Paula Deen ... The "Rest of the Story"

For those of us old enough to remember, now deceased radio broadcaster commentator Paul Harvey used to always end his show by telling his listeners about "the rest of the story."

So let's try that approach with what Paula Deen did and didn't do, and the biggest reason why her TV show on the Food Network will be seen no more. The show's sponsors have had enough.

In sum, the decision is just about business and not her racist or non-racist views, as the case may be. And that explanation is good enough for me, even though it makes the story unexciting.

Paula Deen's Other Problem: Stale Ratings has the "rest of the story" for us:

 

Paula Deen's show ran 11 years.

"Paula Deen's future with the Food Network was in doubt even before a controversy over her use of racial slurs erupted, say people familiar with the situation, a reflection of changing tastes in food television.

For several weeks before the controversy blew up last week, Ms. Deen's agent had been negotiating with the Food Network to extend her contract, which ends June 30, the people said. One issue complicating the negotiations: her ratings had slid substantially over the past season.

"Things were not going as planned," said one person familiar with the negotiations, noting that an unresolved contract extension so late in the game was unusual.

Ms. Deen's 11-year run with the Food Network came to a very public end on Friday, just two days after reports widely circulated that she admitted to using the "n-word" in the past and overseeing a workplace where racial jokes were told.

She made the admission in a deposition for a racial- and sexual-harassment suit filed by a former employee at the restaurant she owned with her brother. Ms. Deen posted a videotaped apology on YouTube on Friday.

The Food Network . . . didn't cite a reason for its decision to drop her. But people close to the show and the food-television industry say the decision comes as the kind of "dump and stir" instructional food shows in which Ms. Deen and others, like Martha Stewart, specialized have fallen out of fashion. . . .

Ratings for Ms. Deen's show "Paula's Best Dishes" were down 15% in total viewers—and 22% in the 18-49 demographic that advertisers care most about—for the 2012-13 season, compared with last season, according to Nielsen ratings provided by Horizon Media.

"Her numbers are down," said Brad Adgate, research director at Horizon Media. "She represented in many ways a bygone era.". . .

The channel's top-rated shows for the 2012-13 season included "Food Network Star," "Chopped," "Next Iron Chef," "Worst Cooks," and "Great Food Truck Race," "Rachael Vs. Guy" and "Restaurant Impossible"—every one of which had some kind of competitive or reality-show angle. At its "upfront" advertiser presentations this spring, it presented 16 new shows, from "Food Court Wars" to "Extreme Tupperware Ladies," none of which simply aimed to teach viewers how to cook.

That is a departure from the Food Network's early days, when chefs like Emeril Lagasse, Rachael Ray and Ms. Deen combined big personalities with the kind of how-to format that fans of Julia Child might still recognize.

Beyond the changing programming style, analysts said Ms. Deen's ratings were hurt by revelations last year that she had been diagnosed with Type 2 diabetes shortly before she emerged as a paid spokeswoman for Novo Nordisk, a Danish firm that makes diabetes drugs. The revelation prompted a public outcry claiming that Ms. Deen had been profiting from recipes for the kinds of high-calorie foods known to contribute to the disease while withholding disclosure of her diagnosis, and then sought to profit from diabetes medication. . . .

"She lost favorability around the whole diabetes thing," said Billie Gold, vice president of research and programming at media buyer Carat. "She lost audience around then as well."

After peaking in 2011, ratings for "Paula's Best Dishes" began to slide in 2012 ....

As ratings declined, the cost of Ms. Deen's show became too high for the network to support, according to people familiar with the matter, particularly as the network itself faced prime-time ratings declines of 17% in the target demographic and 15% in households for the 2012-13 season . . . .

Forbes magazine listed Ms. Deen as the fourth-highest-earning celebrity chef last year, with estimated earnings of $17 million. People familiar with Ms. Deen's business, which includes cookbooks, a magazine, restaurants and licensing deals, say the Food Network contributed only a fraction of her income.

So far, most of Ms. Deen's business relationships seem to be holding, though pork producer Smithfield Foods Inc. dropped her as a spokeswoman on Monday. Sears Holdings Corp., which sells Paula Deen-branded cookware, said on Monday it was "currently exploring next steps as it pertains to Ms. Deen's products.""

Summing Up

I confess. I didn't know who Paula Deen was until the flap developed and became big news this week.

Thus, I never watched her show.

But the creative destruction of free market competition appears to be the real reason behind her downfall. If that's the case, look for more sponsorship fallout in the days and weeks to come.

In simple terms, it appears that fewer people were watching her cooking show lately, and the sponsors therefore decided to take their money and go elsewhere.

That's the way the free market works. Customers choose and sellers and sponsors respond appropriately.

In business matters, customers matter most. That's my take.

It's not at all like the way our monopolistic and elitist government knows best gang operates.

As Paul Harvey would say at the end of his show, "Good Day!"

Thanks. Bob.