Big Bucks for Bam!

If you're still feeling sorry for Emeril Lagasse because he lost his prime time TV gig at the Food Network, don't. Publicly traded Martha Stewart Living Omnimedia, Inc. will pay Lagasse a cool $50 million for, in the company's words, “the assets related to the business of Emeril Lagasse, other than the restaurant and foundation-related assets, in a transaction that pairs one of the biggest brands in food-related content with the established leader in ‘how-to’ lifestyle information and content.”

Translation: Emeril still controls and operates his 11 restaurants, Martha Stewart Living Omnimedia (MSLO) owns the rights to everything else. That includes The Essence of Emeril and syndicated episodes of Emeril Live! from the Food Network; the chef's food correspondent segments on ABC's Good Morning America; his 12 cookbooks; website www.emerils.com; his licensed kitchen products; and his various lines of food products.

What matters most here to everyone else is that this transaction puts a price on the noncooking activities of chefs. In Emeril's case, his businesses generated $14 million in 2007. The MSLO people expect EBITDA earnings from them to hit $8 million in 2008. So MSLO values them at slightly more than six times forward EBITDA earnings.

What did MSLO see in Emeril that they liked? President Susan Lyne says that Emeril's assets “offer multi-platform expansion opportunities.” She characterized Emeril's business as “high margin and asset light.”

Other than enjoying the money, what happens to Emeril? He has a 10-year employment contract with MSLO. His payout could rise to $70 million if certain financial goals are met in the coming years.