Time Inc. finally gives Meredith the ‘yes’ to purchase its business
The sunset of printed magazines has been imminent for many years now, as the internet continues to take more and more ground each day. A continuous fall in subscriber’s figures, along with the migration of advertisers towards more digitally-oriented marketing tactics has been hitting the industry and, as a result, struggling media companies are doing their best to keep their heads above the water.
This situation was clearly illustrated recently, after The Meredith Corporation, a large media and marketing services company, announced the purchase of Time Inc., the prestigious company that holds premium brands such as Time Magazine, Sports Illustrated, and People.
The deal came through after a few years of going back and forth with negotiations, and it has been settled at $2.8 billion, with the help of the Koch brothers, the billionaire founders of Koch Industries, who decided to back the deal by purchasing $650 million in preferred equity to help fund the operation.
The deal surprised many, as only a few months ago, the company’s CEO Rich Battista ruled out the possibility of selling the company during an interview he participated in, mentioning that “The focus right now is on executing on this plan and moving forward”.
Even though Battista’s words were very optimistic about the company’s future, challenges were surely ahead after this decision, as the company was facing severe job cuts and declining revenues, mostly due to the fact that they rely heavily on their printed business, which brings almost two-thirds of its revenues.
In a statement released by Meredith, the company pointed that they were “creating a premier media company serving nearly 200 million American consumers across industry-leading digital, television, print, video, mobile, and social platforms positioned for growth”.
It is difficult to say how those poetic words will turn into real business in the near future, but that’s what marketing is all about right? Making things look better than they are.
As the printed-media business continues to surf the challenges of the digital era, we will likely see similar deals may take place in the near future. The ‘let’s stick together’ movie-like strategy is usually the best one to remain alive during difficult business seasons.
Time Inc., definitely knew when and where to look for help to keep its businesses up and running. The question would be, do you know where to go when you need funds?
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