After losing $30 million in publishing over the past two years, Martha Stewart is licensing her magazine empire to Meredith Corp. under a 10-year deal.
The arrangement will enable the company to concentrate on its more successful merchandising arm while letting the much larger Meredith, which owns 14 magazines and 15 TV stations, take over the publishing and Web sites in the US and Canada.
Martha Stewart Living Omnimedia will keep its editorial staff and provide the content to Meredith to produce both Martha Stewart Living and Martha Stewart Living Weddings under terms that take effect Nov. 1. Meredith will handle sales, marketing, circulation and production for the publications.
Terms were not disclosed, but MSLO said it was expected to be "immediately accretive to earnings." The company said it would boost annual operating income by as much as $10 million to $15 million annually. In the first half of the year, publishing lost $5.5 million.
Sources said as many as 30 people will be laid off. The company would not confirm the number but acknowledged it would take a restructuring charge of $2 million to $3 million to cover the severance.
"This partnership marks a significant milestone in the continued evolution of our company," said MSLO Chief Executive Daniel Dienst, a former scrap-metals executive who took over as CEO 11 months ago.
"Our award-winning content coupled with Meredith's much larger size and sales expertise, expands our brands reach while significantly and immediately improving our bottom line."
This is not the first time Meredith has come to the rescue of a struggling eponymous magazine. In 2011, it took over Everyday with Rachael Ray from Reader's Digest.
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