The sale of Meredith Corp. to Barry Diller’s InterActive Corp. will go down as one of the fastest and most spectacular reversals in magazine-industry history.
The $2.7 billion deal comes less than four years after Meredith’s transformative 2018 acquisition of Time Inc. in a $2.8 billion transaction, which created the largest magazine-media company in the U.S. and one of the largest in the world.
With the IAC deal, Meredith’s media brands will be rolled into IAC’s Dotdash digital publishing unit. Dotdash CEO Neil Vogel will lead the combined company.
At the time of the January 2018 Time Inc. deal and later, Meredith executives extolled the prospects of the newly combined giant. “I couldn’t think or come up with another deal that I thought mattered as much to the future of the Meredith Corporation,” then-CEO Steve Lacy said of his 116-year-old company in March 2018, just two months after the Time Inc. sale closed.
And then, in February 2020, two years after the acquisition, President and CEO Tom Harty opened a quarterly earnings call saying the Time Inc. integration was largely complete, leaving the company in “the strongest competitive position in its history.”
As recently as earlier this year, Harty remained bullish, calling the $2.7 billion sale of Meredith’s television stations in May an “historic day,” and casting that sale as a way to strengthen Meredith’s core business: Its magazine media franchises.
“As a more focused company with an enhanced balance sheet and cash-generating media assets, we will further advance our position as a media leader with trusted brands, a digital business of scale, and unparalleled reach to women," Harty stated. “This transaction will allow us to sharpen our focus on the potential of our brands and assets.”
So what happened? Harty was once quoted as saying anything is for sale at the right price, and the $2.7 billion IAC is paying represents a significant return after factoring in Meredith's divestment of Time Magazine for $190 million, Sports Illustrated for $110 million, and Fortune for $150 million.
Beyond that, the nature of media has changed, and even optimistic rhetoric can’t change the fact that magazine-related media, particularly print, is not viewed as a growth area.
“We do not expect to see any material changes in efficacy with the consolidation,” Digitas/LBI's Marla Theodore said at the time. “The decision is not one that showcases innovation against its magazine competitors and feels late to the party of continued transition from print to digital.”
And a December 1, 2017, the Des Moines Register report included a foreboding observation from Margot Susca, a lecturer at American University's School of Communication. She said even fans of Time Inc.’s brands shouldn’t rule out bigger problems on the horizon. Corporate media constantly buys and sells. “It's just pieces flying around, companies broken apart, pieces being sold,” she said. “I'd expect this isn't going to be a marriage that lasts for very long.”