Gruner + Jahr USA has finally found a replacement for its ousted CEO, Dan Brewster – but new boss Russell Denson has his work cut out for him in winning over Madison Avenue.
Denson has a low profile among ad execs. He most recently was president of Reiman Publications, which is famous for running profitable advertising-free magazines aimed at subscribers in the heartland.
Earlier, he was president and CEO of Weider Publications.
At Gruner + Jahr, one of his chief tasks is going to be boosting employee morale – which plummeted in the wake of the Rosie O’Donnell trial – and restoring the ad community’s confidence in the company.
At the Rosie trial the company admitted it fudged circulation estimates at Rosie magazine, a makeover of the old McCall’s.
The company was also forced to admit two major circulation overstatements on another title: teen-oriented YM.
“There are problems; I am aware of them,” Denson said. “One of the first things I do will be to reach out to the internal community of employees and the external community of advertisers.”
He also has fiscal woes. Sources say only three of the magazines in the company, which counts the profitable Family Circle as its flagship, are making money.
Axel Ganz, the Gruner + Jahr International chief who made the new CEO pick, confirmed that only three magazines made money but declined to identify which.
He said the company had revenues of less than $400 million and a “two-digit” profit – meaning somewhere north of $10 million.
G + J is also embroiled in a nasty lawsuit with former CEO Brewster over his severance. Ganz declined to comment on the suit.
Ganz did, however, dismiss two current rumors: that the money-bleeding Fast Company might be folded into small business title Inc., and that YM would be sold or shut down.
“We have no plans to close anything,” he said. On the other hand, the company has no plans to launch any new titles.
Most recently the company began staffing up to bring its European celebrity weekly Gala to the U.S. – but then suddenly aborted the project.
“That is not something we could do without a full-time CEO in place,” said Ganz, who said he’d still like to explore the possibility at a later date.
And he vehemently denied rumors that the company is sprucing itself up so majority owner Bertelsmann can sell it off.
“That is bull – – – -,” said Ganz – indicating he has picked up a few Americanisms in his four month stint as interim CEO of the U.S. unit.