Susan Lyne's Recipe for Success

Former ABC chief is determined to restore Martha Stewart's empire
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Susan Lyne is back with a vengeance. Nine months ago, Disney cleaned house at ABC—and Lyne, who had championed the development of Desperate Housewives and Lost, was axed as entertainment president. Now she faces one of the toughest challenges in corporate America: turning around Martha Stewart Living Omnimedia with limited assistance from the company's founder, who will be released from prison in March. Although Stewart remains under house arrest for five months following her discharge, she intends to help Lyne run the company from her home in Westchester County, N.Y.

Lyne, who joined Omnimedia's board in June, was tapped as CEO in November. After advertisers and stations bailed during Stewart's court battles, Omnimedia's stock plummeted. (Omnimedia stock has jumped 57% since Lyne became CEO in November and 200% since she joined the board in June.) Still, she faces a Herculean task: to return the company to profitability. To do it, she'll need to win the trust of advertisers, viewers and shareholders. Yet overseeing Omnimedia is simply the latest chapter in Lyne's 25-year career in publishing, television and film. The veteran exec ran The Village Voice, created Premiere magazine and held several key positions at Disney during her eight-year tenure. Lyne spoke with B&C's Jim Finkle about Martha Stewart's next foray into TV, the launch of Everyday Food on PBS and the real impact of Desperate Housewives.


You're getting ready to launch a new one-hour syndicated homemaking show Martha Stewart is developing with help from NBC Universal and Mark Burnett. What can you tell us about it?

We certainly have a lot of specific ideas. But until Martha gets out [of prison] and can play with us more, it's hard to be definitive.


How will this show differ from previous Martha Stewart ventures?

We will have a live audience in the studio that can actually be part of some of the segments. [That same spontaneity] will show up in segments when we're on the road and able to include real people who love all the things Martha does on camera. [The purpose of] the magazine Martha Stewart Living and the whole thrust of this company is to show people how to do great things they never expected they could.


Will you screen participants to make sure they'll be as perfect as Martha?

She's previously done some shows where she brings on celebrities. They're fun because of the interaction. Some of them are all thumbs. If you see somebody else take a stab at something and maybe not pulling it off as perfectly as Martha, then it demystifies the process. But they still learn and have a great time doing it.


How often do you speak to Martha?

I've been to Alderson, W.Va., three times since she went down there. I talk to her occasionally by telephone—she has a limited number of minutes to use during the month. She calls to check in and see how everything is going. It's either reasonably late at night or very early in the morning, because her days are filled with work.


She uses a pay phone?

Yes.


Given the circumstances under which you were hired, have you had much face time with Martha Stewart?

I went on the board of directors in June and have spent a fair amount of time with her. But we're talking about hours over a certain number of days. We're not talking about weeks at a time. Still, it's been enough to get a sense of what her hopes are for the company.


Martha Stewart wasn't involved in the decision to hire you as CEO.

Correct.


But she owns 60% of the company. That makes her the big boss. Are you nervous about reporting to somebody who wasn't involved in hiring you?

I have enormous respect for her. I am eager to work side by side with her. What I see for the company is in keeping with what Martha sees and hopes for. In any new job, you try to figure out how to work with a new cast of characters. I can't wait to have her back. There is a hole here without her.


What does market research tell you about audience attitudes toward Martha since her legal problems surfaced?

We are seeing enormous support and interest in Martha from a surprisingly diverse group of demographics. There were a lot of people out there who didn't know Martha or thought Martha wasn't for them. They've become genuinely interested in her through what's been a human drama. So our expectation is that there will be enormous interest in the show. It's up to all of us to make sure that it is as great as it can be.


Omnimedia's Everyday Food launched this month on PBS. The show is a companion to the magazine. Why public television?

It's a quality broadcaster. We knew they'd take good care of the show and grow it well. It gives us a chance to grow a TV show, along with a new magazine.


What can you tell us about the prime time reality show Martha is working on with Mark Burnett?

That's a project Martha and Mark are doing. It is separate from the company's new show. I am not involved. It was really through their meetings that the two decided they wanted to collaborate on a new syndicated reality show.


Were you shocked that Disney fired you? Some people were expecting you to get a promotion, not a pink slip.

I was surprised, but I understood. They felt they needed to make a larger change then they anticipated.


You oversaw production of Desperate Housewives and Lost, which have been key to ABC's turnaround.

I love the shows. I think they've done a brilliant job scheduling them and promoting them. They have obviously allowed the creators of both shows to make the program they sold to us. I couldn't be happier for them. I have many friends at ABC.


Do you talk with Steve McPherson, the new ABC entertainment president?

Not really. I've talked to him since I left. Steve was at the studio. He did not report to me.


Will the success of Housewives and Lost change the way networks look at program development?

Their success gives development execs permission to try something different. There is a much better chance that you'll see more interesting original programming next fall.

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