Martha Stewart has acquired her hugely successful Martha Stewart Living magazine and television businesses from Time Inc., folding both into a newly formed holding company for an ever-expanding array of cross-promoted properties.
The doyenne of home decorating is buying Martha Stewart Living Enterprises, including the magazine, syndicated TV show and a line of books published by Time Inc.-owned Oxmoor House, for an undisclosed sum.
Stewart is forming Martha Stewart Omnimedia, with separate publishing, television and merchandising units, and will serve as its chairman.
Time will get a minority stake --- less than 20% --- in the new entity, and continue to handle newsstand distribution of the magazine and fulfillment for that title and a mail-order business known as Martha by Mail.
The sale caps protracted negotiations between Stewart and Time about renewing the deal that created the magazine in 1991. Stewart has sought a firmer grip on the flagship title that has spawned a cottage industry of TV shows, newspaper columns and other tie-ins.
"Time Inc. is not a television company," Stewart told Daily Variety. "They're primarily interested in the printed word." With independence from Time Inc. "we can develop new companies that we weren't as free to do" and combine merchandising activities for the Stewart "brand" under one roof.
To fund the deal, Stewart no doubt will use proceeds from a lucrative new syndication deal with CBS-owned Eyemark Entertainment, which is converting her weekly series to five-day-a-week status this fall, cleared in 85% of U.S. homes. Stewart also has agreed to a series of CBS primetime specials and regular appearances on "This Morning" and the "48 Hours" newsmagazine.
But while Stewart's weekly series has been successful, it's the magazine that's the engine of the Stewart empire growth.
The title nearly doubled its ad revenues last year, up 97%, to $65.6 million, selling 855 ad pages, a 43% increase, according to Publishers Information Bureau, which has made Time Inc. loathe to part with the fastest-growing star of its publishing stable.
"Our association with Martha Stewart has been quite profitable," said Time Inc. CEO Don Logan, who in a statement called Stewart's empire a "successful and vibrant franchise."
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