Current Season Runs Through September

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NEW YORK ( -- Martha Stewart Living Omnimedia is suspending production of its flagship syndicated TV show, Martha Stewart Living, following this season, the company announced today.

The company said the move will result in a restructuring charge of up to $2 million in the second quarter of this year. A spokeswoman said around 40 jobs will be cut from the TV division. That's slightly more than half of the division's total headcount, and slightly more than 7% of what Executive Vice President James Follo told analysts was MSLO's total headcount in a conference call this month.

The current season runs through September. Ratings and reach of the show, which is syndicated by King World Productions, have been severely affected by Martha Stewart's own legal woes, with affiliates shifting it to late-night slots or dropping it entirely. In the first quarter of this year, TV revenues were off 39.4% compared to the previous year, and the unit posted an operating loss of $1.9 million.

The spokeswoman said MSLO is "actively pursuing" new opportunities for some programming based around the flagship show's Everyday Food segments.

The company's founder and public face, Ms. Stewart, was found guilty earlier this year on charges of lying to investigators who were looking into her sale of ImClone stock. Her sentencing is June 17. Legal experts, citing federal sentencing guidelines, have suggested she'll receive slightly more than a year in prison.

Her travails have severely impacted the company. Its magazine, also called Martha Stewart Living -- far and away the largest revenue contributor to the company's largest operating unit -- has posted several quarters of 30% ad page declines, and in the call with analysts Mr. Follo said the fall would worsen to a 50% loss in the second quarter.

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