Last Updated Jun 21, 2011 12:43 PM EDT
As Blackstone Advisory Partners invites tire-kickers to examine Martha Stewart Living Omnimedia (MSO)'s books, they will find an unprofitable company that is mostly failing to deal with the digital media age. On the plus side, there is a functional business somewhere within the mess that is Martha, it's just that breaking that news to the company's founder -- and persuading her that she may need to tighten her own belt a bit -- could be difficult. She owns voting control of the company's stock.
Stewart may be beloved as an adviser on cakes and scrapbooks, but her management track record over the last five years has not been a good thing. MSLO lost money every year since 2006, save 2007, when it made $10 million on revenues of $203 million. Revenues have slid ever since. Here's how much ad money has bailed out of the Stewart empire since 2008. The numbers are annual revenues from Stewart's various divisions:
- Print advertising
2008: $94.8 million
2010: $73.8 million
- Broadcast advertising
2008: $26.7 million
2010: $23.5 million
- Radio advertising:
2008: $7.5 million
2010: $3.5 million
2008: $57.8 million
2010: $42.8 million
- Digital advertising
2008: $14.4 million
2010: $21.4 million
Stewart the Sultan
Otherwise, things are looking up. Revenues rose across the board in Q1 2011, showing that there is some sign of life within the brand itself. If an acquirer or investor were to come on board, however, the most obvious place to ask for cuts is within management itself, which is currently a self-serving sultanate for Stewart and her family. Stewart's compensation was $6 million in 2010, of which almost half were gilded-cage perks:
- $2.5 million was a diva fee to license her name for her own company. Most founders whose names adorn their own companies don't take such a fee.
- $248,328 in "union fees" earned as talent on her own TV show.
- $119,039 for security.
- $81,330 for her personal assistants.
- $55,725 for a "weekend driver."
- $29,538 for a personal trainer.
- Unspecified sums for life insurance, a charitable contributions, and phone and internet services.
- Margaret Christiansen, Stewart's sister-in-law, a senior vice president who received $198,835 in compensation in 2010.
- Alexis Stewart, Stewart's daughter, who was paid $407,680 to host a TV show.
- Jennifer Koppelman Hutt, daughter of CEO Charles Koppelman, who received $350,675, also for hosting broadcast shows.
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