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Meredith Corp.’s $2.8 billion purchase of Time Inc., unveiled Nov. 26, came as a surprise to almost no one who watches the magazine industry closely. The big question, according to people familiar with the storied publishing company, was when — not if — Time Inc. was going to sell.
“They should have sold it five years ago,” a former Time Inc. executive tells The Hollywood Reporter. “They didn’t. They should have sold six months.”
Those in and around the company also are curious to see what Iowa-based Meredith does with some of the Time Inc. brands it will acquire. The conventional wisdom is that it will seek to unload news titles, including Time and Fortune, and such male-skewing brands as Sports Illustrated, three magazines that it reportedly balked at purchasing as part of a larger Time Inc. sale in 2013.
Meredith’s strength — both editorially and as an advertising offering — is service journalism for female readers, in such stalwarts as Better Homes & Gardens, Martha Stewart Living and Shape.
Meredith plans to slash costs by $400 million, but industry analyst Samir Husni expects it to wait a year or two before selling off or closing any brands. “If they can bring those magazines back to good profitability, I wouldn’t be surprised if they sell all the weeklies, including Entertainment Weekly,” he says. “It’s so foreign to the DNA of Meredith.” Insiders say EW‘s planned move from New York to Los Angeles in March will not be affected by the sale, expected to close in the first quarter of 2018.
Monthly Time Inc. titles including InStyle and Real Simple are likely to fit in with their new parent company, while Meredith CEO Steve Lacy called People an advertising cash cow and a key part of the acquisition during a Nov. 27 investors call.
Another lingering question is the involvement of conservative billionaires Charles and David Koch, who put up $650 million to back Meredith’s bid. While there’s some concern in the halls of Time Inc. about what the Koch brothers want, one employee says that “the status quo is intolerable” anyway.
The company has been hit hard by print advertising declines and unable to create new lines of digital revenue fast enough. Layoffs have become a fact of life. “I’ll take my chances with the Kochs rather than another year of starving slowly,” the employee says.
This story appeared in the Nov. 29 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.