A long chapter in media history came to an unlikely close on Sunday night with a sale agreement for Time Inc., the publisher of once-prestigious magazine titles including Time, Sports Illustrated and People.
The Meredith Corporation — the owner of Family Circle, Better Homes and Gardens and AllRecipes — agreed to purchase Time Inc. in an all-cash transaction valued at nearly $3 billion. The deal was 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.
The deal could represent the beginning of the end for one of the country’s most celebrated magazine publishers, whose titles commanded the attention of global leaders and chronicled world events, sometimes with striking photography. It also brings together two companies that have long courted different audiences, seeking readerships that echoed the places they called home.
Time Inc. is New York to its core. The company was founded by Henry R. Luce and Briton Hadden, who had worked together in their college days at the Yale Daily News. Together they hatched the idea of a fast-paced weekly that would capture an increasingly hectic and urbanized world.
After the successful start of the business magazine Fortune in 1930, Luce added Life magazine to Time Inc.’s growing stable and transformed it into a wide-ranging general interest magazine that made use of glorious photography to capture movie stars, world leaders and exotic, far-flung places. In the middle of the 20th century, Time Inc. even had its own film arm, with “The March of Time” series of news shorts that played in movie theaters before the main feature.
Meredith, based in Des Moines, is a Midwestern publisher through and through. Its founder, Edwin Thomas Meredith, entered the media business in 1902 with a magazine called Successful Farming. He soon began the still-thriving Better Homes and Gardens, which has a circulation of more than 7 million.
Its popular magazines have long focused on families and women, taking aim more at Middle America. It has eschewed an expensive headquarters in Manhattan and maintained a diversified portfolio — the company also owns local television stations — that has allowed Meredith to better weather the economic storm that has faced print publishers.
Acquiring the legendary magazine business gives Meredith control of dozens of other big titles such as People, Sports Illustrated, Fortune and Entertainment Weekly. Meredith already publishes several top magazines, including Parents, Shape and Better Homes & Gardens.
It also plans to sell a sizable chunk of the combined business — $650 million worth — to a company owned by Charles and David Koch. The Koch brothers are mega-donors to the Republican party and conservative causes.
End of an era
In its heyday, Time Inc. (TIME) was a publishing colossus, delivering weekly magazines to millions of people around the world. Its titles deeply influenced the way people digested news, sports, leisure and entertainment.
The publisher gained even more influence in 1989 when it merged with Warner Communications to form Time Warner (TWX), CNN’s parent company. At the time, it was the nation’s largest media company.
But America soured on magazines in the internet age, and Time Inc. has struggled mightily as an independent company since its 2014 spinoff. It continues to lose subscribers and advertising dollars.
Meredith thinks there is some untapped value by combining the two companies.
In a prepared statement, Meredith President Tom Harty called the deal “transformative.”
“When you combine our strong local television business … with the trusted, premium multiplatform content creation of Meredith and Time Inc., it creates a powerful media company serving consumers and advertisers alike,” Harty said.
Time Inc. continues to enter the national conversation when it publishes its influential Time Person of the Year, Fortune 500 list, Sports Illustrated swimsuit issue and People’s sexiest man alive.
For example, President Trump recently tweeted that he rejected Time’s person of the year award because of the magazine’s process for picking a winner — a statement that Time fiercely disputed. People’s pick of Blake Shelton for 2017’s sexiest man alive set off something of a social media firestorm.
Meredith has been interested in Time Inc. for years.
It was rumored to be interested in buying some of company’s magazines, including People, just before Time Warner spun off the company in 2014.
Rumors circulated again last year that Meredith was looking to buy Time Inc. just days after the magazine publisher had reportedly rejected a $1.8 billion offer by billionaire investors Len Blavatnik, Edgar Bronfman Jr. and Ynon Kreiz, all of whom have ties to Warner Music Group.
This time around, Meredith seems likely to get what it wants: Time Inc.’s board unanimously agreed to the purchase.