Tensions are said to be flaring between Martha Stewart, the founder and non-executive chairman at Martha Stewart Living Omnimedia, and Lisa Gersh, president and CEO.
In the latest development on the brink of its earnings call — rescheduled for today from Wednesday due to superstorm Sandy — the company announced a dramatic restructuring that will shrink its print footprint as it tries to find a winning formula with digital deals with partners from Hulu to AOL, and from its TV deals.
Part of the restructuring will result in up to 70 people, about 12 percent of MSLO’s workforce, getting the ol’ heave-ho.
As Media Ink reported on Oct. 12, MSLO is trying to sell Whole Living.
Meredith, American Media and Rodale are among the potential suitors, sources said.
Not clear is whether a potential buyer would snap it up to keep it alive or whether an acquirer is just after the subscription base for its own titles.
Out of Whole Living’s total circulation of 760,000, about 648,776 are paid subscriptions — with another 65,830 coming from newsstand sales.
The company officially acknowledged the magazine is on the block and said it is “exiting Whole Living either via a sale or, if a sale is not completed, by folding its content into Martha Stewart Living…”
Whole Living was acquired in 2004 along with a related newsletter for about $6 million — when the company was scrambling to re-brand itself while the domestic diva was getting ready to be shipped off to federal prison for lying to federal investigators in the ImClone stock scandal.
The other magazine that grew out of that effort, the digest-sized Everyday Food, is also going to disappear as a standalone print title, the company revealed — but it will continue in a digital format.
The title, which has a circulation of 1,250,000, will now disappear from newsstands and appear only as a five times-a-year supplement to Martha Stewart Living.
On the TV front, the company also started a new PBS show, “Martha Stewart’s Cooking School.”
The company insisted in its announcement that it is pushing digital, mobile and video platforms. Toward that end, Stewart is doing the company’s first digital video series, “Countdown to Christmas,” — and the company unveiled the Martha Stewart Living Apple ITunes storefront app for iPad.
But Stewart also yearns for the spotlight that bigger TV exposure will bring.
The MSLO chairman is said to be unhappy that Gersh has not turned the company around faster. Its earlier goal of returning to profitability by the end of 2012 has been abandoned.
The company said that exiting the two magazines as standalone titles will save it between $33 million and $35 million a year.
Nevertheless, the news that MSLO is slashing its print footprint gave some solace to its battered stock.
The shares gained 2.1 percent yesterday, to $2.95 — but they are still down 33 percent this year.
Contract cracks
Already some cracks are beginning to appear within the Newspaper Guild ranks on whether it should support the latest contract offer from the New York Times — which was verbally agreed to only Sunday.
Although spokespersons for Times Publisher and Chairman Arthur Sulzberger Jr. and Newspaper Guild President William O’Meara were reluctant to reveal terms before an agreement is hammered out on paper, at least one journalist on the negotiations committee is already pushing membership to give the offer a big thumbs-down.
“The mediator asked that we not reveal any details of what was agreed, and I thought that made sense, so I won’t,” said Donald G. McNeil Jr., a science writer. “However, I see that the union immediately said that it ‘preserved a defined-benefit pension plan.’”
“I vehemently disagree with that claim,” said McNeil.
“And — without revealing any details — I think the settlement is appalling. It will make us fall even further behind inflation than we did with the last contract in 2003,” said McNeil. “I’m going to urge my fellow Guild members to vote not to ratify and to force us to negotiate a better one. That will mean getting much tougher with the company, and I hope they are prepared.”
He continued, “Over the last three years, the company’s managers have gotten 3 percent raises, plus bonuses that average about 20 percent of salary. Wait ’til you see what the company offered us.”
A Times spokeswoman declined to comment past the previous statement that it had an agreement “in concept.”
The Guild on its website said that it would get the agreement before members “in the next few days.”
It is believed the company is pushing to get a vote finalized before Nov. 15, because that would enable it to announce any potential savings in the fourth quarter — which is shaping up as a disappointing one for the Gray Lady.