By Amy He  Wed Jul 10, 2013

Paula Deen’s Costly Mistake

Diane Cohen/FAMEFLYNET

Diane Cohen/FAMEFLYNET

Paula Deen is not having the best couple of months.

If you haven’t been keeping up, Deen was slapped with a lawsuit brought on by a former employer, who accused Paula and her brother of being racist and sexist in the workplace.

Deen was said to have used the n-word multiple times, “wanting black waiters to play the role of slave in a wedding party she was planning,” and her brother was accused of engaging in workplace misconduct, such as viewing pornography openly at their restaurant.

Deen was deposed in May about these allegations, and in the deposition obtained last month, the reality was even more outrageous. Deen had used slurs against various minorities — including African Americans, gays, and Jews — and wanted to plan a southern-style plantation wedding that would employ African Americans as slaves.

The backlash to this piece of news was quick and severe: many of the brands who had long worked with Deen quickly terminated their contracts with her or put them on hold.

Last year, Paula Deen earned an estimated $17 million with her vast food empire, which sprawls across television programming, merchandise, and various other licensing deals.

With so many of her partnerships being severed, how much does she stand to lose?

Food Network

The first major blow to the Paula Deen empire came when the Food Network refused to renew their contract with her when it expired at the end of June.

Deen had three programs on the network, which included “Paula’s Best Dishes” and “Paula’s Home Cooking.”

The network reportedly paid her $50,000 per episode, and Deen stands to lose about $2.5 million from not having her contract renewed.

Novo Nordisk

When it was revealed that Deen had Type 2 Diabetes, she became the spokesperson of pharmaceutical company Novo Nordisk, which makes the diabetes drug Victoza that Deen endorsed.

The deal ired some, since many of Deen’s dishes heavily promoted ingredients like butter and sugar, and once she decided to go public with her condition, she stood to make millions from the partnership with the pharmaceutical company.

Novo Nordisk suspended their relationship with Deen, and she could potentially be losing $6 million from the deal.

Smithfield Food

Smithfield Food, a major pork producer, sold Paula Deen-branded hams and the cook herself was the spokeswoman of the company.

A rep from Smithfield told NBC that “Smithfield condemns the use of offensive and discriminatory language and behavior of any kind. Therefore, we are terminating our partnership with Paula Deen.”

The termination of the deal will cost Deen an estimated $1 to $2 million a year.

Walmart

Walmart also severed its ties with the Southern cuisine queen.

The retail giant sold Paula Deen-branded merchandise, which includes her kitchen appliances and baked goods. They said that they would sell the remainder of the inventory they already have in stock, and then will not be looking to place any more orders.

Their partnership was “lucrative,” with Walmart selling more than 200 Paula Deen-branded items, and financial experts say that this deal could cost her millions, though the exact number is unknown.

QVC

QVC, the home-shopping network, decided to take a break with Paula Deen.

President and CEO of QVC Mike George wrote to viewers, saying that “For now, we have decided to take a pause. Paula won’t be appearing on any upcoming broadcasts and we will phase out her product assortment on our online sales channels over the next few months. We all think it’s important, at this moment, for Paula to concentrate on responding to the allegations against her and on her path forward.”

Though it’s unknown how much of an immediate impact it will have on Deen’s earnings, QVC was a platform for which she could sell an assortment of her Paula Deen-branded products, and the loss of the platform could cause the value of her brand to diminish down the road.

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MyBankTracker readers, what are your thoughts on the deals and partnerships that Paula Deen are losing as a result of her use of racial slurs?

 

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