Paula Deen Bad Publicity Garnered $75 Million

Paula Deen
With fresh capital investment from Najafi Media worth over $75 million, this week TV’s elder belle of Southern cooking, Paula Deen, proved there is no such thing as bad publicity. The consumer content and distribution company, with holdings worth approximately $2 billion, announced that it will partner with Deen to grow Paula Deen Ventures (PDV).

PDV is the parent for Deen’s various Paula Deen branded companies for marketing and merchandising foods, media, restaurants, cookware and home products. PDV has appointed Steven Nanula to be its new Chief Executive Officer. Previously, Nanula was chief executive for the Paula Deen Food Company.

Jahn Najafi is the Chief Executive Officer of the Najafi Company, parent of Najafi Media, and owner of BMG Music Service. He is also Vice Chairman of the Phoenix Suns and a member of the Board of Governors of the National Basketball Association.

Last summer a firestorm of erupted around Deen, a longtime Food Network favorite. The fuse was a leaked transcript of her deposition testimony in lawsuit filed by a former employee against Deen, her brother Bubba Hiers and a restaurant they co-own, Uncle Bubba’s Seafood and Oyster House. The source of the leaked deposition transcript is unclear. But in the midst of the media conflagration, numerous companies with whom she had endorsement agreements gave her the old heave-ho, including the Food Network, Walmart, Random House, Home Depot and Novo Nordisk. Despite the fact that Deen’s 15th cookbook for Random House was number one in pre-sales on Amazon, the publishing house cancelled its October 2013 release. The first 14 books she authored for them sold over 8 million copies.

For the companies that stayed true to her, Paul Deen’s bad publicity yielded enormous growth and garnered her a $75 to $100 million cash infusion from Phoenix, Arizona based Najafi Media. Paula Deen Magazine experienced a 40 percent increase in subscriptions and sales of Paula Deen Springer Mountain Chickens grew by 35 percent.

The lawsuit, which was filed by Lisa Jackson, a former manager of Uncle Bubba’s Seafood and Oyster House, alleged that Jackson had suffered from offensive employment practices that were unfair to African American workers. In August of last year, a federal judge dismissed the unfair employment practices claim on the grounds that Jackson is white. Jackson had also alleged sexual harassment, a claim the judge let stand. However, the case was settled and ended in a dismissal with prejudice.

Through it all, Deen’s loyal fans rallied to her support. In honor of her famous love of butter, a butter wrapper letter writing campaign was launched. Joyce Dixon, content administrator for the Facebook page “We Support Paula Deen,” estimates that approximately 200,000 wrapper letters were sent to the Food Network by fans angry over Deen’s dismissal. The Facebook book page has over 600,000 “likes.”

There are murmurs of a new television deal, but neither Deen nor Nanula have shared any details. However, one network does appear to be dropping hints. In his column on ABCnews.com, Graham Stanley Advertising CEO, Larry Woodard, recently commented about how Deen’s authentic culinary expertise resonates with her fans. “The American public,” he wrote, “Loves the comeback story.” Woodard believes Americans love to forgive their celebrities. Their mistakes, he says, humanize them.

Deen expressed great confidence in her new team and her fans, “whose love and support,” she said, “have built my brands.” Despite, or perhaps because of, 2013’s bad publicity and other rough waters, Paul Deen garnered over $75 million to grow her media and merchandising empire.

By Melissa Roddy

Sources
Financial Content
Najafi.com
ABCNews.com

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