No, it’s Iowa. This is a pretty interesting move made in the magazine publishing world this week. It certainly makes Meredith, a major player in the game, much larger. Corporate headquarters for this magazine powerhouse? Answer: Des Moines.
According to reports by Folio, the industry trade journal, "Gruner + Jahr USA abruptly announced the sale of its stateside magazinesâ€”including Family Circle, Parents, Child and Fitnessâ€”to Meredith Corporation for $350 million in cash. The deal marks G+J’s departure from the U.S. magazine market." The deal is to close June 30.
"With the acquisition, Meredith becomes the second-largest consumer magazine publisher in the United States. The companyâ€™s portfolio includes over 20 magazines with a combined circulation of nearly 30 million. The deal puts Meredithâ€™s publishing revenues at $1.2 billion, an increase of $300 million, and pages at about 13,000, a gain of 60 percent," write Folio reporters Matt Kinsman, Bill Mickey and Dylan Stableford.
Even more interesting in the deal is the fate of Inc. and Fast Company magazines. Meredith, it seems, has the option to buy the titles, but according to Folio G+J will sell the titles on their own. However, if it can’t sell them in the next five weeks, Meredith has agreed to take the titles for resale, according to reports in the New York Times.
Of the two properties, Inc. seems to be the most valued. Experts predict that Fast Company will be folded into the buyer’s circulation. According to Folio’s reporting, Robert Crosland, managing director for media bankers AdMedia Partners, had this to say about Fast Company: "I would suspect that Fast Company would be the one that you just put a bullet in its brain. Thereâ€™s not a heck of a lot left.â€ Personally, I would miss Fast Company. It takes (took?) an interesting view on business, celebrating the individual creative passion that can be exersised on the job today. I will miss it if it goes, yet I can also understand why it is in trouble. That ship has passed.
One could argue there are many issues as to why this came to pass (circulation scandals, Rosie magazine folding, etc.) They simply couldn’t make it work. (One has to wonder about G+J’s relationship with Brown Printing located in my backyard, so to speak, Waseca, Minn.) While the company is said to have gotten full price for the other magazines, with Fast Company G+J is certainly going to take a loss on the transaction.
"Gruner & Jahr bought Fast Company for $550 million in 2000 from Mortimer B. Zuckerman, and bought Inc. the same year for about $200 million from the privately held Goldhirsh Group," writes Johnston, a reporter from the New York Times. "It paid $325 million to The New York Times Company in 1994 for Family Circle, McCall’s and several other titles … When the deal closes, Meredith will own three of the six remaining so-called Seven Sisters magazines. Meredith publishes Ladies’ Home Journal and Better Homes and Gardens and is adding Family Circle. Hearst owns Redbook and Good Housekeeping, while Hachette Filipacchi Media owns Woman’s Day. The seventh, McCall’s, was transformed by Gruner & Jahr into Rosie, named after Ms. O’Donnell, in 2001 and shut down the next year."