Meredith Corp.'s merger talks with Time Inc. fell apart just two months ago, but now Meredith CEO Stephen Lacy can partly save face. Today, the publisher announced it would buy Bonnier’s Parenting and Babytalk magazines and their related digital assets. And while Meredith didn't state this detail explicitly in its statement, Bonnier confirmed that Meredith would be shutting the magazines down. Some 68 people will be impacted; another 12 people who worked at the brands may find other jobs at Bonnier.
The deal fits squarely with the Meredith playbook; the Des Moines publisher and broadcaster has styled itself as a media and marketing company that reaches women, which is a mass play. Meredith already dominated the parenting magazine category with Parents, to which it tacked on Disney’s FamilyFun in 2012.
With this newest deal, Meredith effectively ties up the category, but that's about all. Parents and Parenting have a fair amount of overlap in their audiences. The magazines are high-circulation, low-CPM titles; the audience turns over regularly; and the Internet is proving a more efficient way to get that information. As the No. 2 title, Parenting has proven to be a difficult title for Bonnier. CEO Dave Freygang admitted that Parenting hadn't made money since 2007, the year Bonnier bought it as part of its big Time4 Media acquisition from Time Inc. "We were never able to get out in front of the parenting decline," he said. "It’s a challenging market. Service is competitive, and Meredith is a very formidable competitor.” Meredith itself doesn't expect to get a big bump in circulation from the acquisition, as it's not going to increase Parents' rate base guarantee.
The Parenting deal continues Meredith's acquisition spree, the publisher having also added big food properties like Every Day With Rachael Ray and AllRecipes lately. Bonnier, on the other hand, has been winnowing its footprint in the past few months. Bonnier just sold its snow sports group to Active Interest Media and has folded some small, unprofitable titles. The Sweden-based company is taking pains to say it’s not folding up its tent and abandoning the U.S., though. Freygang said the moves were necessary to get Bonnier back to profitability this year and that he foresees no more closings or sales.
"It was a financial decision," Freygang said. "My goal was to create a foundation that would get us back to revenue growth and sustained profits. We really analyzed the portfolio, and the brands we’ve shut down and sold are the ones that were the most challenging for us. It’s a smaller company but still significant."