Meredith Takes Over Business Ops for Martha Stewart Living
In licensing deal, editorial and content creation will remain with MSLO.
Meredith Corp. will be taking over the business operation of Martha Stewart Living through a 10-year licensing agreement, the companies announced today.
Terms include having Meredith take over all non-editorial functions of the brand—ad sales, marketing, circulation, distribution and production. The agreement also folds in sales and marketing of Marthastewart.com and Marthastewartweddings.com.
Martha Stewart Living editorial staff will remain in place, but Meredith will be bringing over some sales and marketing staff from MSLO, including head of advertising Amy Wilkins.
The brands will be housed under Christine Guilfoyle, senior vice president, group publisher of Meredith’s Women’s Group. Wilkins held publisher roles at Meredith prior to joining MSLO.
But not everyone will be transitioned. While MSLO says operating income is expected to improve by $10-$15 million as a result of the deal, there will be a restructuring charge of approximately $2-$3 million due mostly to severance.
The deal is further recognition that the publishing group doesn’t quite fit in with MSLO’s increased focus on retail and merchandising. Publishing revenues were down $8 million in the first half compared to 2013, according to company financials. Operating losses were improving though, a $4.6 million loss in the first half compared to a $6.7 million loss last year.
"Fundamentally, we are a content and design creation company with a peerless and globally recognized brand," says MSLO CEO Dan Dienst. "This transaction enables us to remain focused on our core competencies, permitting our Company’s resources, and management’s attention, to be centered on driving growth in our merchandise vertical over the coming months and years."
The arrangement, which includes the U.S. and Canadian editions, takes effect November 1, 2014 and distribution of the magazines by Meredith will start with the February 2015 issue of Martha Stewart Living and the winter 2014 issue of Martha Stewart’s Real Weddings.
Meredith also has rights to MSL’s digital video library, and the company plans on adding that content to its own scaled up video content and sales efforts.
Martha Stewart Living is published 10 times a year with a rate base of 2 million, says the company. Weddings is published quarterly. The digital assets average 8 million monthly uniques, per comScore.