But they’re putting $ 650 million into a deal to buy the publisher
Charles and David Koch say they’re investing in the magazine business because it’s a good investment — not because they want media outlets to carry their conservative messages.
That’s the on-the-record answer to the question the media world has been asking for a couple of weeks, since we learned that the billionaire brothers were going to back Meredith’s bid for Time Inc.
Now that deal is official, and the brothers say they’re putting $ 650 million into the merged company but won’t meddle with it. From their press release announcing the deal:
“[Koch Equity Development, a Koch Industries subsidiary] will not have a seat on the Meredith Board and will have no influence on Meredith’s editorial or managerial operations. KED’s non-controlling, preferred equity investment underscores a strong belief in Meredith’s strength as a business operator, its strategies, and its ability to unlock significant value from the Time Inc. acquisition.”
It’s certainly possible the Kochs just think there’s a good deal to had here. And there are certainly other billionaires who have invested in media companies without monkeying with them: Warren Buffett has had a fondness for local newspapers. Saudi Prince Alwaleed bin Talal used to be a major investor in Rupert Murdoch’s media conglomerate.
It’s also possible that Koch’s media investment will be less expansive than it seems right now. As we said before, the next key question will be whether Meredith-plus-Time’s future involves Time, Fortune, Sports Illustrated and other titles that don’t seem to make sense in Meredith’s portfolio.
And in any scenario, the merged company is going to be slimmer than it is now. Time Inc CEO Rich Battista is supposed to leave when the deal closes — the two companies say that will happen in the first quarter of 2018 (though AT&T thought it would own Time Warner by now, too).
Battista won’t be the only employee leaving the combined company. Meredith says it can pull out “cost synergies of $ 400 million to $ 500 million in the first full two years of operation.”
Time Inc. employees, who have spent the last decade acclimating to yearly layoffs, know how some of those synergies will be achieved.