Martha Stewart Financing an Empire Before and After a Scandal Free Essay Example, 3500 words

According to the research findings, one of the financial problems that Stewart faced in trying to convince Time Warner to invest deeper into her enterprise and to let her company expand under their umbrella was that while Martha Stewart Enterprises was bringing in over 100 million dollars each year, it only had a cash flow of around 3 million dollars. The net worth of Martha Stewart Enterprises was roughly 85 million dollars and despite claims of only having 3 million dollars in cash flow, the company was bringing in a total of around 50 million dollars per year for Time Warner. Stewart and Patrick reportedly went to ten banks, all of whom either denied her or wanted a significant amount of equity from the company, which would put her roughly back into the same position she was in with Time Warner. Stewart had a relatively small contract with K-Mart which paid her 200,000 dollars per year to act as a spokesperson for the company. This arrangement, which had lasted for ten years, was up for renewal and in this Stewart and Patrick saw an opportunity. We will write a custom essay sample on Martha Stewart: Financing an Empire Before and After a Scandal or any topic specifically for you Only $17.96 $11.86/pageorder now Meanwhile, according to Prudhomme, Stewart began a campaign designed to make parting with her a desirable plan for Time Warner. She began to make increasing demands for perks in regards to her position, including benefits such as a chauffeur and a very large clothing allowance. In addition, she demanded that she be entitled to 40% of the equity in Martha Stewart Enterprises. Stewart had been sorely underestimated for her ambitions and her desires to expand. Through negative relationship negotiation with the intent of making her an undesirable partner with Time Warner, she set the stage for the buyout that she intended. Meanwhile, the internet boom was reaching unimaginable heights in its success and Stewart was prepared to launch her enterprises into the virtual world. Stewart negotiated a deal with K-Mart to fund her buy out, along with private funds of her own and that Patrick would contribute to funding the buyout.