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November 28, 2017

time magazine gets a new owner after 94 years ,gets sold to Meredith Corp

"time magazine sold to Koch brothers investment arm"
Time Magazine,Sports Illustrated and People have been sold to Meredith Corp, backed by the Koch brothers

A long chapter in media history came to an unlikely close on Sunday night with a sale agreement for Time Inc., the publisher of once-prestigious magazine titles including Time, Sports Illustrated and People.The Meredith Corporation — the owner of Family Circle, Better Homes and Gardens and AllRecipes — agreed to purchase Time Inc. in an all-cash transaction valued at nearly $3 billion. 

The deal was made possible, in part, by an infusion of $650 million from the private equity arm of Charles G. and David H. Koch, the billionaire brothers known for using their wealth and political connections to advance conservative causes.Meredith’s deal is backed by Koch Equity Development, the investment arm of Koch Industries, an industrial conglomerate rooted in the oil and gas business. 

According to Meredith, KED will not have a seat on its board, and will have “no influence on Meredith’s editorial or managerial operations.”Charles and David Koch are supplying $650 million of that cash, raising fears that they will want to use the magazines, especially Time, to spread their conservative views — just as founder Henry Luce did in the 1930s and 1940s.

The Koch brothers have become controversial figures for their lavish spending to back political candidates and causes, most of them conservative. By some estimates, the pair spent nearly $1 billion during the 2016 federal election cycle. There is speculation that the brothers are diversifying their investments into media to have greater influence in culture and shaping popular opinion on issues such as tax policy and climate change. Meredith Corp., a magazine publisher, and broadcast company will acquire Time Inc. in a deal totaling $2.8 billion, 

Meredith said in the statement the deal had been approved by both firms’ boards of directors and is expected to close in the first quarter. Meredith will pay $18.50 per share of the publicly traded Time Inc., a 46% premium over the closing price on Nov. 15, before reports of the acquisition surfaced. Meredith chairman-CEO Stephen Lacy emphasized that the combined reach of the two companies would exceed 200 million consumers. 

The enlarged company would generate about $4.8 billion and adjust earnings of $800 million. Meredith said it expects to generate $400 million-$500 million of savings from streamlining operations during the first two years. 

When Meredith first tried to buy Time Inc. in 2013, it did not want to include Time, Fortune, Money or Sports Illustrated in the deal. However, there are already rumors that Meredith plans to shut down Time.

Meredith publishes magazines for the heartland, like Better Home and Gardens, Family Circle and Ladies Home Journal. The Time Inc. magazines it likely covets are titles like In Style and Real Simple that it can market to its subscriber base. 

At its peak in the late 1990s and early 2000s, Fortune was making, pre-tax, upwards of $110 million — we even spent $5 million one year taking the entire staff to Hawaii. Time magazine made in the $100 million range, People made over $400 million, and Time Inc. had earnings that came in a hair under $1 billion. The idea that it would all come to an end one day was unimaginable. 

Time was founded by Henry R. Luce and Briton Hadden in 1923, who had worked together in their college days at the Yale Daily News. Together they hatched the idea of a fast-paced weekly that would capture an increasingly hectic and urbanized world.They first called the proposed magazine Facts. They wanted to emphasize brevity so that a busy man could read it in an hour. They changed the name to Time and used the slogan "Take Time–It's Brief.

Time has the world's largest circulation for a weekly news magazine and has a readership of 26 million, 20 million of which are based in the United States. In mid-2016, its circulation was 3,032,581 having fallen from 3.3 million in 2012. After the successful start of the business magazine Fortune in 1930, Luce added Life magazine to Time Inc.’s growing stable and transformed it into a wide-ranging general interest magazine that made use of glorious photography to capture movie stars, world leaders and exotic, far-flung places. In the middle of the 20th century, Time Inc. even had its own film arm, with “The March of Time” series of news shorts that played in movie theaters before the main feature.