Few would dispute that Martha Stewart Living Omnimedia could use a little help right now. But former ABC executive Susan Lyne could face some tough challenges as the new president and CEO of the empire that Stewart built MSO announced Lyne's appointment and resignation of current CEO Sharon Patrick on Nov. 11. The news sparked some positive reaction from investors in after-hours trading, as they pushed up the stock almost 5%, to $19.50, about an hour after the announcement. Indeed, the stock has rallied of late, ever since its celebrity namesake began serving jail time. But the euphoria may be short-lived as investors begin to digest what MSO now faces -- and what it has lost with Patrick's departure.
THE BIG CHALLENGES. Lyne herself is a respected creative force, having played a hand in two of ABC's current hit shows -- Lost and Desperate Housewives, neither of which had aired before sagging ratings saw her leave under pressure in April as president of ABC Entertainment.
Prior to her TV stint, Lyne worked for director Francis Ford Coppola's alternative weekly, City, in San Francisco, was managing editor of New York's Village Voice, and founded Premiere magazine in 1987. An eloquent and well-liked figure in the glitzy world of Hollywood, she came to the Martha Stewart board in June.
The question is: What Lyne will bring to the mix as head of the beleaguered MSO? Its founder, currently serving five months in a West Virginia prison for lying to investigators probing her ImClone stock transactions, will no doubt remain the chief creative force. Not only does Stewart own the bulk of the outfit's shares, she has vowed to come back stronger next spring, when she will have completed her jail sentence. More important, perhaps, she remains the brand's central personality.