WORLD: STUART ELLIOTT IN AMERICA

Forget Paris Hilton. Never mind Michael Jackson. Madison Avenue has its own messy scandal to chew on during this Thanksgiving holiday weekend: Rosie.

A bitter legal battle between the actress Rosie O'Donnell and Gruner & Jahr USA Publishing, the Bertelsmann division that was her partner in a magazine named after her, ended recently without a winner. That description covers not only the judge's decision to award no damages to either side, but also the fall-out from the bombs dropped during the two-week trial in a New York state court.

The trial was the culmination of a vicious feud between O'Donnell, a comedienne (Sleepless in Seattle) and chatshow host, and Daniel Brewster, the chief executive of G&J USA, over the abortive relaunch of the venerable monthly McCall's as Rosie.

Rosie, intended in the vein of name-as-the-title magazines such as Martha Stewart Living and O: The Oprah Magazine, was meant to revitalise McCall's, which badly lagged behind its rivals for ad revenues and circulation.

But oh, brother! After O'Donnell left Rosie in September 2002, claiming promises made about her authority had been broken, G&J USA closed the magazine and sued her for $100 million for breach of contract. O'Donnell countersued for $125 million, alleging her loss of control over Rosie's contents breached her contract.

The he-said, she-said testimony generated ugly headlines ranging from "Retched Time at Rosie Trial" (she vomited before arriving in court one morning) to "It Drove Rosie Mad" (a covershot of herself she thought made her look fat).

Uglier still were the revelations during the trial about how Rosie was run: G&J USA knowingly overstated circulation figures, especially for newsstand sales, sometimes by more than 100 per cent. The company "saw newsstand numbers as a fungible commodity to be tweaked to meet business and legal objectives", as The New York Times put it. Agencies were left anxious over whether their plans to buy ad pages in Rosie based on its readership rested on a foundation of mush.

Not only are media buyers likely to demand makegoods - free ad space - and cash rebates for what they lost, they'll probably question all G&J USA circulation figures. That's not a big leap considering that, even before the Rosie debacle, the company was caught overstating sales for YM, a magazine aimed at teenage girls.

Moreover, it's feared that other publishing companies now will be forced to jump through hoops to verify their claimed circulations. The case most likely "gave a black eye to the magazine industry" as a whole, Advertising Age reported in a front-page article, as well as casting aspersions on the ability of media agencies to make deals.

"We look like we were asleep at the switch," David Verklin, the chief executive of Carat North America, complained to Advertising Age. "The tide lowered all the boats."

As for O'Donnell, she's now fighting bad reviews and weak ticket sales for Taboo, the musical she's producing that's based on the London show about Leigh Bowery. O'Donnell is the sole investor, to the tune of $10 million, which buys a lot of Boy George music but not much box-office magic.

Anyone who thinks Madison Avenue is tough should try Broadway.

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