lot of the emotional stuff. But to some degree, won't the judge just say yes, she was given editorial control in this contract?

BUIA: That's exactly what he's going to do. And this is what it spells out in the contract. In Section 2 of the contract, it talks about editorial control, and it does say that Rosie has creative control over the magazine. But there are some safeguards in place. And, I mean, this is something that seems to me would be pretty standard. I've worked in magazines before.

It says that Gruner & Jahr in the last seven days before the magazine goes to press, they have ultimate power over what goes in the magazine and Rosie has to relinquish editorial control. This is more for practical purposes. I mean, you can't have somebody throwing a tantrum, oh, no, no, I want this picture re-shot two days before you go to press. That's expensive and can cost millions of dollars.

The other safeguard is if Rosie suggested anything that Gruner & Jahr considered outlandish, they could veto it, sort of like a presidential veto.

O'BRIEN: What's the sense right now of where the argument sits? Again, outside of the emotion, how do you feel about how each side is doing when they present their case?

BUIA: Well, since we've really only seen one side present their case, you know, I don't want to go either way or (UNINTELLIGIBLE) either way. And Rosie has just begun her testimony. Monday, we're going to have a better sense of where this is going, or possibly at the end of today.

But I do want to add, yesterday Gruner & Jahr had an expert witness on the stand, and Rosie's team punctured some holes in some of the numbers he had. You know, he was evaluating the magazine as of July of 2002, saying it was worth around 60 million. But all of his numbers came directly from Gruner & Jahr. And the judge said, hey, how is this a third-party independent valuation?

O'BRIEN: Carolina Buia, I'm sure we'll be continuing to check in with you on this case. Thanks for joining us this morning.

BUIA: Thank you.

O'BRIEN: Nice to see you, as always.

BUIA: Nice to see you, too. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.