The Big Flop - Martha Stewart Prison Living with Matt Friend and Nicole DuBois | 63

Episode Date: November 25, 2024

Martha Stewart used her oh-so-perfect cooking, gardening, and decorating skills to create one of the most valuable brands in the world. A guru, an icon, a billionaire: she had it all. That is, until an insider trading scandal spun her business into a death spiral and Martha went from decorating mansions to sprucing up "Camp Cupcake."Matt Friend (Friend in High Places, The Simpsons) and Nicole DuBois (NickyDoobs, Magic Carpet Rides) join Misha to get the inside scoop on Martha Stewart’s insider trading scandal ALT: to set the table for a talk about Martha Stewart’s insider trading scandalFollow The Big Flop on the Wondery app or wherever you get your podcasts. You can listen to The Big Flop early and ad-free on Wondery+. Join Wondery+ in the Wondery app or on Apple Podcasts.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wondery Plus subscribers can listen to The Big Flop early and ad free. Join Wondery Plus in the Wondery app or on Apple podcasts. Martha Stewart is fully reclined, eyes closed, in a seat on her private jet. Her plane is refueling before it takes off for Mexico. Martha's finally taking a well-deserved vacation. Though when you're Martha Stewart, the queen of domestic perfection, and billionaire CEO of your own lifestyle company,

you're never fully off. Martha is heading to a luxury resort called Las Ventanas El Paraiso. And you better believe that the whole time she's there, she'll be making sure everything meets her exacting standards. Every meal, every room decoration, every grain of sand on the beach had better be just right. Martha's about to drift off when she's jolted awake by her phone.

Her stockbroker's on the line. Martha picks up on the first ring. She's not the kind of person to let vacation get in the way of business. He's got a tip for her. A stock she owns is going to take a big hit in just 24 hours. If Martha sells before then, she'll avoid a massive loss. She hangs up. What luck! Martha's not surprised. Everything she sets her mind to turns out perfect, whether it's a Thanksgiving centerpiece or a little insider trading. Good thing stripes are in this season.

everything stripes are in this season. Martha Stewart is the definition of American domesticity. She is quote, target of a criminal investigation. Today is a shameful day. A federal judge sentenced Stewart to five months in prison. From Wondery and Atwill Media, this is The Big Flop, where we chronicle the greatest flubs, fails, and blunders of all time. I'm your host, Misha Brown, social media superstar who's always looking to insider trade your perfect

mashed potato recipe at Don't Cross a Gay Man. And today we're talking about Martha Stewart's prison era. His name is Dexter Morgan, but you know him as Dexter, and nobody knows his beginnings. Enter to win a pair of tickets to the screening of the Paramount Plus exclusive series, Dexter Original Sin, on December 12th. Hosted by me, Rick Campanelli. Enter at chfi.com. From student to avenging serial killer, you never forget your first crime.

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Constantcontact.ca. contact.ca for your free trial. Constantcontact.ca. Everybody, I'm so excited because on our show today, we have an actress and fellow funny TikToker. It's none other than Nicole Dubois. Hi, Bestie. Hi, Bestie. I'm so excited that you're here.

I'm so excited to be here. I wouldn't want to be anywhere else. Same zeds. Also on our show, Not To Be Outdone, is a comedian, an actor, and impressionist. He's the host of Friend in High Places. It's Matt Friend. Welcome.

Oh my god. I'm so thrilled to be here on my computer like we're back in a pandemic. And honestly, you look incredible even through the computer. Both of you do and thank you for having me. I'm so excited. Thank you. Flattery will get you far.

You look incredible, Matt. It's the Ozempic. Thank you. So I guess before we get into the story of Martha Stewart, I have a question. On a scale from one to Martha Stewart, how would you rate your own domestic skills? Cooking, gardening, decorating during dinner parties, that sort of thing. I would say I'm like a Mary from Selling Sunset. Like it's there, but I'm not an expert.

I feel that. Like she puts out a cheese board for sure. I mean I can cook some basic dishes like a guacamole but uh. I don't know if you should be cooking that. Well you prepare a guacamole, like a pasta but I'm a clean guy. I can clean up around the house, fluff some pillows. It's not like I'm a crazy level of at-home knowledge, but I can make it look great.

All right. Matt the Fluffer. That's my porn name. Yeah. So today, I'm taking out our finest plates and silverware to set the table for a talk about Martha Stewart, the billionaire lifestyle guru who went from an immaculately decorated farmhouse

in Connecticut to a prison cell in North Carolina, tanking her picture-perfect reputation along the way. Let's start at the beginning. Martha is born in 1941 in New Jersey, and from a very early age, she's taught the skills needed to become synonymous with domestic perfection and to build her media empire. Her mom was a school teacher who teaches Martha cooking and sewing. And Martha learns all about gardening from her dad, who starts her off with the basics

when she's just like three or four years old. Martha also has this little entrepreneurial side growing up. She takes jobs babysitting the neighborhood kids. And for all the baseball fans out there, her clients include the children of legendary baseball players, Mickey Mantle and Yogi Berra. Wow, I did not know that. I feel like this is like the first season of a series.

Why are we not making a series about her life? Yeah. Oh, it'll happen. Narrated by Snoop Dogg. I want to play Martha Stewart. So bad. She also started planning birthday parties for other kids at the age of 10. What do you think of Martha Stewart birthday party at 10 years old would have looked like? If it's anything like the Comedy Central roasts, I would have certainly wanted to attend.

I feel like the party games were probably like, not that inclusive. Like it was probably like there's a winner and there's a loser and only one person gets a prize. Like they were probably like cutthroat birthday parties. You know, I feel like there would be not a catch up insight for it to dip the chicken fingers in. She'd be making an a-o-lee. You know, that's pretty easy for a 10 year old.

Yeah, you can whip that up. So Martha also gets a taste of the lime light pretty early on. She starts modeling and appears in a TV commercial when she's just 15 years old. And let's take a look at that commercial. No way. It odor proofs in almost every instance for over 24 hours. Helps blemish proof your skin too. Wow. Get the active soap for active people. Wait, wait, wait, wait. That's crazy. How old was she?

Fifteen. And she's playing this, like, wife? This stinky wife, deodorizing after all those dirty activities. That's wild. But how fifties was that? Her hair, her little singed waist. So fifties. Black and white. That's wild. But how 50s was that? Her hair, her little cinched waist. So 50s. Black and white.

Well, Martha, she continues modeling throughout college as a way to pay the bills, but in the 60s, she gets married and starts working as a stockbroker. And this involvement with the business world is another key part of Martha's personality. As we'll see, she's as good at making money as she is at making lattice crust pie. That just made me laugh. Well, in 1972, she and her husband moved to Connecticut. They buy a farmhouse that was built

in the 1800s and take it upon themselves to fix it up. Which is so crazy to me. What is the closest thing to an 1800s farmhouse you've ever fixed up? Cause I cannot relate. The current condo I live in is ancient. I went to an overnight camp when I was younger and then basically there was one thing you had to do like a solo survival,

like monitored by the counselors who were like hundreds of yards away but like sleep in the woods for a night by yourself. So I had to like build like a tent and like a one match fire and like, so yeah, that's it. I was resourceful for one night. Like you're describing being a contestant on that reality show Kid Nation. Do you remember that show Kid Nation? It was like survival for kids. Unfortunately, there were no cameras and I'm pissed about it.

Because what's the point with no cameras? I don't relate to this side of Martha Stewart. I am not a DIY person. I would like to think that I am, but I know I will pay somebody to do whatever task it is. In Connecticut, Martha also starts getting interested in food, gourmet cuisine, thank you very much. And in 1976, she launches a catering business. In 1977, Martha caters a book launch celebration and at this party, she makes a crucial connection. She meets the head of a major publishing house and he tells Martha that she has to write a cookbook.

So that's how she makes her big break. And we're on to career number six at this point. Literally. Yeah. What have I done by this eight? Like Jesus. I'll tell you why you appeared on the Big Flap podcast. Hell yeah.

Martha's never been here. So this first cookbook called Entertaining is published in 1982. It's a huge success, selling over 600,000 copies. Wow. And then over the next few years, Martha follows up with over half a dozen more books. And they are not just cookbooks. She writes a book about wedding planning

with tips for everyone, whether you're getting married in a mansion on Long Island or in a Montreal cathedral. super relatable, right? Very. Very relatable, a cathedral. Who's getting married in a cathedral, actually? Follow up. What constitutes a cathedral? Sorry, I'm picturing like a castle in the crown or something. You know what I mean? Like a 1400s situation, like in vogue. A church you have to know someone to get into. Well, if you're not into marriage,

she also writes a book on how to have the perfect Christmas by doing things like painting your own wrapping paper. That's an interesting do-it-yourself approach. But all of these books, they're helping Martha build up her reputation as the undisputed queen of entertaining in America. And she did it all without advertising it on TikTok. Yeah, just a bunch of books.

There wasn't even social media. Can you imagine? No. What a world. Ha ha ha. ["Jingle Bells"] So she takes all this momentum she's been building up over the years and uses it to

build out her brand and a multimedia empire. In 1990, she starts Martha Stewart Living magazine, which is a huge hit that grows to have a circulation of 2 million subscribers. In 1993, she takes her stardom to the next level with her own syndicated TV show also called Martha Stewart Living. Amazing. Yeah, that show, massive. Unbelievable.

It brings Martha into the living room of over five million people and makes those people feel very self-conscious about how those living rooms are decorated. So success. With the show, Martha has become a household name, but she's also a polarizing figure. To some people, her attention to detail is a sign of her being not just a perfectionist, but a total control freak. And some reporting reinforces this perception. One Vanity Fair article describes her presiding over every single aspect

of a 12-hour day of shooting, making choices about everything from the color of her sweater to the color of a vase to the size of a hole being dug in the garden. Wow. Okay. Yeah. She also makes unscheduled visits to Kmart stores that carry her products and personally rearranges items on the shelves if they aren't the way that she wants them.

And if she's still not satisfied with the store, she complains to the head of the company. You know what? I respect this. Okay. There's an admiration here. It's like Steve Jobsy sort of, it's like she's an entrepreneur and she wants to reach the level of success that she has achieved. But the miraculous thing about this is how does she have the time? Like how does she have the time to do every detail and then show up at Kmart?

How many of them are? Well, this impulse to get deep in the weeds over every tiny little thing, it is going to be a detail that comes back later, so let's just keep that in our back pocket. In 1995, Martha appears on the cover of New York Mag with a headline that captures some of people's feelings about her. The headline is, quote, she's Martha Stewart and you're not. Go ahead, snicker. But that crazed blue chip perfectionism has made her the definitive American woman of our time.

Definitive American woman puts a lot of pressure on the rest of the women. I think that's what's going on here. She's such a perfectionist to a level that other women just don't wanna do. And so they're pissed now, cause they're like, stop setting this expectation that everything's going to be perfect in my home.

Well, as a woman, I want to speak to that now. I mean, I... Uh... Well, wherever you land on Martha, there is no denying that she's an extremely savvy businesswoman. Extremely. Between the TV show, the magazine, the books, and more, Martha's got all kinds of brands out there.

And the business is bringing in $763 million in retail sales each year. Damn. So in 1996, she decides to bring all her brands under one roof by founding Martha Stewart Living Omnimedia, aka MSLO. Just three years later, in 1999, she makes the decision to go public with the company. When Martha takes MSLO to Wall Street, it makes her a billionaire.

And not just any old kind of billionaire. She's the first self-made female billionaire in American history. Round of applause for that. You can hire a lot of people to tend to your garden and make your food when you're a billionaire, but here she goes. She's still going to do it all herself is my prediction. Well, you're right. Cause Martha is more than just the head of the company, she is the company. Without her, it's worthless.

But that makes some people on Wall Street a little nervous. A question that investors ask at the time, though not in front of Martha, I'm sure, is what happens to the company if Martha gets run over by a bus? Right. I mean, what do you think would happen to the company if she got hit by a bus?

Hologram AI at this point. At this point today. Remind us the name of the company. It is Martha Stewart Living Omnimedia. Right, I mean, Steve Jobs didn't name Apple Steve Jobs. That's one thing. She literally is the company. I don't know.

It's a weird thing to think about, because after Steve Jobs died, it's like, how do you fill those shoes? And then Tim Cook managed to become one of the most successful CEOs of all time. I don't know. I think it's possible. Yeah.

You never know. Unfortunately, there is some trouble ahead. Oh boy. You remember her background in stock trading? I love your facial expressions right now. Ugh. Hello, this is Simon Mayo. And this is Mark Kermode. He's the UK's best and most trusted film critic.

He's a bestselling writer, broadcaster and national treasure. Far too kind. Kermode and Mayo's Take has all the reviews you need and star guests such as Sir Ian McKellen. Nice to be with you. Emma Stone. That sounds like something I would love to be a part of. Nice to be with you. Emma Stone. That sounds like something I would love to be a part of. Ewan McGregor.

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you can binge the full season of the Spy Who Putin poisoned early and ad-free with Wondery+. So Martha, as one might expect from a billionaire, has a number of investments. And in 2001, one of them is stocked in a company called Mclone, which is developing a cancer drug called Erbitux. And Mclone has a problem. Their big drug, Erbitux, is not going to be approved by the FDA. And that is bad news for the company's stock price. the FDA. And that is bad news for the company's stock price. The CEO of MClone has gotten advance notice about the FDA's decision and he's so rattled, he's planning on dumping his stock. The info is going to become public on December 28th, so the clock is ticking. If you're a shareholder and you've still got M-Clone stock on the 28th, your portfolio is going to take a big hit.

So where is Martha as all this M-Clone tea is being spilled? She's on her way to take a vacation with a friend in Mexico. And not just any vacation, it is a $17,000 vacation by the way. She's going to be staying in a $1,500 per night suite at a beachfront resort called Las Ventanas Al Paraiso, which is Spanish for the windows to paradise. Ah, yes. I frequent. Yeah. And if Martha's staying there, you better believe those windows have some damn

nice curtains. So really nice little vacay for Martha. She deserves it. She's been working hard. But on December 27th, 2001, while her private plane is stopped to refuel in San Antonio, Martha gets a call that changes the trajectory of her life and career. It's a call from the office of her stockbroker, Peter Bukanovich. Peter gives Martha the tip that the head of I'm Clone is going to be selling off his shares of the company. What do you do if you're Martha and you get that info? Right. Like, you can't just sit on that. I agree. You know what? I think I could commit white color crime. Now that we're getting into

it, I think I could. If you're in that resort, I think anything's easy. Mm-hmm. Well, Martha sells nearly 4,000 shares in Mclone, which gets her almost $230,000. And then afterwards, the stock does indeed dip when the FDA news goes public. How much do you think Martha wound up saving because she sold that stock? $350,000. $125. Okay. Martha wound up saving because she sold that stock. Uh... $350,000. $125,000.

Okay. Martha avoided losing just around 45 grand. No. Oh, wow. Yeah. Now, for us non-billionaires, that's serious money. But for Martha, that's less than three vacations to Mexico. Yeah.

You know what I mean? No. Yeah. What would you do for $45,000? White-collar crime? That's different. That's different because I'm not a billionaire. I'd appear on the big flop a couple of times. Go! All right, what do you know about insider trading?

Nothing. Nothing. Literally nothing. Apparently she didn't either. I see. So basically, if you get information about a company that is not public knowledge, you're not allowed to buy or sell stock based on that info. And penalties for

insider trading are pretty serious. We're talking fines of as much as $25 million and up to 20 years in prison. Big crime. So knowing this, why do you think Martha would risk so much over what is for her, at least not a ton of money? I think you probably just think there's no way they can prove this. Yeah. Especially when you're her at that level. I think fame and all that level of fame and wealth, your head has to be distorted in some capacity. I would imagine. Well, Martha, she makes her trade on December 27th, 2001, and it's not long before the authorities start looking into it. Just six months later, in June 2002, the Securities

and Exchange Commission, the SEC, opens an investigation. And Martha could not have picked a worse time to get on the wrong side of this law. This is an era when a lot of former executives are being hauled into court for shady behavior. Think Enron. If the SEC wants to make an example of insider trading, hardly anyone is more high profile than Martha Stewart at this time. When the investigation starts, the press has a field day. People are literally foaming at the mouth over the prospect of seeing Martha getting taken down a peg. Newsweek puts her on the cover of the magazine with the headline, Martha's Mess, an insider trading scandal

tarnishes the queen of perfection. Oh man. Yeah, that's not good. That's not a good, I would freak out. I feel like as far as like press goes though, it's like kind of good for her. It's like kind of gives her an edge. Like the actual crime part, the fact that she's facing crime, like that sucks. But she should have just like pulled a Trump and said they were all fake hoaxes.

It wasn't real. They come after me. It was terrible. The fake allegation. Like she, what if she just went that route and just denied everything? Oh, these days they would just give her street cred. I know. She would have been more popular.

She'd be president. Well, the media troubles, they only get worse. And on June 25th, when Martha appears on a morning show, Martha does this show once a week. And she thinks she's just going to be doing her normal cooking segment as usual. But the host of the show has other plans. The host wants to talk about Martha's legal troubles.

Let's take a look. Oh, so fun. Martha, it's good to see you. Hi, well, we're gonna make salad, but. We are, but first let me ask you a few things. My employees and I are hard at work at making our company the best omnimedia company in the world, Jane.

Wow. And we will continue to do that, and I want to focus on my salad because that's why we're here. Oh my god, I want to focus on my salad. I mean, that is just like the best, isn't it? Wow. I think that level of crime gives her the ability to say that, like Bill Cosby could not say, I want to focus on my salad.

You know, like that is exactly, but still that is so baller, isn't it? I want to focus on my salad. I want to focus on my salad. And she was just like, one more question. How is that not like more iconic, like merch? I want to focus on my salad. That's not like like, one more question. How is that not like more iconic, like merch? I want to focus on myself. That's not like a famous quote.

Well, because there was no TikTok. Yeah. Right, damn it, you're so right. And that's what's the problem with the past is there wasn't enough soul sucking social media. You're right. Well, Martha, she isn't a real jam though. And we're not talking homemade huckleberry preserves here. She thinks if she can come up with an excuse for why she sold the stock,

she'll be able to get out of all of this pesky little legal trouble. While speaking to investigators, she tells them she didn't sell the stock because she got a tip. It was because she had made an arrangement to sell the stock if the price went lower than $60. It wasn't insider trading. It's coincidence. If you're an investigator, what do you think about that excuse? As McConaughey said in that one movie, bullshit. I want to believe her, but that's why I'm not an investigator. I'd be terrible. You'd just be like, investigator. I'd be terrible. You'd just be like, okay.

I'd be like, oh, yeah. Yeah, that sounds right. Yeah. Well, they do not buy it. Shoot. On June 4th, 2003, Martha is indicted on nine counts, including securities fraud, obstruction of justice, and lying to investigators about why she sold her shares. Wow.

Martha, of course, strongly maintains her innocence, but she does resign as MSLO's chairwoman and CEO. She does stay on the board, however, as to not lose all control of the company. Now, as we know, the last thing Martha wants to do is lose control. God forbid someone mix up the salad fork with the dinner fork.

Could you believe? That would be worse than the insider trading. Now, the day after the indictment, Martha takes out a full-page ad in USA Today declaring her innocence. And she also sets up a website devoted to her defense, www.marthatalks.com. Okay.

Less than 24 hours after going live, the site gets over a million visits. A message on the website from Martha says, quote, I want you to know that I am innocent and that I will fight to clear my name. Oh my God. Mm-hmm. So Martha's trial begins in January of 2004. And the way Martha acts in the courtroom doesn't help to tamp down media interest in the case

or help the jury on her side. She comes to court every day carrying a Birkin bag worth $12,000. Well, that's still $5,000 less than the Mexico trip. Iconic. She speaks to the court sketch artist worth $12,000. Well, that's still 5,000 less than the Mexico trip. Iconic. She speaks to the court sketch artist with a small request. Martha says, please draw me with no pock marks

and perfect skin. No way. Hey, you miss 100% of the shots you don't take, Martha. Martha also brings her own cushions so she won't have to sit directly on the courtroom's uncomfortable benches. But at least she doesn't criticize the judge for wearing those unflattering robes. Man. That's not good.

Oh, well, she just didn't think anything was going to happen to her. She really didn't. What do you think a courtroom would look like if it was decorated by Martha? Well, definitely a lot of white people. At this time, yeah. I would say the Ritz-Carlton lobby or something. I don't know. Listen, I see beautiful, intricate rugs.

I see sheer curtains. I see beauty lighting, no overhead lighting. I see Versailles. I see beauty lighting, no overhead lighting. I see Versailles. I see Versailles, yeah. I see table scapes. I see like the gavel, it's what it's called, right? The bang bang?

It's a gavel? That's right, the bang bang. The bang bang? The bang bang. It's gold. It's ornate. I don't know. I mean, this wasn't as dramatic

as Gwyneth Paltrow's skiing trial,nate. I don't know. I mean, this wasn't as dramatic as Gwyneth Paltrow's skiing trial, was it? I don't know. Because Martha, she does ask some of her celebrity friends to show up to her trial as a show of support. Wow. Some of those celeb friends who come include Rosie O'Donnell and Bill Cosby.

You're joking. Stop. Are you kidding? Are you serious? Serious. Stop it. Bill Cosby went to Martha Stewart's trial? That does not hold up.

What? Wait a second. Now that's a big flap if I've ever seen one. Hey now. Well, when the testimony begins, it does not go well for Martha. Martha's own assistant testifies against her with tears in her eyes. That's nice. The assistant says she saw Martha alter a note that had details about her fateful phone call with her stockbroker in order to cover up the truth about the trade. She claims this note originally says, Peter Bukanovich thinks M-Clone is going to start

trading downward. Pretty clear evidence that Martha had inside info. But Martha changes it to, Peter Bukanovich, reply, M-clown. That's it. So Martha's stockbroker's former assistant also testifies and not just about potential criminal behavior, but also Martha's manners.

He tells the whole court about a time when Martha threatened to take her business elsewhere if they didn't change their hold music. Which I can relate to. But I almost prefer if the hold music is just bad and like just royalty free, just like, doon doon doon doon doon. She's very into Larry David territory over here. When they try to do rock music or something, it's almost more infuriating.

Well, the biggest bombshell comes from that friend who was with Martha on the Mexico trip, where she made the trade. Martha's friend, presumably now former friend, testifies that after Martha made the trade, she said, quote, isn't it nice to have brokers who tell you these things? Somebody's not getting invited back to the windows of paradise.

No, no way. The trial goes on for six weeks and on March 5th, 2004, the jury finds Martha guilty of obstruction of justice, conspiracy, and lying to investigators. The lying was the big mistake. And afterwards, she of course makes a statement. Let's take a look. Today is a shameful day. It's shameful for me and for my family and for my beloved company.

I'm just very, very sorry that it's come to this, that a small personal matter has been able to be blown out of all proportion. Yeah. She's like, look, this is personal, get out of my business. This insider trading is like, this is personal. Can't have it both ways. Yeah, just a little insider personal trading and then I just, I lied about it a couple times.

You know what I got from that? She said, it's a shameful day for me, a shameful day for my family, and for my beloved company. Yeah. The company is beloved, not my beloved family. Not beloved family. Well, Martha, she gets sentenced to five months in prison,

followed by two years of supervised release, which includes five months of being confined in her home, wearing a monitor on her ankle, only able to leave 48 hours each week. And she also gets a fine of $30,000. Sounds about white. Honestly, being confined to Martha Stewart's home is like kind of a dream. Yeah, it's great. Yeah, the five months in prison, rough.

Five months in her house, not so bad. But perhaps the most difficult thing for her though, she resigns from the board of MSLO. That was tough for her. So on September 15th, Martha announces that she's going to start serving her sentence as soon as possible. She claims she wants to get out in time to plant her garden at the start of spring. I'm sure she's the only person who you actually believe might be thinking about gardening at a time like this.

So relatable to all the criminals. Yes. So relatable to all the criminals. So Martha arrives at Alderson Prison in West Virginia to start her sentence just weeks later on October 8th of 2004. She gets assigned cleaning duty, sweeping, taking out the trash, scrubbing toilets, even the warden's toilet. She develops one mechanism to cope with her new surroundings. She refers to prison as Yale.

Later on, she explains, I always wanted to go to Yale. Wow. Just wanted me to do it. But I have to say, this prison has another nickname. Camp Cupcake. I absolutely do not want to downplay how serious it is to go to any prison, but you could do a lot worse than Martha's Camp Cupcake, let me tell you that. Like for one thing, the prison grounds are 100 acres and Martha is allowed to go out and walk around as much as she wants as long as she's back

by 4 p.m. What? This is more freedom than house rest. Literally. During her time in prison, she teaches yoga and even gets a taste for these chicken wings that they sell in the prison vending machines. Vending machine chicken wings. How far we've fallen. And as she gets to know the other inmates, Martha also gets a nickname, M. Diddy. gets a nickname, M. Diddy. Wow. Okay. She's very close to a lot of some sketchy names and sketchy people. M. Diddy. Yeah.

So however problematic that nickname was back then, it's much, much worse now. So Martha's starting to get acclimated to her new life. And because Martha is Martha, she's not going to let a little thing like being in prison stop her from achieving domestic perfection. At Christmas, she takes charge of the prison's holiday decorations, and she pulls off the assignment with only $50 to spend on supplies. She sneaks food out of the cafeteria to make some classic Martha treats, including a baked

apple with cinnamon and caramel. And near the end of her sentence, the other inmates have a farewell party for her, which is a potluck. And Martha somehow manages to make a caramel flan. What is happening? That's crazy. It's like it's just a camp. It's a little five month summer camp for Marth's. She sneaks food out.

These are criminals. What are we doing? Crazy. Yeah. What do you think it would be like, be her cellmate? Awesome or miserable? Well, not like Orange is the New Black. I don't know what state of mind she'd be in.

It'd be interesting. Considering the perfectionism, I don't think I'd want to be her cellmate. Yeah, same. It'd be a good book though, like Tell All. You know, I was Martha Stewart's cellmate. How great of a deal would that be? Yeah, if you're listening. Be sick.

Yeah, just cut us in. So on March 4th, 2005, Martha is released from prison, AKA she graduates from Yale. When she flies home, she's wearing a crochet poncho one of the other inmates made for her. How cute. Girls be girlin'. Martha's time in prison is over. But the fallout from her legal trouble is far from finished. Her biggest challenges are very much still ahead of her.

While she's been away, her company has been struggling big time. And it's going to be more difficult than she thinks to get that business back on track. If you were Martha, what would be your first move after leaving prison? Pooping in private. A prison cookbook. All the recipes I made while behind bars.

Yes. And by behind bars, I mean in her one-bedroom suite, I'm sure she had. Yeah. Or an album. An album. I would love to hear Martha Stewart sing. Well, Martha may be out of prison, but MSLO is still having major problems.

Even before she reported for her sentence, her legal trouble has meant big trouble for the company that is, you know, named after her. After Martha is found guilty, in 2004, MSLO stock plunges 22%, which also costs Martha herself millions of dollars. At that same time, the company reports their first loss ever. Revenues are down almost $50 million and advertisers are avoiding Martha's magazine like Martha avoids clashing patterns. Three days after the verdict, Martha's show gets pulled from CBS and UPN and over 200 people at MSLO are laid off.

I miss the days where insider trading was the worst thing you could possibly do. Right? Like the scandals now are so much worse that if this came out now, we'd just all be like, oh, okay. Mm-hmm. See you in a couple months, Martha. That's a good point. As all of this is going on, executives at the company are freaking out.

As one expert puts it at the time, quote, I'm not sure the brand can survive having a convicted felon associated with it. Mm. Mm-hmm. Yeah, for that kind of a brand, I would agree that that seems seemingly tough in the moment. Yeah.

Execs are starting to think about how they can distance the company from Martha. They even consider changing the name of the company and the name of Martha Stewart Living Magazine. I mean, now that she's out of prison, though, Martha is plotting her comeback. She's got to repair her reputation and pull MSLO out of its nosedive. But there are major obstacles. Right now, there's only so much Martha can do to turn things around with the

company. As part of resolving her case, she's banned from serving as an executive at MSLO or any other public company for five whole years. Man. Ugh. So how do you think Martha reacts to being in this position where she's out of prison and back at her company, but like cannot really be in charge. It's kind of another prison that she finds herself in. She was so controlling and had to be in the zone for everything and then now she can't leave the thing that presumably brought her the most reason to live.

Yeah. Like she literally said before she was going to jail, like she was talking about her company before her family. So I thought it was a happy time. Martha's got another problem. She's still got that five months of confinement at home ahead of her, which means her hands are seriously tied when it comes to how much influence she can have at MSLO. Remember virtual meetings were not a thing.

People were in the office and she couldn't be there. Don't feel too bad for her though, as we alluded to, her confinement is taking place in a $15 million three-story house on a 153-acre estate. So she's not exactly slumming it over there. In fairness though, to that point, while she is on a huge estate, she's only allowed to actually go outside the house at certain times. Like for instance, during one interview for a post prison Vanity Fair profile, Martha's out at her stables. When she suddenly realizes that it's almost time for her to get back inside, she winds

up having to sprint 600 feet through a pasture to make it back to the house in time so that she doesn't get in trouble. Wow. Wow. Okay. So they're like, go tend to your horses, tend to your chickens, check your property, and then get back inside. Get the heck back inside.

Get the heck back inside. Yeah. In September, when she's finally done with house arrest, Martha immediately jumps into action with plans to rehab her image. She's getting back on TV in a big way. Wow. She debuts a new daily talk show simply called Martha.

And she also launches her own spin-off of The Apprentice. The Apprentice, Martha Stewart. But Martha's return to the small screen immediately runs into some problems, especially when it comes to her vision of The Apprentice. The executive producer is hungry for controversy, so he tries to get Martha to flash her little ankle bracelet and talk about jail.

And talking about prison is obviously the last thing Martha wants to do as she's trying to get her career back on track. Yeah, she doesn't want to do that. Needless to say, it does not come back for a second season. She should have done like a Judge Judy thing where she's in the judge seat. Like a cooking judge, the cooking judge.

That would have been good. Oh, man. You should have been on that PR team. So Martha's attempt to rebuild her image on TV isn't going as well as she hoped, but how are things going on the business side of things? Not great. MSLO continues to head for rock bottom,

losing $76 million in 2005 alone. So what does Martha try to do to get her business back on track, even though she doesn't have full control over it? She overcompensates. Until she can fully take back the reins of her company, reins made of artisanal hand braided rope I assume, until she can take back those reins, five years from now, Martha's

micromanagement kicks into high gear with all the things that she can control. For example, there are a ton of Martha Stewart products, including over 3,000 different items just at Macy's. And Martha decides she's going to approve every last one of them herself. At one point, Martha brings a pot into a board meeting and brings it crashing down onto the table, says it's crap and she doesn't want to put her name on it. You may not be surprised to learn that this sort of thing leads to MSLO's head of merchandising to resign. At this time, she's even planning to release Martha Stewart video games.

Wait, wait. What? That's insane. Yeah. I did not realize she did that. It was planning. I don't think it ever happened. Right, because what is that video game?

It's like competing to make the perfect chicken cordon blue, like adding ingredients. But you know what? There's a lot of apps though that are now like food prep and folding clothes. So Martha's perfectionism is also costing the company money at a time when it can't afford to be taking any more financial hits. Martha orchestrates a Thanksgiving photo shoot that gets so overly complex, a kid's hair

somehow gets set on fire, and Martha gets a cut on her thumb that's so bad, she has to be sent to the hospital. Not the worst thing that's happened to her, you know? Yeah. Not the worst thing. Actually might help her if she's arrested again, they won't be able to find the fingerprint. It might actually help.

Yeah. When that same photo finally gets published, one of the special guests sitting next to Martha has to be blurred out of the shot because now he's on trial. Wow. In September of 2011, Martha is finally able to rejoin the board of MSLO, but at this point, it's too late.

The company has lost $185 million in the past eight years and has only turned a profit in one of those years. And the damage is done. The company never recovers. In 2015, MSLO is sold to a massive mega corporation. Once valued at over a billion dollars, it sells for just a small percentage of that $353 million. Yeah, that's not great. And is taken off the stock exchange on December 4th, 2015. Martha.

That's not good. Mm-hmm. Ay-ay-ay. This is obviously rock bottom for Martha. She does put out a little statement. It's pretty flat. It says, this sale is transformational. For Martha Stewart Living Omnimedia,

the company I founded in 1997. I think she's doing fine. Let's do a little, where are they now? Martha's diamond hard image has softened in recent years, partially thanks to her extremely memeable friendship with Snoop Dogg. The two had a TV show together called Martha and Snoop's Potluck Party Challenge, and they even collaborated on a series of Martha and Snoop branded lighters with cheeky ads hinting at what you might light up with them other than candles. Her net worth is still estimated to be somewhere around $400 million, which plenty of cash

to buy oats for her horses. Mm-hmm. Oh, and that drug that started the whole insider trading mess because it wasn't going to be approved by the FDA? It wound up being approved anyway in 2004. Well, everything is approved by the FDA. They really will approve whatever. So here on The Big Flop, we try to be positive people and kind of on a high.

So are there any silver linings that you can think of that came up from Martha Stewart and her company? Snoop Dogg's cookbook. Yes. Snoop Dogg has an amazing cookbook. I don't know if you've seen it. I got to think that never would have happened if Martha Stewart never went to jail. I think that Comedy Central roasts never would have happened too.

Martha's an incredible comedic persona morphing into what she is now. I mean, a lot of young people probably think of her from those roasts, which is weird to think about. Yeah. Love that. Well, now that you both know about the insider trading case that took Martha Stewart from home living to prison cooking, would you consider it a baby flop, a big flop, or a mega flop? It's a mega flop.

I think it's a mega flop, but I think because of when it happened. You know, I think if it happened now, it would almost like help her. You know? I agree. I agree with her. She could be in Trump's cabinet, but also it's a big flop. But I mean, she kind of has resurfaced. So it's not an entire flop because a flop means you don't come back. Yeah. I mean, but from billionaire to 400 million, that's got to hurt. It's a big flop. Well, thank you so much to our guests, Matt Friend and Nicole Dubois for joining us here

on The Big Flop. And of course, thanks to all of you for listening. If you're enjoying the show, please leave us a rating and review. We'll be back next week with another flop you can smell coming from around the corner. It's Abercrombie and Fitch. Wow. Oh, I'm excited for that one. Bye.

If you like the big flop, you can listen early and ad free on Wondery Plus. Join Wondery Plus in the Wondery app or on Apple podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey at Wondery.com slash survey. The Big Flop is a production of Wondery and At Will Media, hosted by Misha Brown, produced by Sequoia Thomas, Harry Huggins, and Tina Turner, written by Anna Rubinova and Luke Burns, engineered by Zach Rapone, with support from Andrew Holzberger. Managing producer is Molly Getman.

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