Time and Meredith: Will they mesh?

by
Meredith

The New York Times ran an interesting story Monday about the merger of Time Inc. and Meredith Corp. The basic premise of the story is that Meredith is the good, frugal, honest Midwest firm while Time is the greedy, bloated and wasteful New York publishing giant.

Without actually coming out and saying it, the prediction is that the culture clashes will be too great for the combined firm to succeed.

Here are a few excerpts from the story:

Meredith’s headquarters in Des Moines have an open floor plan; the executives have their offices on the first floor and favor early-morning meetings. A recent lunch at one of Meredith’s magazines featured kale salad and rosemary-infused cucumber lemonade. Time executives tend toward lunches at Michael’s, where the dry-aged steak is a highlight, and after-work cocktails at the Lamb’s Club.

And then there are the postrecessionary approaches to travel: Meredith’s chief executive turned its corporate jets into shuttles with open seating, while Time still allows staff members to expense hotel rooms at the Four Seasons.

“It’s like the Yankees’ farm team taking over the Yankees,” according to a current Time Inc. executive who, like many who talked about the merger, declined to be identified while criticizing bosses or potential bosses.

The merger news appears to be more troubling to employees at the long revered Time Inc., whose lucrative titles like People and InStyle have been essentially sold off by Time Warner and are likely to be overseen by Meredith’s chief executive, Stephen M. Lacy. Time Inc. employees have made cracks about Des Moines and shared more sobering fears about the merger.

While Time executives privately characterized Meredith executives in the past week as being cheap on everything from compensation to their magazines’ spending on paper stock, former Meredith executives say the company merely spends wisely.

While public filings do not reveal the salary of Time Inc.’s chief executive, Laura Lang, Mr. Lacy makes an annual base salary of $950,000 as Meredith’s chief and has total compensation of $5.8 million including stock awards. Mr. Griffin said that when he worked at Meredith, the company focused aggressively on spending judiciously and weathering the recession.

“There’s a difference between spending and investing, and Meredith has aggressively invested,” Mr. Griffin said. “There really is a sense we’re all in this together.”

Time, which its former executive Ed McCarrick described as “the Harvard of the publishing business,” has followed a very different trajectory. Nancy Williamson, who worked for the company from 1959 to 1989 at Sports Illustrated, Time and People, described how the company evolved from a news organization investing in serious journalism to a much fatter company.

“Greed came to the company in the ’90s,” she said. “It was just a huge company: huge bonuses, huge salaries, stock shares for the big guy, not the little guy.”

Jim Kelly, a former Time Inc. executive, stressed that the company had tried to address its costs for years and added that “Time has had more restructurings than Angelina Jolie has tattoos.”

There were some parts of the story that were critical of Meredith, such as this one, but it still shifted back to a positive spin.

In recent years, Meredith has actually fared worse than Time in terms of advertising pages for its monthly titles. Craig Huber, an independent research analyst with Huber Research Partners, noted that Meredith performed better during the recession, then dropped off relative to its competition as the economy improved. But he added that Meredith has continued to expand its magazine business while Time Warner shifted its focus elsewhere.

“Meredith has been willing to invest in small acquisitions that Time Warner has been trying to get out of,” he said. “Time Warner is focused on the rest of their business, all of their entertainment business, whereas Meredith only has magazines and TV stations.”

Meredith has also focused on bringing in new sources of revenue from events and custom publishing around their magazine titles, according to Reed Phillips, a managing partner for DeSilva & Phillips, a media banking firm. He said that Mr. Bewkes believed that “under Meredith’s management, with their ability to monetize marketing services for the Time Inc. magazines,” the magazines would be “better off and more profitable.”

While I appreciate the idea and the sentiment behind the story, I think it could have been a little more balanced.

The deal is happening, and it seems that there must be something good about Time Inc. I just had a hard time finding it in this story.