Creole Flavored: MSLO Acquires Emeril Lagasse Biz, Reports Strong '07

Martha Stewart Living Omnimedia is capping its announcement of strong 2007 results with a new acquisition: the media businesses of Emeril Lagasse, the popular TV chef with an outsized personality who specializes in Creole cooking. The $50 million deal covers Lagasse's TV program, the "Essence of Emeril" on the Food Network, his cookbook series--12 volumes so far--his Web site, and his licensed cookware and food products, produced with All-Clad and Sara Lee. Lagasse will retain ownership and management of all his restaurants, as well as a charitable foundation.

The pairing may strike some as comical, bringing together the reserved New England doyenne and the ebullient, slightly messy Cajun chef. Susan Lyne, MSLO's president and CEO, acknowledged the difference, asserting that Emeril's brand will "complement our own."

Like MSLO, he already manages a multi-platform brand with plenty of expansion opportunities. Most importantly, he brings "cash flow levels that will contribute immediately to our performance."

MSLO is already delivering a strong performance with a 22% increase in revenues in the fourth quarter of 2007 compared to 2006, to $118.5 million. For the full year, revenues rose 14% to $327.9 million. Both increases were due largely to growth in publishing, merchandising, and Internet revenues. Publishing revenues grew 15% to $49.4 million in the fourth quarter, driven by a 30% increase in advertising revenues.

In the fourth quarter Martha Stewart Living saw ad pages increase 12%, Everyday Food 9%, and Body + Soul 8%. In light of 30% revenue growth, revenue grew faster than ad pages. Internet revenue grew 60% in the fourth quarter to $7.2 million, as page views increased 30%, 40% and 50% in October, November and December, respectively.

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