Ad Practitioners LLC, the Puerto Rico-based owner of digital properties including ConsumersAdvocate, has bought the Money magazine and digital brand from Meredith Corp. Meredith had acquired Money as part of its $2.8bn purchase of Time Inc last year.
Terms of the deal were not disclosed but the price is believed to be just over $20m – ironically almost double what Meredith had earlier been seeking.
The deal came as a something of a surprise after Meredith had withdrawn Money from sale in April – and even sold some parts of the subscriptions list to the UK-owned Dennis company which publishes The Week and the Kiplinger financial newsletters in the US.
Money’s last print issue was in June/July 2019. Meredith said then: “We are going to invest in the digital Money. com brand site itself, as well as leverage the Money content across our portfolio.” In July, it launched the Dollar Scholar newsletter for millennials. According to comScore, Money. com has 4m monthly uniques.
Meredith had been making disposals as it sought to pay down debt and – is now fighting to restore investor faith after disappointing post-acquisition results from the enlarged company. It had sold Time, Sports Illustrated, and Fortune magazines for a total of $450m (at least 20% lower than once speculated).
Contrary to its plans at the time of the Time Inc deal, Meredith is now preparing to explore a sale of its local US broadcast stations, reportedly after an unsolicited approach from private equity firm Apollo. It is believed that the 17 stations (which had EBITDA of $223m in 2018) could be valued at $2bn – more than the market cap of Meredith Corp whose shares have lost one-third of their value in the past year.
Meredith’s sudden decision to sell the remnants of Money (once said to be worth $400m in the magazine’s heyday) and now its TV stations reflect pressure to restore shareholder value damaged by what looks like the over-priced Time Inc deal. They might also imply further disappointing results are in the pipeline. Earlier this month, Meredith announced closure of the print edition of the 87-year-old Family Circle magazine and there are rumours of further cutbacks. The vibes are not great.
A notably high price for Meredith TV (which, after all, is expecting an earnings boom in the 2020 election year) might calm investor fears. So would some kind of good news about People. The celebrity weekly (perhaps America’s most profitable magazine) has, inevitably, become Meredith’s rationale for buying Time Inc. The only other former Time Inc. brands that Meredith still owns are: InStyle, Travel + Leisure, Real Simple, and Entertainment Weekly (now a monthly). Put like that, the 2018 acquisition does sound odd for a company that had built its reputation on monthly women’s lifestyle and home magazines.
It is easy now to question why Meredith ever got sucked into bidding for the decaying Time Inc. But the newer question is: Which modern media company would double down on magazines rather than balance them with the resilient earnings of US local TV? The once so sprightly Iowa publisher of Better Homes & Gardens, which has spent 10 years upstaging its big city rivals, is fighting to regain its confidence – and that of investors.
Equally challenging, though, may be the law suit which claims Meredith had failed to tell investors that “the Time, Inc. acquisition was not as profitable as the company had claimed”. It notes that Meredith’s reduced earnings statement falls well short of its August 2018 forecast of “generating $1bn of EBITDA in fiscal 2020.” Tough times.