The prestigious magazine publisher, Time Inc., was acquired by the Meredith Corporation on Sunday night for $2.8 billion in cash. Including in this total was $650 million from the private worldwide magnates, Charles and David Koch, commonly known as the Koch brothers. Although it is said that Meredith will not influence the editorial board, almost identical claims were made when known Trump supporter, Rupert Murdoch, became CEO of Fox News. Since then, Murdoch has received harsh criticism for altering the network’s culture in what one Fox employee described as “an extension of the Trump White House.” Will this acquisition cultivate a more conservative tone for one of the most renowned periodicals in U.S. history? By default, the agreement signifies a shift in the direction of American media and ultimately its future.
Time Inc. is seasoned with nearly 100 years in the game responsible for publishing classics such as Time, Sports Illustrated and People Magazine. The founders, Henry R. Luce and Briton Hadden, envisioned a weekly that would portray the changing times through captivating images and compelling content. The Meredith Corporation, widely recognized for the magazine, Better Homes and Garden, was founded in 1902 and now owns additional journals such as Family Circle along with AllRecipes. However, Meredith has been able to adjust to contemporary media while Time Inc. has struggled to hang on.
The transition from print to digital media wasn’t fully maximized and is now barely being embraced. Time Inc.’s 3rd quarter financial report for 2017 described losses in numerous categories with total revenues of $679 million; over a $70 million reduction from last year. However, the returns from their digital content increased $5 million from last year at $165 million, representing 24% of the company’s total revenue for this quarter. Thanks to their newly established Strategic Transformation Program, Time Inc. was able to save $400 million in cost cuts.
Company CEO, Rich Battista, reported to his staff that the agreement with Meredith would:
“Write the next great chapter of this storied company…as a publicly traded company, and one operating in such a dynamic industry as media, we know circumstances can change quickly. [Meredith] presented us with an opportunity to combine companies to create even greater scale and financial flexibility.”
Under current conditions, Meredith will pay $18.50 per share, and the deal will be finalized at the beginning of 2018. Whether or not this acquisition will strengthen conservative influence is still up for debate but, as always, time will tell.
What do you think of this agreement and how much of an impact will it have on Time Inc.? Do you think it will be another Fox-Murdoch scenario or will there more integrity? Make sure to drop us a note and let us know what you think.