Time Inc sold to Meredith Corp for $4.04 billion with billionaire Koch brothers' backing

Like its competitors, New York-based Time struggled to reinvent itself as print advertising dries up and the lion's share of digital advertising dollars goes to Facebook Inc. and Alphabet Inc's Google.
Like its competitors, New York-based Time struggled to reinvent itself as print advertising dries up and the lion's share of digital advertising dollars goes to Facebook Inc. and Alphabet Inc's Google.PHOTO: FACEBOOK/TIME

NEW YORK (NYTIMES) - A long chapter in media history came to an unlikely close on Sunday (Nov 26) night with a sale agreement for Time Inc, publisher of prestigious magazine titles including Time, Sports Illustrated and People.

Meredith Corp – the owner of Family Circle, Better Homes and Gardens and AllRecipes – agreed to purchase Time Inc in an all-cash transaction valued at nearly US$3 billion (S$4.04 billion).

The deal was made possible, in part, by an infusion of US$650 million from the private equity arm of Mr Charles G. Koch and Mr 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. 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 Mr Henry R. Luce and Mr 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 urbanised world.

Meredith, based in Des Moines, Iowa, is a Midwestern publisher through and through. Its founder, Mr Edwin Thomas Meredith, entered the media business in 1902 with a magazine called Successful Farming.

But as Meredith has stood relatively strong, Time Inc has stumbled. The company failed to keep pace as the industry-wide transformation from print to digital rendered old methods of magazine-making obsolete.

Mr Charles Koch, chief executive of Koch Industries, and Mr David Koch have long sought to shape political discourse through their support of non-profit organisations, universities and think tanks.

But in its announcement of the deal, Meredith said that the private equity fund, Koch Equity Development, would not have a seat on Meredith’s board of directors and would “have no influence on Meredith’s editorial or managerial operations". 

Mr Steve Lombardo, a spokesman for Koch Industries, also said that the Kochs had no plans to take an active role in the expanded company.

Meredith said it expected its deal for Time Inc would result in US$400 million to US$500 million in cost savings in its first two years.