Cityfile: New York's Most Notable and Influential

• The cuts continue at Time Inc. Fortune Small Business was shuttered today. And as many as 500 employees may lose their jobs when all is said and done. Meanwhile, parent company Time Warner reported a drop in revenues and earnings in the third quarter, as expected. [NYT, WWD, AdAge, NYP]
• Profits were up at News Corp. thanks to its film, cable, and book units. [BN]
• The publisher of Marie Claire has jumped over to Vogue. [NYO]
• Fox News came out on top in the ratings with its election night coverage. CNN performed miserably, dropping down to fourth place. [NYT, Politico]
• WNET is giving employees off between Christmas and New Year's. It's not to be nice; it's designed to cut costs since the days off are unpaid. [Crain's]
• A theory as to why Tom McGeveran quit the Observer. [Daily Intel]
• Highlights from last weekend's Tribeca Film Festival, Doha edition. [Vulture] More

• Reed Elsevier is planning to sell a bunch of publications, including Broadcasting & Cable, Publishers Weekly and Multichannel News. [THR]
• Rodale's president and CEO, Steve Murphy, has resigned. [Gawker]
• Disney reports third-quarter profit fell 26 percent from the same quarter a year ago. Sony posted a loss for the quarter, as well. [AP, Reuters]
• Martha Stewart Living Omnimedia reported a loss, but beat estimates. [NYP]
• TLC's been having a pretty good year, in case you haven't heard. [LAT]
• Amy Poehler is coming back to SNL. Just part-time, though. [Vulture]
• Maria Bartiromo has locked in a new five-year contract with CNBC. [VF]
• Dustin "Screech" Diamond's tell-all memoir will be published, after all! [NYO]

• David Letterman's ratings have gone up thanks to his very public spat with Sarah Palin. So don't be the least bit surprised if it continues. [NYT]
• Ann Moore signed a new contract with Time Inc. that will keep her around through 2012; John Squires, meanwhile, has a new gig at the company. [NYP]
• Newsweek is cutting out an issue this summer. You can guess why. [WSJ]
• Martha Stewart Living Omnimedia's latest project? That would be something called "Martha University," which sounds horrifying, frankly. [PC]
• Michael Gross's new book isn't available at the New York Public Library and chances are Annette de la Renta had something to do with it. [NYO]
• Negotiations continue between the Boston Globe and union reps. "People briefed on the talks say a deal is close." Don't hold your breath. [NYT] More

• The New York Times Co. has reached a "tentative agreement" with its union to impose a 5 percent pay cut on employees through the end of the year. [NYP]
• Disney's ABC is joining Fox and NBC and taking a stake in Hulu. [AdAge]
• As expected, Time Warner said it may spin off AOL. But it may end up selling it, too. Either way, Gerald Levin, Dick Parsons and Steve Case will still be responsible for the worst merger in American corporate history. [NYT]
• Viacom reported that first quarter profit dropped 34 percent amid falling revenue at both its film and TV networks businesses. [AP]
• Related: Viacom boss Sumner Redstone is as senile as ever. At the Milken conference in Beverly Hills, he said he wouldn't comment on his competitors before lashing out at Ted Turner, Rupert Murdoch, and Jay Leno. [THR] More

• The New York Times Company reported a first-quarter loss of $74.5 million today, as advertising revenue plunged by more than 28 percent. [NYT]
• Martha Stewart Living Omnimedia's Wenda Harris Millard is stepping down as the company's co-CEO and president. [Crain's]
• One magazine that hasn't been crippled by the recession: Hearst's Food Network Magazine, which is now ramping up circulation. [AdAge]
• What's former Condé Nast star James Truman up to these days? Among other things, he's working on the in-room magazine for Ritz-Carlton. [Portfolio]
• Washingtonian magazine has a shirtless pic of Obama on the cover. [WM]More

Martha Wins, Martha's Shareholders Not as Lucky | Martha Stewart Living Omnimedia has posted a loss the last four out of five years and the stock is now hovering at $3 a share. But you didn't expect any of that to impact Martha's own compensation package, did you? The founder of the now-struggling media company just sealed a new three-year contract that will earn her at least $2 million a year for the next three years, according to a filing with the SEC. She'll also earn a bonus of as much as $1.5 million for each of those years, plus receive a one-time "retention incentive" payment of $3 million. Oh, yea, and then there's that company-funded home delivery and backup power system at her house, which isn't bad either. [WSJ]

• Is Heidi Klum pregnant with her fourth kid? That appears to be the case, since sketches of a gown she's planning to wear in a future Project Runway episode have made "room for a bump." [MSNBC]
• Are you a disgraced sports star or politician? Congrats: You're getting a reality TV show! Rod Blagojevich has signed on to appear in NBC's I'm a Celebrity ... Get Me Out of Here, assuming a judge lets him go to Costa Rica for the taping. Meanwhile, Michael Vick is reportedly in talks to create a reality show of his own, one that will document his attempts to "make amends for his past." Your turn, Spitzer! [THR, NYP, THR]
• Looks like Barbara Bush and boyfriend Jay Blount won't be tying the knot in Kennebunkport this summer after all. And here we were hoping for both a Bush and Clinton family wedding the same month. [People]
• Dina Lohan was spotted dropping Lindsay off outside a club in LA on Monday night. Because, clearly, that's what good mothers do. [OK!, TMZ]
• That big Michael Jackson memorabilia auction? It ain't happening. [Reuters]More

Martha's Fortress Must Be Defended | Don't even think about turning up at Martha Stewart's house without an invitation, or cutting the power lines to her house in an attempt to force her out into the open. In a filing with the Securities and Exchange Commission, Martha Stewart Omnimedia disclosed that it considers a home security system for Martha's estate as a business expense, and also pays for a "backup power system." Now you know! [WWD]

• Former Illinois Governor Rod Blagojevich has landed a six-figure advance to write a book about "his rise and fall, and the dark side of politics." [LAT]
• CBS chief Les Moonves says he no longer has any plans to merge the company's news operations with Time Warner's CNN. [B&C]
• Martha Stewart Living is "broadening its editorial focus" to "beauty, travel and fashion" in order to appeal to advertisers. [Mediaweek]
• Jane Velez-Mitchell's show on Headline News has been doing well. [NYT]
• The Philly Daily News will be folded into the Philadelphia Inquirer. [Gawker]
• Thomson Reuters is launching a new video-on-demand service. [NYT]
• Arena, the 22-year-old British men's style magazine, is no more. [WWD]

It looks like Martha Stewart won't be using a Turbochef oven when she settles into her Greenwich kitchen this evening to bake her usual batch of 17 apple pies. On Tuesday, Martha Stewart Living Omnimedia slapped Turbochef with a lawsuit for allegedly reneging on a deal to hand over $3 million in Turbochef stock and $5 million in cash in exchange for Martha promoting the line of stoves on both her and Emeril Lagasse's TV programs. (Martha bought out Emeril last year.) MSLO's lawyers claim Martha followed through on her end—and it appears she once had a cozy relationship with the Turbochef folks—but the relationshop later soured and now Martha is asking for $15 million in damages. Let's all hope that MSLO prevails, so the company can finally invest in some much-needed office decorations. The full lawsuit is after the jump.More

• The broadcast of Super Bowl XLIII generated solid results for NBC, even though ratings were down 6% from last year. [THR]
• Super Bowl commercial hits and misses. [AdAge, NYT, AdWeek, AdAge]
• NBC reports its Super Bowl spots generated $206 million. [B&C]
• A last-minute deal will allow David Pecker to keep AMI out of bankruptcy and he'll get to keep his job. But he'll now have a new board to deal with. [NYP]
• Michael Boodro is out as editor of Martha Stewart Living. [NYP]
• Is Vibe in trouble? [Gawker]
• David Carr on the problems plaguing Condé Nast. [NYT]
• Fox's Taken was No. 1 at the box office this weekend. [THR]

• Martha Stewart has sold a third of her shares in her eponymous media company. But she's still as anal as ever around the office. [NYP, Gawker]
• Bill Kristol's New York Times column has come to an end. [NYT]
• Fashion and beauty magazines will see a 22 percent decline in advertising pages during the first three months of the year. [WWD]
• Doubledown Media, the publisher of Trader, is reportedly up for sale. [NYP]
• Conde Nast is reorganizing its web division. [MW] 
• Moody's has downgraded New York Times Co. debt to junk status. [NYP]
• A long Q&A between Lesley Stahl and Rachel Maddow. [Wow]
• Sundance ended yesterday without a big sale. [NYT]
• Once again, Paul Blart: Mall Cop was No. 1 at the box office. [THR]

♦  Details on the layoffs and management changes at Time Inc. [NYP]
♦  More on the demise of Maer Roshan's Radar and its God-awful TMZ-like reincarnation. [NYO, HuffPo]
♦  Fox News has apologized for putting a racist and anti-Semite on the air. [MM]
♦  Noted media expert (and former basketball player) Charles Barkley thinks Fox News is "corrupt." [B&C]
♦  Barack Obama's 30-minute infomercial airs tonight. [AdAge, Politico]
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She's only been at Martha Stewart Living Omnimedia for four months, but it looks like co-CEO Wenda Harris Millard might already be clashing with the domestic doyenne herself. Although Millard calls the friction a "healthy debate," insiders are suggesting it's only a matter of time before she leaves MSLO's well-decorated confines and heads back to the online world, where she was previously the chief sales officer for Yahoo!. So what exactly did Wenda do to unleash Martha's wrath? She apparently prefers to delegate tasks, whereas control-freak Martha wants things done her way, which involves digging in and getting her hands dirty. It's an ethos Wenda really would have seen coming if she'd ever watched any of Martha's gardening segments on TV. 

It's actually quite incredible that Martha Stewart's daughter Alexis isn't more famous than she is, given that she possesses the two qualities most likely to lead to major media success: a famous parent and no apparent limits to her oversharing. On her Sirius radio show, she has, according to a New York magazine profile, discussed: "The breast lift, the Botox, the in vitro shots to try to get pregnant, the "betweeny" wax she favors over the Brazilian, the recurrent sexual fantasies involving Scott Bakula, the past dabbling in lesbianism..." and so on.   More