U.S. media company Meredith Corp. has agreed to acquire Time Inc., the U.S. publisher of Sports Illustrated and Fortune magazines, for about $2 billion, according to media reports on Sunday.
Liana B. Baker and Greg Roumeliotis of Reuters had the news:
The acquisition would be a coup for Meredith, which held unsuccessful talks to buy Time earlier this year and in 2013. 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.
Meredith, whose bid for Time is backed by an affiliate of billionaire brothers Charles and David Koch, may announce an agreement as early as this week, the sources said.
A unit of Koch Industries has been backing Meredith’s bid with $600 million in financing, sources previously told Reuters. It is not clear how much influence the Koch brothers would have over the combined publishing company. Koch Industries, which owns brands such as Brawny paper towels, Dixie Cups and Lycra, is controlled by Charles and David Koch, two of the world’s richest men.
The Kochs are known for their conservative views and views on economic freedom. They have previously expressed interest in buying media properties such as the Los Angeles Times and the Chicago Tribune in 2013.
Sydney Ember and Andrew Ross Sorkin of The New York Times reported that the Koch’s influence on the magazine business is undetermined:
Some Koch allies have suggested that the brothers would not have any operational control over the company and that they viewed their investment purely as a moneymaking opportunity. But others familiar with the Kochs’ thinking speculate that they intend to use the media properties — which reach millions of online and print readers — to promote their brand of conservatism. The investment would also give the Kochs a way to combine the arsenal of voter information held by a data analytics company controlled by their network, i360, with the publishers’ consumer data.
Whatever the Kochs are planning, the sale of Time Inc. almost certainly signifies the beginning of the end for what was once the country’s most celebrated magazine publisher.
It also underscores how inhospitable the environment has become for magazine companies, which have crumbled under the pressure of declines in print advertising and circulation. Rodale, the publisher of Men’s Health and Runner’s World, recently announced that it had sold itself to Hearst, which owns Cosmopolitan and Esquire. Rolling Stone, once considered a counterculture bible, is exploring a sale. In July, Emerson Collective, the organization founded by Laurene Powell Jobs, took a majority stake in The Atlantic.
Peter Kafka of Recode looks closely at why the Kochs are interested in the media business:
Do they think it’s a good financial bet? Or do the brothers, a powerful force in conservative politics, like the idea of influencing one of the world’s largest publishers, even if it’s nothing like the powerhouse it used to be?
It’s possible that the Kochs, or Meredith, will share some insight when they formally announce the deal, tonight or tomorrow morning. I wouldn’t hold my breath, though.
One indicator that the Kochs may view this as a passive investment: A source familiar with the deal says the brothers and their representatives won’t have a seat on the Meredith board.
The more important sign to watch: See if Meredith, which publishes titles focused on women and the advertisers who want to reach them, ends up hanging on to the titles it has traditionally been uninterested in — particularly Time and Fortune.
If Meredith — the publisher behind Family Circle and Better Homes and Garden — now decides it is interested in the news business it wanted no part of for years, it doesn’t automatically mean the Kochs plan on having an active hand in the news business. But it would be an obvious answer.
