Meredith Corp. buys Time Inc

Media company, Meredith Corp. has confirmed that it is buying Time Inc. for about $2.8 billion. The CEO Stephen Lacy of the company called the deal "a transformative and financially compelling growth opportunity" that joins two giant magazine companies.

Background

Time Inc. is a multinational mass media corporation founded on November 28, 1922 by Henry Luce and Briton Hadden and based in New York City. It owns and publishes over 100 magazine brands, including its namesake Time, Sports Illustrated, Travel + Leisure, Food & Wine, Fortune, People, InStyle, Life, Golf Magazine, Southern Living, Essence, Real Simple, and Entertainment Weekly. It also has subsidiaries which it co-operates with the UK magazine house Time Inc. UK, whose major titles include What's on TV, NME, Country Life, and Wallpaper. Time Inc. also co-operates over 60 websites and digital-only titles including MyRecipes, Extra Crispy, TheSnug, HelloGiggles, and MIMI. In 1990, Time Inc. merged with Warner Communications to form the media conglomerate Time Warner. This merger lasted until the company was spun off on June 9, 2014.

The Meredith Corporation is an American media conglomerate based in Des Moines, Iowa, USA. The company has two divisions: National Media and Local Media. As of 2016, the company employs 3,600 people and has US$1.6 billion in revenues.

The Koch family is an American family engaged in business who have control of Koch Industries. It is the second-largest privately owned company in the United States. As of 2013, it had revenues worth $115 billion. Charles G. Koch and David H. Koch, today commonly referred to as the Koch brothers – and the only two of Fred Koch's four sons still with Koch Industries – are affiliated with the Koch family foundations. The Koch brothers and the extended family are heavily involved in American politics. They often fund the most conservative and right-wing politicians in the country. They supported US President Donald Trump in his Presidential bid. Some have argued that they have links to the so-called alt right.

Analysis

Media company, Meredith Corp. has confirmed that it is buying Time Inc. for about $2.8 billion. The CEO Stephen Lacy of the company called the deal "a transformative and financially compelling growth opportunity" that joins two giant magazine companies.

The mammoth deal was only made possible in part, by an infusion of $650 million from the private equity arm of Charles G. and David H. Koch, the billionaire brothers known for using their wealth and political connections to advance conservative causes.

Analysts have said that bulking up on publishing assets could give Meredith the scale required to spin off its broadcasting arm into a standalone company. "We are adding the rich content-creation capabilities of some of the media industry's strongest national brands to a powerful local television business that is generating record earnings, offering advertisers and marketers unparalleled reach to American adults," Meredith Chief Executive Stephen Lacy said in the statement.

Time Warner Inc spun off Time, which also publishes the eponymous current affairs magazine, as a standalone company in June 2014. Since then, New York-based Time had struggled in an industry-wide decline in print media, as circulation shrinks and advertisers shift to digital platforms.

Time Inc. employees have expressed concern over the deal as they are unaware of which of Time Inc’s brands will survive the merger. CEO Rich Battista has noted that he himself is unaware of what the future holds of some of the company’s most iconic brands. He reportedly told an employee, “They're going to do a pretty exhaustive review and at that time they're going to decide what makes sense for them going forward."

During a town hall, one of the employees asked Battista why the Koch brothers had invested $600 million in the deal and if they expect to influence the company’s overall messaging. Battista said, “I can't speculate on exactly what their decision making was. What I can do is tell you the facts we got today, and those are that Meredith has made it clear in their press release that the Koch brothers won't have any board seat, that they won't be influencing management, or editorial operations."

Meredith said in a statement that the Koch brothers, who are huge donors to the Republican party and conservative causes, will not have seats on the board "and will have no influence on Meredith's editorial or managerial operations." Combined, the companies posted $4.8 billion in revenue last year.

Assessment

Our assessment is that the sale has resulted in the creation of one of the largest and most influential media brands in the world. However, concerns have persisted on whether the controversial Koch brothers will try and wield influence in the way content is disseminated to the world. We have seen similar trends of industrial houses buying media brands in India and elsewhere. We feel that there must be absolute clarity about the ownership and the conduct of such industrial houses so that it does not affect the functioning of democratic institutions within a country.