On Sunday, Midwest-based publisher Meredith inked a deal to buy out Time, Inc. — the company behind mags like Time, Sports Illustrated, Fortune, and People — for $2.8B in cash.
But the deal came with a twist that has alarm bells ringing across the media world: about ¼ of the funds ($650m) came from Charles and David Koch, billionaire brothers who’ve used their clout to support and promote conservative causes.
A tale of two publishers
Launched in 1930 with the vision of capturing the hectic nature of the urbanized world, Time, Inc. now owns more than 100 magazines brands and 60 digital properties. But, in recent years they, like other old-school publishers, have fallen on hard times.
Meredith comes from a different world: best-known for publications like Better Homes and Gardens and Midwest Living, the company has able maintained a more niche, but loyal readership.
They’ve tried to buy out Time, Inc. twice before (once in 2013, and again earlier this year) but were unable to secure enough funding…
Until the Koch brothers came along
Meredith maintains that the $650m investment from Koch Industries will not give the brothers seats on the board, or any power to influence editorial content. (A spokesman for the Koch bros called it a “passive investment” that is strictly a “moneymaking opportunity.”)
But on paper, Time doesn’t seem like a killer investment — and some believe the move is more of a power play to gain political influence through Time’s millions of readers and robust consumer data.
Per Axios, there is nothing in the companies’ 84-page merger agreement that explicitly relegates the Koch brothers to “passivity.”
In the short term, this does bode well for Time, though: when the news broke, their stock hit a 6-month high.
