Maybe it's just the week-old, lunchtime Velveeta 'n' shells talking here, but when I go back and review the latest quarterly results from Martha Stewart Living Omnimedia (NYSE:MSO), I'm nearly impressed.

I mean, in the fourth quarter, the company managed a 40% revenue jump and actually turned a small profit. But wait; let's get to the full year. Oh, yeah, there it is: the wider, $76 million loss on a 12% increase in revenues. I knew even a funk-cheese euphoria couldn't keep me high on Martha for long.

For the upcoming year, the company predicts -- no surprise here -- more losses, though it aims to be breakeven or profitable on a free cash flow basis for 2006. That's good, if it happens, but moderated losses do not an investing thesis make, especially since Martha's real strength is in the publishing space, where other firms are finding their growth stagnating.

But what about Martha's future growth prospects? Her well-publicized scuffle with The Donald this week over her flop version of TheApprentice only highlighted the fact that the one-time American diva is not, alas, going to storm back and take over the world. Yes, she'll have her core audience, but how much can that core pay off? Will that Sirius Satellite Radio (NASDAQ:SIRI) show bring in a new generation of paying Martha fans? No one really knows.

The recent earnings release offers some ideas. It highlights a deal to get back into the Web retail space, especially via the "$3 billion scrapbooking" industry, and while that might sound good, let the record show that all the craftiness in the world isn't helping Jo-Ann Stores (NYSE:JAS), and competitors like Michaels Stores (NYSE:MIK) will offer plenty of local options to the nation's snip 'n' paste crowd.

MSO management also cited an expansion of its deal with KB Homes (NYSE:KBH) to let everyone live a little bit like Martha. But there again, since the original press touting this relationship was pretty slim on details, and the quarterly filings since then don't mention it, it's tough to tell whether there's any takeaway here for investors. (Remember, investors didn't get a thin dime from Martha's Apprentice deal, although she and producer Mark Burnett made out fine.)

And that's the continuing problem with these shares. This is a company that continues to reward insiders, while investors sit on the sidelines and hope for illusory profits. While I was searching for some KB information, I came across yet another bad example.

Just last October, the chairman of the board, Charles Koppelman, inked a deal that gives his consulting company, CAK Entertainment, a mere $725,000 per year (formerly $450,000, by the way), plus 200,000 options and 75,000 shares of common, with up to $3 million in bonus potential, with payments vesting, by the way, not according to earnings or cash flow targets, but by "deal cash flow" targets, defined as revenue and even -- get this -- for appearances on editions of Martha's Apprentice show. Pretty sweet, eh? That's a 61% increase in Koppelman's cash take for this deal since January of 2005, when the prior one was made. Here's what investors got over the same period -- a 50% haircut.

I've said it before, and I'll say it again. Martha Stewart Living Omnimedia: a very good deal for management and insiders. For outside shareholders, not a good thing.

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Seth Jayson is continually amazed by what shareholders are willing to buy. At the time of publication, he had no positions in any company mentioned here. View his stock holdings and Fool profile here. Fool rules are here.