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CNN Sunday Morning

Interview With Beth Belton

Aired October 06, 2002 - 08:23   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.


MILES O'BRIEN, CNN ANCHOR: Martha, Martha, Martha -- why do we always say it three times? But it just works, Martha, Martha, Martha -- from the doyenne of domesticity to the maven of misbehavior -- that's a good line. Stewart denies any involvement in insider trading, but the upshot this week was her resignation from the board, not of her own company, but the New York Stock Exchange board of directors.
So, let's figure out what's next. To do that, we go to Beth Belton. She is online news editor for "Business Week" magazine. She joins us from Washington.

Beth, good to have you with us.

BETH BELTON, BUSINESS WEEK: Thanks, Miles.

O'BRIEN: All right, Martha resigned from the New York Stock Exchange. Most people didn't even know she was on the board. Actually, it's kind of comical that she still was on the board given all that we've been discussing about Martha over the past few months -- put that into context for us.

BELTON: Well, a -- I -- the New York Stock Exchange board did not ask for her resignation, but...

O'BRIEN: Oh, wait a minute, come on, there must have been a little wink, and a nod, and a nudge, don't you think?

BELTON: Well, I think that if she hadn't resigned relatively soon, they probably would have been winking and nodding pretty hard. The big question now, as you pointed out, is whether or not she's going to resign from the CEO-ship of her own company, and I'm not sure that she's going to. The question there is whether her board of directors is going to ask for her resignation, and that's sort of the $69,000 question.

O'BRIEN: Well, talk about a rock meeting a hard place, if you're the board of directors of -- after all, it is Martha Stewart's Omnimedia or Omni whatever it is -- it's all about Martha, isn't it? And to take here out of that role of CEO, isn't that tantamount to closing up shop?

BELTON: Not necessarily. You know, there's been a lot of...

O'BRIEN: Wait a minute, Martha Stewart can be Martha Stewart without Martha Stewart? BELTON: Well, look...

O'BRIEN: Did you follow me?

BELTON: I do follow you. She's got a lot of products out there. Her magazine her could continue. I mean, look at the situation with Rose O'Donnell. It's never going to be the same, there's not doubt about that, but she's got a lot of products in K-Mart.

O'BRIEN: But, wait a minute, what does Rosie O'Donnell have to do with this?

BELTON: Well, look. She was sort of the namesake for this magazine that she took over. Now she's left, and they're going to try to figure out a way to keep that magazine going, not shut it down.

What I'm saying is, you know, Martha Stewart's reputation is ultimately damaged forever. I don't see any way that she can come out of this looking good, even if she's not prosecuted or convicted of a crime. But she's got a company. Ad sales for the magazine, for the most recent period, were up 5.3 percent. The stock price of the company, although it's down from a high of almost $21 in March to $6 and change only fell about 50 cents on word of her resignation from the New York Stock Exchange board.

O'BRIEN: Well, it's probably already baked in, it's all that -- all that is all there already right, don't you think?

BELTON: I do, but this is a real company. This company could survive without Martha.

O'BRIEN: Really? All right -- I'm just a little flabbergasted by that, but I guess hey, listen, this is America -- who knows.

Let's talk about Douglas Faneuil -- no relation to the hall (ph) that I know of anyhow, but Faneuil is his name, and he has copped a plea, as they say, in cop talk, and there he is, you know, doing what they call the perp walk. But anyway, Mr. Faneuil is singing like a canary to continue my bad, tawdry crime novel language here, but he does have some information, doesn't he?

BELTON: He does, and he's made life unbelievably difficult for Martha Stewart's broker and for Martha Stewart. He has, in effect, come forward and said, no, the version of events that they've given you is not what really happened.

O'BRIEN: So, does he have in his possession some sort of smoking gun -- e-mail, phone call, whatever -- that puts her right on the ropes?

BELTON: Well, I'm not sure that that's the case. I think if there were a smoking gun, the prosecutors would have probably already charged Martha and she would have already done her own perp walk. It makes -- it looks bad, there's not doubt about it, but I'm not so sure that they're going to be able to get a conviction, and that may be why you've seen them wait and wait. Now, of course, we have the broker here. We don't know what's going on with him yet, and if he's in possession of a smoking gun, then the picture changes.

O'BRIEN: All right, let's talk about -- and this is kind of related to what you were saying earlier that the Martha Stewart empire transcends the woman. I am curious, to what extent is this a tempest in a Wall Street teapot for folks in Peoria who are so enamored with her style? I mean, in other words, is business still good?

BELTON: You mean for Martha?

O'BRIEN: Yes, her -- how's her company doing?

BELTON: Her company...

O'BRIEN: Forget the stock for a minute.

BELTON: Her company is -- forget the stock -- ad sales for "Martha Stewart Lifestyle" Magazine were up 5.3 percent, in an environment...

O'BRIEN: There you go, wow.

BELTON: I mean, look, magazine ad revenues are not spectacular right now, so that's something that she can be proud of. It's of course, it's not known what she charged for those ads. She may have slashed prices, you know, to get the ad sales up.

O'BRIEN: Chopped them up like a salad.

BELTON: Look, people -- you see a lot of letters to the editors in publications around the country defending Martha. I mean, in many circles -- look -- she became a caricature of herself, and this is sort of the icing on the cake, if you will, to continue your metaphors, for Martha's -- for making fun of Martha, but there is a real company.

Over the long hall, can the company survive? That's anybody's guess, but this isn't a company that's going to, you know, fall off the edge of a cliff. If that would have, if that was going to happen, actually it would have already happened.

O'BRIEN: Maybe Rosie O'Donnell could be CEO of the new Martha Stewart -- unified theory right there, I don't know.

All right, Beth Belton, thank you very much for playing along with my silly puns and language and all that stuff. We appreciate your joining us, giving us some insights on all this.

BELTON: Good to be here, Miles.

O'BRIEN: Our pleasure.

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 October 6, 2002 - 08:23   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Martha, Martha, Martha -- why do we always say it three times? But it just works, Martha, Martha, Martha -- from the doyenne of domesticity to the maven of misbehavior -- that's a good line. Stewart denies any involvement in insider trading, but the upshot this week was her resignation from the board, not of her own company, but the New York Stock Exchange board of directors.
So, let's figure out what's next. To do that, we go to Beth Belton. She is online news editor for "Business Week" magazine. She joins us from Washington.

Beth, good to have you with us.

BETH BELTON, BUSINESS WEEK: Thanks, Miles.

O'BRIEN: All right, Martha resigned from the New York Stock Exchange. Most people didn't even know she was on the board. Actually, it's kind of comical that she still was on the board given all that we've been discussing about Martha over the past few months -- put that into context for us.

BELTON: Well, a -- I -- the New York Stock Exchange board did not ask for her resignation, but...

O'BRIEN: Oh, wait a minute, come on, there must have been a little wink, and a nod, and a nudge, don't you think?

BELTON: Well, I think that if she hadn't resigned relatively soon, they probably would have been winking and nodding pretty hard. The big question now, as you pointed out, is whether or not she's going to resign from the CEO-ship of her own company, and I'm not sure that she's going to. The question there is whether her board of directors is going to ask for her resignation, and that's sort of the $69,000 question.

O'BRIEN: Well, talk about a rock meeting a hard place, if you're the board of directors of -- after all, it is Martha Stewart's Omnimedia or Omni whatever it is -- it's all about Martha, isn't it? And to take here out of that role of CEO, isn't that tantamount to closing up shop?

BELTON: Not necessarily. You know, there's been a lot of...

O'BRIEN: Wait a minute, Martha Stewart can be Martha Stewart without Martha Stewart? BELTON: Well, look...

O'BRIEN: Did you follow me?

BELTON: I do follow you. She's got a lot of products out there. Her magazine her could continue. I mean, look at the situation with Rose O'Donnell. It's never going to be the same, there's not doubt about that, but she's got a lot of products in K-Mart.

O'BRIEN: But, wait a minute, what does Rosie O'Donnell have to do with this?

BELTON: Well, look. She was sort of the namesake for this magazine that she took over. Now she's left, and they're going to try to figure out a way to keep that magazine going, not shut it down.

What I'm saying is, you know, Martha Stewart's reputation is ultimately damaged forever. I don't see any way that she can come out of this looking good, even if she's not prosecuted or convicted of a crime. But she's got a company. Ad sales for the magazine, for the most recent period, were up 5.3 percent. The stock price of the company, although it's down from a high of almost $21 in March to $6 and change only fell about 50 cents on word of her resignation from the New York Stock Exchange board.

O'BRIEN: Well, it's probably already baked in, it's all that -- all that is all there already right, don't you think?

BELTON: I do, but this is a real company. This company could survive without Martha.

O'BRIEN: Really? All right -- I'm just a little flabbergasted by that, but I guess hey, listen, this is America -- who knows.

Let's talk about Douglas Faneuil -- no relation to the hall (ph) that I know of anyhow, but Faneuil is his name, and he has copped a plea, as they say, in cop talk, and there he is, you know, doing what they call the perp walk. But anyway, Mr. Faneuil is singing like a canary to continue my bad, tawdry crime novel language here, but he does have some information, doesn't he?

BELTON: He does, and he's made life unbelievably difficult for Martha Stewart's broker and for Martha Stewart. He has, in effect, come forward and said, no, the version of events that they've given you is not what really happened.

O'BRIEN: So, does he have in his possession some sort of smoking gun -- e-mail, phone call, whatever -- that puts her right on the ropes?

BELTON: Well, I'm not sure that that's the case. I think if there were a smoking gun, the prosecutors would have probably already charged Martha and she would have already done her own perp walk. It makes -- it looks bad, there's not doubt about it, but I'm not so sure that they're going to be able to get a conviction, and that may be why you've seen them wait and wait. Now, of course, we have the broker here. We don't know what's going on with him yet, and if he's in possession of a smoking gun, then the picture changes.

O'BRIEN: All right, let's talk about -- and this is kind of related to what you were saying earlier that the Martha Stewart empire transcends the woman. I am curious, to what extent is this a tempest in a Wall Street teapot for folks in Peoria who are so enamored with her style? I mean, in other words, is business still good?

BELTON: You mean for Martha?

O'BRIEN: Yes, her -- how's her company doing?

BELTON: Her company...

O'BRIEN: Forget the stock for a minute.

BELTON: Her company is -- forget the stock -- ad sales for "Martha Stewart Lifestyle" Magazine were up 5.3 percent, in an environment...

O'BRIEN: There you go, wow.

BELTON: I mean, look, magazine ad revenues are not spectacular right now, so that's something that she can be proud of. It's of course, it's not known what she charged for those ads. She may have slashed prices, you know, to get the ad sales up.

O'BRIEN: Chopped them up like a salad.

BELTON: Look, people -- you see a lot of letters to the editors in publications around the country defending Martha. I mean, in many circles -- look -- she became a caricature of herself, and this is sort of the icing on the cake, if you will, to continue your metaphors, for Martha's -- for making fun of Martha, but there is a real company.

Over the long hall, can the company survive? That's anybody's guess, but this isn't a company that's going to, you know, fall off the edge of a cliff. If that would have, if that was going to happen, actually it would have already happened.

O'BRIEN: Maybe Rosie O'Donnell could be CEO of the new Martha Stewart -- unified theory right there, I don't know.

All right, Beth Belton, thank you very much for playing along with my silly puns and language and all that stuff. We appreciate your joining us, giving us some insights on all this.

BELTON: Good to be here, Miles.

O'BRIEN: Our pleasure.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com