Meredith buying Time Inc. with contribution of Koch brothers

Media company Meredith has acquired Time Inc. after borrowing a huge sum from Republican mega donors Charles and David Koch, who might have political interests in the deal.

To make the $1.8 billion merger of the two publication companies possible, the billionaire brothers will shell out $650 million of preferred equity.

In an attempt to play down speculations about the right-wing lobbyists’ real intentions behind the contribution, Meredith said on Sunday night that Koch Equity Development (KED), the brothers’ investment vehicle, will be given a seat on the board of the newly merged group and will have no say in editorial decisions.

“[KED] will not have a seat on the Meredith board and will have no influence on Meredith’s editorial or managerial operations,” the company said in a statement. “KED’s non-controlling, preferred equity investment underscores a strong belief in Meredith’s strength as a business operator, its strategies, and its ability to unlock significant value from the Time acquisition.”

Under the deal, Meredith will also take control over dozens of other big titles by Time Inc. such as People, Sports Illustrated, Fortune and Entertainment Weekly.

Meredith’s own magazine portfolio includes several top magazines such as Parents, Shape and Better Homes & Gardens.

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Besides the Kochs, the Iowa-based company has borrowed about $3.6 billion from an assortment of lenders to finance the deal.

The deal puts an end to the Time magazine’s struggles in the internet age. The company used to deliver a slew of weekly magazines to millions of readers over the world in its heyday.

Time Inc. grew even larger after its 1989 merger with Warner Communications to form Time Warner, America’s largest media company at the time. The publisher became independent again in 2014.

"When you combine our strong local television business ... with the trusted, premium multiplatform content creation of Meredith and Time Inc., it creates a powerful media company serving consumers and advertisers alike," Meredith President Tom Harty said.

In 2013, Meredith walked away from a similar deal with Time, saying then that it did not want some of the company’s most successful titles.

The Kochs

Charles Koch, the chief executive of Koch Industries, and David Koch have always tried to shape political discourse through funding certain organizations, universities and think tanks.

• Kochs spent $400mn on US politics

Steve Lombardo, a spokesman for Koch Industries, said the brothers did not want an active role in the new company.

“This is a passive financial investment made through our equity development arm,” Mr. Lombardo said, likening the KED’s role to that of a bank.

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