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People Magazine Heads to New Ownership. Again.

Dotdash Acquires Meredith in $2.7 Billion Deal, Creating a Media Giant with People Magazine at Its Core

In a transformative move for the media industry, IAC's digital publishing arm, Dotdash, has agreed to acquire Meredith Corporation for approximately $2.7 billion, a deal that promises to reshape the landscape of both print and digital media. Announced on Monday, the acquisition will merge Dotdash's portfolio of online brands with Meredith's iconic stable of magazines, including the celebrity-focused powerhouse People, as well as lifestyle staples like Better Homes & Gardens, Southern Living, and Food & Wine. The resulting entity, to be named Dotdash Meredith, is poised to become one of the largest digital and print media companies in the United States, blending traditional publishing with modern online strategies in an era where legacy media struggles to adapt to digital disruption.

The deal, expected to close by the end of the year, underscores a broader trend in the media sector where digital-native companies are snapping up established print brands to leverage their content and audiences for online growth. Dotdash, known for its specialized websites like Investopedia, The Spruce, and Verywell, has built a reputation for producing targeted, SEO-optimized content that attracts millions of monthly visitors. By acquiring Meredith, Dotdash gains access to a treasure trove of premium content and a loyal readership that has long defined American magazine culture. People magazine, in particular, stands out as a crown jewel in the transaction. With its weekly circulation of over 2 million and a digital presence that draws tens of millions of unique visitors monthly, People has been a cultural touchstone since its launch in 1974, chronicling the lives of celebrities, royals, and everyday heroes with a mix of glamour, scandal, and human interest stories.

Barry Diller, the media mogul and chairman of IAC, which owns Dotdash, described the acquisition as a "perfect match" that combines Meredith's authoritative content with Dotdash's digital expertise. In a statement, Diller emphasized the potential for synergy: "Meredith's brands are beloved by millions, and Dotdash's technology and data-driven approach will amplify their reach in ways that were previously unimaginable." This optimism reflects Diller's long history of bold media ventures. From his days revitalizing Fox Broadcasting in the 1980s to building IAC into a conglomerate with stakes in companies like Vimeo and Angi, Diller has consistently bet on the convergence of media and technology. The Meredith deal fits neatly into this pattern, positioning Dotdash Meredith to compete with digital behemoths like BuzzFeed, Vox Media, and even larger players such as Condé Nast and Hearst.

Meredith Corporation, based in Des Moines, Iowa, has faced its share of challenges in recent years. The company, which traces its roots back to 1902 with the founding of Successful Farming magazine, expanded aggressively through acquisitions, including the $2.8 billion purchase of Time Inc. in 2018. That deal brought People, Time, Sports Illustrated, and other titles under Meredith's umbrella, but it also saddled the company with significant debt and the pressures of a declining print advertising market. The COVID-19 pandemic exacerbated these issues, accelerating the shift away from print toward digital consumption. Meredith's response included cost-cutting measures, such as layoffs and the sale of non-core assets like Time magazine to Salesforce founder Marc Benioff in 2018 and Sports Illustrated to Authentic Brands Group in 2019. Despite these efforts, Meredith's stock had been underperforming, making it an attractive target for acquisition.

Under the terms of the deal, Dotdash will pay $42.18 per share for Meredith, a premium over its recent trading price, with the transaction funded through a combination of cash and debt. IAC, which spun off Match Group (owner of Tinder) last year, has ample resources to support the purchase. Post-acquisition, Neil Vogel, Dotdash's current CEO, will lead the combined company, while Meredith's CEO, Tom Harty, is expected to step down but may serve in an advisory role during the transition. The merger is anticipated to generate significant cost savings—estimated at $100 million annually—through operational efficiencies, such as consolidating back-office functions and optimizing content distribution across platforms.

One of the most intriguing aspects of the deal is how Dotdash plans to integrate Meredith's print-heavy portfolio into its digital-first model. Dotdash has thrived by focusing on "intent-based" content—articles and guides that answer specific user queries, driving traffic through search engines like Google. For instance, Investopedia provides in-depth financial explanations, while Verywell offers health advice tailored to user needs. Applying this approach to Meredith's brands could revitalize them online. Imagine People's celebrity scoops being repurposed into searchable, evergreen content modules, or Better Homes & Gardens' recipes and home tips optimized for voice search and e-commerce integration. Dotdash has already demonstrated success in this arena; its revenue grew 25% year-over-year in the third quarter, fueled by advertising and affiliate marketing.

Industry analysts see the acquisition as a savvy play in a fragmented media market. "This isn't just about buying magazines; it's about acquiring content IP that can be monetized across multiple channels," said one media consultant who spoke on condition of anonymity. The deal comes at a time when print media is in flux. Circulation and ad revenues for magazines have plummeted, with many titles folding or going digital-only. Yet, brands like People retain immense value due to their brand recognition and ability to generate buzz. People's annual "Sexiest Man Alive" issue, for example, consistently drives newsstand sales and social media engagement, while its website features exclusive interviews and photo galleries that attract a global audience.

The merger also raises questions about the future of print. Will Dotdash maintain Meredith's physical magazines, or will it accelerate their digitization? Vogel has indicated a commitment to preserving the print legacy, stating, "Print isn't dead; it's evolving." He envisions a hybrid model where print serves as a premium product, complemented by robust digital extensions. This could include subscription bundles, podcasts, video content, and even experiential events tied to brands like Food & Wine's festivals or Southern Living's home tours.

Broader implications for the media industry are significant. The Dotdash-Meredith union creates a formidable player with over 40 brands reaching 175 million consumers monthly, including 100 million online users. This scale could enhance bargaining power with advertisers, who increasingly demand integrated campaigns across print, digital, and social media. It also positions the company to capitalize on emerging trends like e-commerce, where affiliate links on sites like The Spruce Eats could drive revenue from Meredith's lifestyle content.

However, challenges loom. Integrating two distinct corporate cultures—Meredith's traditional publishing ethos with Dotdash's tech-savvy agility—could prove tricky. Regulatory scrutiny is another hurdle; while the deal is unlikely to face major antitrust issues given the fragmented nature of media, it must clear reviews from bodies like the Federal Trade Commission. Additionally, the media landscape is littered with failed mergers, such as the AOL-Time Warner debacle, serving as a cautionary tale.

For employees, the acquisition brings uncertainty. Meredith has about 5,000 staffers, many in editorial and production roles tied to print. Dotdash, with around 500 employees, operates leanly, raising fears of redundancies. Union representatives at Meredith have expressed concerns, calling for protections in the transition.

Despite these hurdles, the deal signals optimism about the enduring value of quality content in a digital age. As Diller put it, "In a world of infinite content, trusted brands win." By uniting Dotdash's innovation with Meredith's heritage, the new entity aims to not only survive but thrive, potentially setting a blueprint for other legacy media companies eyeing digital reinvention.

This acquisition marks a pivotal chapter in the evolution of media, where old-school glamour meets new-age algorithms. People magazine, once a staple on coffee tables across America, may soon find its stories algorithmically tailored for smartphones worldwide, ensuring its relevance for generations to come. As the industry watches closely, Dotdash Meredith could redefine what it means to be a media powerhouse in the 21st century.

Read the Full The New York Times Article at:
[ https://www.nytimes.com/2021/11/15/business/media/people-magazine-dotdash-meredith.html ]