Time Inc. was Bought by Meredith Corp with the Help of the Koch Brothers

Chief Digital Office at Time Inc. Randall Rothenberg at a presentation

The 2.8 billion deal will see Time Inc. become part of Meredith Corp.

Time Inc., the media company that publishes Fortune, Sports Illustrated, and others, has been bought by its rival company, Meredith Corp, for $2.8 billion. The deal was previously reported to have been backed by the billionaire brothers, Charles and David Koch, who are known for supporting conservative causes.

Meredith Corp. is an Iowa-based publisher and broadcaster, known for their Family Circle and Better Homes and Gardens magazines as well as several local television stations across the US. The company has courted Time Inc. in the past with two other unsuccessful offers.

Time took the deal just in time, as the company has been struggling with poor revenue ever since they separated from the Time Warner conglomerate in 2014.

November saw Time’s third-quarter revenue drop 9.5 percent to $679 million, falling short of analyst’s expectations for the sixth quarter in a row. Time Inc. isn’t the only publisher to suffer from poor profits as this can be attributed to an obvious side-effect of digital media. They were joined by Rolling Stone and Vanity Fair whose owners, Jann Wenner and Graydon Carter respectively have either put their assets on sale or have quit before going under. Chief Executive of Time Inc., Rich Bautista, promised to increase their online presence after their departure from Time Warner. But as they soon found out, established companies like Facebook and Google wouldn’t budge from their digital throne. 20 percent of shrinking revenue in the latest quarter was due to Time’s digital advertising.

“This is an all-cash transaction, and the immediate, certain value it provides, is the best interests of the company and its shareholders,” said Time’s Chairman John Fahey in a statement.

Meredith has stated that the deal will give them $700 million in digital advertising revenues and will allow to branch out to millennial customers, in their twenties and thirties.

The presence of the Koch Brothers may put many people off as they are known for pushing economic conservative causes, however, it’s been noted they would not get a board seat in the new merger. Meredith got a $650 million injection from the Koch brother’s private equity arm, Koch Equity Development.

The Family Circle publisher estimates to save between $400 and $500 million within two years of the merger with Time Inc.

Image Source: StaticFlickr

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