Less than a day after Meredith Corp. said it had an “agreement in principle” to purchase Every Day with Rachael Ray from Reader’s Digest Association, executives at RDA are throwing cold water on the deal.
RDA CEO Robert Guth insisted today that the Meredith announcement was “premature” and cautioned that discussions are ongoing.
The dueling announcements looked odd from day one and seem to represent the deepening rift between TV celebrity chef Rachael Ray and her publishing partner, RDA.
The contract between the 43-year-old TV personality’s Watch Entertainment and RDA to publish the magazine has another 18 months to run.
But Ray became infuriated with RDA management when they blamed the company’s overall ad and circulation woes and its precarious financial state on weakness at her title and Web sites, sources said.
The words were barely spoken when Ray began exploring a way out of the contract. It was her team that found Meredith. And while Ray and Watch Entertainment have apparently come to terms with Meredith on how the new joint venture for the magazine will work, Meredith and RDA apparently aren’t finished.
Yesterday, RDA announced only that it was going to sell EDWRR as part of its plan to divest non-core assets. The company said Editor-in-Chief Liz Vaccarielo was going to stay with RDA as its new chief content officer, while the global editor-in-chief, Peggy Northrop, saw her role reduced to a consultant.
The RDA announcement contained no hint that it had a buyer lined up.
News of the sale of EDWRR came from Meredith a few hours later — which announced an “agreement in principle” to purchase the struggling food title. It said the deal is expected to close by Dec. 31.
But today, RDA’s Guth was raining on Meredith’s Rachael Ray parade, saying, “We believe it is premature to announce an agreement in principle between Meredith and RDA.”
Guth, in a memo that went out to RDA employees this morning, did acknowledge that there are serious talks underway.
“I am pleased to report that Meredith Corp. is in discussions with us to purchase Every Day with Rachael Ray. Clearly they are excited about the potential transaction, and so are we, however, we believe it is premature to announce an agreement in principle between Meredith and RDA.
“We are making great progress in our discussions and hope to have a definitive agreement soon. I will keep you updated as our discussions move forward.”
“While no contract has been signed at this point, all parties have agreed to work toward a mutually beneficial outcome that will result in Meredith acquiring the assets from RDA and executing a licensing deal with Rachael Ray for operation of Everyday with Rachael Ray magazine and its related content and digital assets,” a Meredith spokesperson said in a statement.
A spokesman for Rachael Ray had yet to respond to the latest development.