The owner of the National Enquirer was among the suitors for Time, Inc. before the company was sold to the Meredith Corporation this week and he may now get a second chance to buy a slice of the company that includes Time magazine.
David Pecker, chief executive of National Enquirer publisher American Media, Inc. wanted only Time, Inc.’s weekly titles (Time, Sports Illustrated, and People), according to Peter Kreisky, an industry analyst familiar with both Time, Inc. and Meredith. A knowledgeable source of the bidding earlier this year told The Daily Beast, “Pecker seriously wanted to make an offer.”
“AMI looked at Time only in a consultancy role for one of the bidding parties and never offered a bid,” an AMI spokesperson told The Daily Beast. “Peter Kreisky would have no knowledge of any work AMI performed. We have no interest in Time, Fortune, or Sports Illustrated, any suggestion or speculation otherwise is false and does not warrant further comment.”
Pecker himself told The New Yorker in July he wanted to buy Time, Inc. and was, as the magazine put it, looking for a “deep-pocketed partner” to do it.
Enter the Koch brothers.
They have now injected $650 million from their private equity arm into the Meredith bid that ended up as an all-cash transaction of around $3 billion.
Meredith is at pains to point out that, in theory, the Kochs are passive investors. They will not have seats on the Meredith board “and will have no influence on Meredith’s editorial or managerial operations,” it said.
But the brothers don’t need to be the news whisperers behind Time if this deal is really only part one of the plan: Meredith buys Time, Inc., keeps what it wants, and sells the rest.
“Meredith’s business model is based on monthly magazines, not weeklies,” Kreisky told The Daily Beast.
He stressed the logic of a deal for Pecker.
“The National Enquirer, US Weekly, Star and others provide Pecker with a strong, well-established business base for weekly publications. Time and other Time Inc. weeklies would not only provide massive efficiencies but also make American Media the predominant publisher of weekly titles in the nation.”
John Huey, the former editor in chief of Time Inc., told The Daily Beast: “It’s logical to assume that Meredith will dump Time and Fortune, which they never wanted. Perhaps the Kochs have already bought them, or arranged to sell them to suitable proprietors.”
The source knowledgeable with Time, Inc. said Meredith is paying what looks like a billion-dollar premium on the company’s market cap, including the contribution from the Koch brothers.
“It must have something to do with Time and Fortune,” the source said. “There’s no way the Kochs thought the investment was metrically appealing. It had to be something other than return on investment—and it isn’t Southern Living or Real Simple. David Koch went to the Time 100 dinner every year. He didn’t get a very good seat either.”
Of course, whether Meredith would want to be seen putting the weeklies, including Time, into the hands of Pecker, who is a blatant Trump propagandist, is another important question.
Throughout the election season, the National Enquirer ran stories sliming Trump’s opponents, like one cover story claiming Ted Cruz’s father had a hand in the JFK assassination. “This was a magazine that, in many respects, should be well respected,” Trump said after the story published. “I mean if that was The New York Times, they would have gotten Pulitzer Prizes for their reporting.”
In July, Morning Joe hosts Joe Scarborough and Mika Brzezinski claimed White House staffers threatened the couple with exposure of their private lives in the Enquirer.
Since Time has long been a strong force in warning of the consequences of climate change, handing it over to a pro-Trump publisher would achieve two of the Kochs’ aims in one stroke: It would silence a respected journalistic campaign and it would, if under Pecker’s direction, be transformed into a megaphone for the Kochs’ favorite causes including Trump’s ever-widening attacks on environmental regulations that the Kochs have long resisted.
One way of reading the appearance of the Koch brothers in the deal is that it fits a pattern that is only now emerging in which the Trump administration is actively attempting to rearrange the landscape of media ownership. The most salient example of this is the Justice Department’s lawsuit to block the $85.4 billion merger of AT&T and Time Warner.
This represents a significant departure from the approach taken by previous administrations, both Republican and Democrat, on mergers like this that do not involve granting a single corporation a more dominant influence over media markets.
Randall L. Stephenson, AT&T’s chief executive, is challenging the Justice Department’s lawsuit and said that it “defies logic, and it’s unprecedented.”
The politically contentious issue at the heart of this deal is the future of CNN. Trump has frequently attacked CNN as a purveyor of “fake news.”
On Nov. 15 he tweeted, “While in the Philippines I was forced to watch CNN, which I have not done in months, and again realized how bad, and FAKE it is. Loser!”
Echoing that, last weekend he tweeted an attack on CNN International, the separate division of CNN that provides news to cable channels across the world, saying that it did a poor job of representing America abroad. CNN responded that representing the nation abroad was his job, not theirs, and their job was to report the news without bias.
Many commentators have seen the action against the merger of AT&T and Time Warner as the prelude to an effort by the White House to force the separation of Turner Broadcasting, the division of Time Warner that includes CNN, from Time Warner and put it into play as an independent asset ready to be snapped up by someone more sympathetic to Trump—someone, for example, like Rupert Murdoch, the president’s best buddy among media moguls.
The problem with that theory is that a deal that landed CNN in the same corporate culture as Fox News would never pass muster in the courts or, for that matter, in Congress. On the other hand, a takeover of CNN by the Koch brothers would not raise the same problem.