Meredith, Koch Brothers Buy Time Inc In $2.8 Billion Deal

Confirming rumors that had swirled over the past 10 days, on Sunday night Meredith Corp., publisher of Better Homes & Gardens, Martha Stewart Living and Family Circle announced it has agreed to acquire all of Time Inc's outstanding shares for $18.50/share or $1.85BN; including the assumption of Time's debt, the deal is valued at a total of $2.8 billion. Meredith has secured $3.55BN in debt financing from RBC Capital Markets, Credit Suisse, Barclays and Citigroup Global Markets, according to the FT.

More importantly, the acquisition is also backed with a $650 million preferred equity commitment from Koch Equity Development, the private equity firm of Charles and David Koch, giving the conservative billionaires a stake in one of America’s best-known publishers. That said, the Kochs will not have a seat on Merediths board and, the company said, “will have no influence on Meredith’s editorial or managerial operations”.

That remains to be seen, especially if Trump now develops aspirations toward Meredith's Man of the Year award. Needless to say, it is the Koch's takeover of Time that is giving the left nightmares:

In any case, this is Meredith’s third run at 94-year-old Time according to the FT, which publishes Time, People and Sports Illustrated magazines. The deal has been approved by both companies’ boards and is expected to close in the first quarter of 2018.

As the WSJ reports, "the deal caps the end of an era."

Time, whose namesake Time magazine hit the newsstands in March 1923, emerged as one of the country’s great journalistic enterprises, shaping both the political and cultural landscapes. But in recent years, the magazine publisher lost ground as a shift among readers to digital platforms cut into traditional print revenue and a new generation of online rivals emerged.

Like most other legacy media outlets, Time has been trying to transform itself from a print to a digital media business in the face of successive years of declining revenues but has been shackled with a $1.2bn long-term debt burden. The $2.8bn deal value includes assumption of Time Inc’s debt.  The company has been making sweeping cost cuts, eliminating 300 jobs, cutting back the circulation and frequency of some of its best-known magazines, and attempting to sell its UK magazines division. Time Inc. has also been investing in online video and branded content and even a subscription services for pet owners, yet its print magazine circulation and advertising still account for about two-thirds of total revenue. In the first nine months of the year, magazine revenue dropped 17% to $1.3 billion. Time Inc. claims 30 million print subscribers, although that sounds like the fakest news yet. Time expects to generate about $1 billion this year in nonmagazine revenue.

Time has struggled to find a path to growth since its spinoff from Time Warner in 2014. The publisher’s shares lost more than a third of their value, even as Time has cut traditional jobs while adding digital staffers, reorganized its ad sales and scaled back the circulation and frequency of some titles. As the FT adds:

"Time Inc’s 3½-year run as a standalone publisher has been rocky. It has been hard hit by the erosion of print and has not recorded revenue growth over the past six years. A strategic reorganisation aimed at growing digital revenues and reaching a wider audience has shown some progress, but has been overshadowed by the woes of its traditional magazine business, where revenues have dropped 14 per cent from a year ago."

Time's new owner, Iowa-based Meredith, publishes monthly magazines aimed at women, including Better Homes & Gardens, Martha Stewart Living and Family Circle, and has long coveted Time titles such as People and InStyle. It has tried and failed to reach a deal twice before. In 2013, talks with Time Warner, which then owned Time Inc, fell apart and the publisher was spun off as an independent company.

Stephen Lacy, Meredith’s chairman and chief executive, said the combined company will be able to reach almost 200 million consumers across all platforms, including digital. “The vision is the absolute premiere media company in the country with premium branded content on every platform,” Mr. Lacy said in an interview. “We’re very excited to bring these businesses together.” Lacy said he has never met with the Koch brothers. “They won’t have a seat on the board of which I chair,” he added.

Meredith’s own magazine revenue has slipped slightly, but it has somewhat of a buffer thanks to its ownership of local television stations. For the fiscal year ended June 30, revenue at its magazine group fell 2% to $1.08 billion, while its TV station group saw revenue rise 15% to $630 million.

Few in the magazine industry have been spared the downturn in print and difficulties of building a sustainable digital business. Condé Nast, the owner of Vanity Fair and Vogue, is slashing budgets and staff; Vanity Fair’s new editor has been tasked with trimming its costs by 30 per cent. Rolling Stone, the iconic rock-and-roll magazine, is being sold by its founder.

As the WSJ concludes, for Time CEO Rich Battista, the sale may be bittersweet. Soon after he took the reins in September 2016, Time found itself the target of several interested buyers, and then a sale process dragged on for months with no deal. While Mr. Battista has emphasized the company’s digital efforts and ramped up the production of TV programming and video, he had relatively little time to shift Time toward a more robust digital future.

“As a publicly traded company, and one operating in such a dynamic industry as media, we know circumstances can change quickly,” Mr. Battista said in a memo to employees. “Meredith presented us with an opportunity to combine companies to create even greater scale and financial flexibility.”

Finally, in light of the animosity between the Koch's and Trump, the president can forget being Time man of the year for 2017 or as long as the billionaires are de facto in charge.

Comments

jeff montanye wee-weed up Sun, 11/26/2017 - 21:50 Permalink

well apparently there is worthless and then there is worth several billion dollars.  i have had a feeling that the koch brothers are part of the zionist deep state but on further investigation find it is at least more of a mixed bag.  eli lake, a very dependable mossad/likud zionist, is pissed at one of them for a conference a couple years ago where a bit of the truth about israel was allowed to surface, so that's a good thing:http://archive.commercialappeal.com/opinion/national/eli-lake-koch-brot…

In reply to by wee-weed up

techpriest JamesBond Mon, 11/27/2017 - 00:10 Permalink

Like I was saying on the Monaco club article, mags like Time represent legitimacy, because they have simply been around a long time and have distribution in doctor's offices and mechanic shops. If someone with all of those degrees is putting that mag in the lobby, surely the content is OK, right?

Watching the reputation be stolen by trash writers being paid to pimp propaganda is a hell of a sight to behold. It's also an opportunity for some actual journalism to take their place.

In reply to by JamesBond

sarz jeff montanye Mon, 11/27/2017 - 07:10 Permalink

Jeff, the article you linked to didn't mention that the Koch brothers are Jews under crypsis. Their fathsr, an American Jew, made his fortune through a special deal with Stalin's Soviet Union in the 30s, the sort of stuff one would expect from knowing the role of Wall Strret Jews, particularly Shiff, in financing Lenin and Bronstein. Father and sons all have put on the look of right wing gun nut Protestants. Fools almost everyone, except people like Brother Nathanael Kapner. I find no solace in the fact that they took some mildly anti-Israel position. Our great teacher, the author of the Protocols, told us to expect (((them)))  to own every single position. 

In reply to by jeff montanye

Mazzy Rikky Sun, 11/26/2017 - 20:51 Permalink

Numerically there probably aren't many. There are probably far more brainwashed Evangelical Christian Zio-cucks residing there.  I wonder how many of them fly the Israeli flag and even send money to supposedly "starving Israelis" via the fake charities that get promoted on Fox news and similar outlets.

In reply to by Rikky

MozartIII Rikky Sun, 11/26/2017 - 21:06 Permalink

The Jews will own the cities if you are a believer of the first half of the Bible. It's promised to them. They will also be a Persecuted remnant that can not be wiped out. Can't maake this shit up, it's in the bible. You have to be able to read! Not Jewish, the hate is sad and always an excuse for personaal faliure in need of a scape goat. You can't get an easier one. You might end up on the wrong side of God though. Might be a big Boo Boo......

In reply to by Rikky

Mazzy Winston Churchill Sun, 11/26/2017 - 20:28 Permalink

I used to get a subscription in my early 20's because my family used to get it while I was growing up.  It's been such a liberal rag for so long that I ditched it after just one year. Never did subscribe to Newsweek.  That one was even more biased and never did have much quality.I do believe their claim of 30 million subscribers, unlike what the author is trying to suggest.  That's only 8% of the country, not a far stretch for such a prominent magazine.

In reply to by Winston Churchill

pigpen Sun, 11/26/2017 - 20:28 Permalink

America keep destroying any digital advertising business model esp these dinosaurs. Please put them out of their misery.Use brave browser. Brave blocks by DEFAULT advertising, tracking and malware and works on any device and operating system.Cheers,Pigpen 

Cash Is King pigpen Sun, 11/26/2017 - 21:32 Permalink

And one day Pigpen you’re gonna wake up and realize you have to pay for everything and then you’ll really be mad! I agree these bastards (ZH included) are damaging their own brand with their monetization efforts but there’s a better balance than overkill (like here) and complete blockage using whatever ad block you use. JM2C

In reply to by pigpen

Rikky Sun, 11/26/2017 - 20:46 Permalink

traditional publishing is dying a slow death as they cannibalize each other.  aren't many left and so far Meredith is one of the few rag companies still standing but that just means they can eek out a bit longer existence before sucumbing to the same fate.

cynicalskeptic Rikky Sun, 11/26/2017 - 21:40 Permalink

No more real news reporting from print - with a very few exceptions........   older readers are disgusted with the (lack of) quality reporting while younger viewers all delusionally believe in social media.....The Republic depended on an educated and informed populace - it's been gone for a very long time.

In reply to by Rikky

GRDguy Sun, 11/26/2017 - 21:42 Permalink

It's just sociopathic financiers consolidating their plantation ownership.I hate it when the warnings of that old 1889 book Great Red Dragon continues to happen.