The fact that Meredith is trying to buy Time Inc. is news, but it’s not shocking: The magazine publisher that owns Family Circle and Parents has been trying to combine with the publisher that owns People, Time and Sports Illustrated for years.
Do the Koch Brothers want their own media empire?
They’re putting more than $500 million into a bid for Time Inc. Why?
Peter Kafka covered media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.
The big surprise: Charles and David Koch, the billionaires who are a powerful force in conservative politics, are backing the bid.
The New York Times reports that the Kochs are putting more than $500 million into a deal that hasn’t closed but seems pretty far along, and could be finalized in the coming weeks. I’m told the investor group backed by billionaire Len Blavatnik, which floated an offer for Time Inc. last year, doesn’t plan to compete for the company now.
We’ll learn more about the proposed deal soon, but here’s the first, obvious question: Do the Kochs want to be investors in a media business because they like the economics? Or because they want influence?
Conventional wisdom is that Meredith has always been interested in Time’s portfolio of titles that appeal to women and the advertisers who want to reach them — People, Real Simple, InStyle, etc. — and that it either wouldn’t buy titles like Time, Fortune and Sports Illustrated, or that it would resell them once it picked them up.
The addition of the Kochs, though, adds a new twist.
Up until now, the brothers haven’t made big investments in media, unless you count the massive ad dollars put to work on behalf of their candidates and causes. Is it possible that they’re interested in owning their own publications as well?
Time Inc.’s titles don’t have anything like the reach and clout they used to have, of course. But there’s still a there there — even though Time’s revenue has been in decline for years, it still did more than $3 billion last year.
So it’s possible the Kochs are making a purely economic bet here and they believe a version of the pitch Time Inc.’s management has been making for years: We’re going to use our declining print business to build a new digital business. (Time Inc.’s digital ad revenues passed $500 million last year — a number that Time Inc. execs like to compare to BuzzFeed, which did about half of that in the same time frame.)
On the other hand, there are lots of rich, powerful men in the U.S. But there are only a handful of big, powerful media companies. If you’re trying to get your messages across to a lot of people, even a declining one might seem attractive.
This article originally appeared on Recode.net.
See More:
