SOURCE: NBC News
Meredith, a Midwestern staple, prepares to slash costs at New York’s Time Inc.
Meredith Corporation, based in Des Moines, Iowa, and owner of home-oriented magazines like Better Homes and Gardens and Family Circle, is about to take over New York-based Time Inc.
Let the culture clash begin, along with significant cost-cutting.
The $2.8 billion acquisition, backed by the Koch brothers, was formally announced on Sunday.
On a conference call with analysts, Meredith executives said they will review the magazines in Time’s portfolio with an eye on potential sales, possibly enough to generate up to $500 million in cash. Executives have also hinted that ending Time Inc.’s lease on office space in Battery Park City in downtown Manhattan is one possibility for cost savings, while other options include eliminating duplicate employees.
Reed Phillips, managing partner at the investment bank Oaklins, DeSilva & Phillips, said one of the main differences between the two companies was salaries.
“A Time Inc. editor might earn a million, where a Meredith editor might earn half of that,” he said. “They can take out costs in circulation, production and accounting. They can also eventually reduce salaries and get them more in line.”