Days after the Huffington Post reported Bethenny Frankel only received $8.1 million for the sale of her Skinnygirl drink line, and not the widely reported $120 million, both Bethenny and Forbes are now firing back!
First Forbes is stating they stand by the $100 million figure. If you recall, the Bethenny Ever After star graced the cover of Forbes back in May during which they declared she sold the drink line for $100 mil — $20 mil less than the amount originally reported by The Hollywood Reporter.
So what exactly was the $8.1 mil figure about? Well according to a financial analyst, the $8.1 million is merely the value of the goodwill attributed to the brand.
“The $8.1 million was just the amount of intangible assets purchased in the Skinnygirl transaction, essentially the amount Beam paid for the Skinnygirl brand rights—not the total purchase price,” said analyst R.J. Hottovy to Forbes.
So how did Huffington Post’s Rob Shuter get it wrong? Well for starters the actual price Beam paid for Skinnygirl is missing from the 10-Q statement and Bethenny cannot publicly disclose the amount due to a confidential agreement. Beam is also refusing to disclose the amount and they can actually get away with doing that under accounting rules.
“We will continue to disclose accounting data as required to be included in financial filings,” said Beam Global spokeswoman Paula Erickson, “but do not expect that a black-and-white lump sum ‘purchase price’ figure will be made available. Suffice to say, this was not an $8.1 million acquisition.”
So the BIG question now is how much did Bethenny really receive for the sale of her drink line? According to Forbes, that figure is at least $39 million. See Beam listed $39 million in their financial disclosures for acquisitions made in the second quarter of 2011. And as financial analyst R.J. points out, the only acquisition the company made during that period was for the Skinnygirl Drinkline.
“The only deal they announced over that period was Skinnygirl,” said R.J. “This means [Beam] paid at least that much for Skinnygirl [during that period].” He goes on to add that there may be additional elements to the deal not accounted for or visible in company filings, including stock options that could yield Bethenny additional long-term returns.
In addition to the $39 million Bethenny likely received upfront, she also stands to earn up to an additional $25 million. The company’s financial statement revealed “the Company may be required to record contingent consideration in an amount not in excess of approximately $25 million.” That basically means Bethenny stands to earn up to an additional $25 million based on future sales, incentives, meeting high targets etc.
Bethenny herself confirmed this to Forbes stating she’d get “on-going back end”—payments based on how well Skinnygirl’s cocktails sold after Beam took control. Experts say Bethenny should be getting that $25 million as “sales of Skinnygirl have exceeded expectations for 2011 and that threshold will be met this year.”
According to Forbes, this brings “the value of the deal to at least $64 million in this year alone, without accounting for any further payments or other compensation for Frankel.” Bethenny adds, “The acquisition was structured with various potential payout levels based on sales of Skinnygirl products.”
Bethenny of course also fired back at critics. When asked about the reported $8.1 million figure, Bethenny said laughing: “Come on. That it could be the fastest growing booze brand on the market and have sold for that little is just preposterous… I’m going to be paying a hell of a lot more than $8.1 million in taxes.”
As for the Huffington Post, they have since retracted their original errornous report stating they “regret” it.
However, some things are still not adding up. For example, where did the $100 million figure come from? It appears Forbes can only put a $64 million figure on the deal and cannot account for the remaining $36 million. Yes, it’s clear Bethenny potentially stands to earn more, according to her, but it would have been nice if Forbes could further explain how exactly they were able to put a $36 mil figure on that potential income.
Other things that make you scratch your head is the fact that immediately following the Huffington Post’s report, Bethenny quickly removed the Forbes $100 million cover story from her website. Why remove the article if it’s accurate?
Also more odd, Forbes released the statement below to the Huffington Post before they ultimately decided to back Bethenny
and themselves on the issue -
“We’re taking this very seriously. We based our numbers at the time of reporting on solid sources. We’re aware of the new information and we’re looking into it right now,” Dan Bigman, Forbes executive editor stated. “We’re going to review all the information thoroughly and talk to Ms. Frankel before taking any steps. If there are any inaccuracies, we’ll correct them. If clarification is required, we’ll do so.”
As for Bethenny, she also tweeted: “Most people are morons. Stay tuned.” She later added, “Only listen to sources you trust. Irresponsible journalism is a waste of your time.” Bethenny also changed her Twitter profile picture to her Forbes cover. That cover is below.
Must say Bethenny should be giving thanks that this Huffington Post report came out just in time to distract the public from Lost-at-sea-gate!
Photo credit: Roger Wong/INFEvents.com
TELL US – THOUGHTS ON THE LATEST? SOMETHING FISHY ABOUT THE $100 MILLION FIGURE OR MUCH ADO ABOUT NOTHING?