In early 2018, business readers couldn’t avoid stories about Meredith Corp. and its heady acquisition of Time Inc. It was the little guy taking on the giant in the industry, a $2.8 billion deal that had been a few years in the making.

Among the stories was this from What’sNewInPublishing.com: “The air in Des Moines is thick with excited talk of the ‘transformative deal,’ even though the sheer diversity of Time Inc. sits uneasily with Meredith’s long-standing claim that ‘Our cornerstone is knowledge and understanding of the home and family market.’ Steve Lacy and his team have no need to be dazzled by taking over some of America’s best-known magazines because — in Better Homes & Gardens — they already own the country’s most profitable one. And their global leadership in retail licensing says it all.”

The story continued: “In a year when media consolidation will never be far from the minds of investors and executives alike, competitors will be watching Meredith closely. If the quiet achievers from Iowa really can unlock the digital and retail riches of Time Inc., there will be plenty of other candidates for merger. Could Hearst, whose magazine-media is now a challenged mid-portfolio operation, be motivated to merge its magazines with those of frenemy and sometime partner Condé Nast? If Meredith-Time makes it, even Condé-Hearst could be a cake-walk.” WhatsNewInPublishing.com in an article last January (https://bit.ly/2PyUzXv).

The deal proceeded, and now business readers see headlines of how Meredith, a longtime Des Moines business and employer of hundreds, will sell off some of Time’s best-known assets such as Time, Sports Illustrated, Money and Fortune. 

The Business Record took note when the American Marketing Association Iowa Chapter announced an event at which Meredith Executive Chairman Lacy would be the keynote speaker on “The Evolution of Meredith.”

Here are several takeaways from listening to Lacy at that luncheon at the Des Moines Golf and Country Club on Oct. 3:

1. The Time Inc. acquisition moved Meredith into bigger leagues in several ways, including in search results, direct marketing and several categories of media the company had not been in before, such as entertainment or luxury travel, Lacy said.

“This acquisition moved us dramatically, from a digital perspective, from kind of layer No. 23 or 24 to the top 10,” Lacy said. “Because that content tends to be sold in more of a distributed fashion, the larger your audience the bigger your opportunities for bigger ad play.”

2. The business now has seven categories for its content, including new areas such as entertainment/fashion, led by People magazine, “which is the largest multiplatform media brand in the world,” Lacy said. “That was the crown jewel of the acquisition of Time Inc. We were not in the entertainment and fashion business to any extent,” he said.

The media company now sits at the top of most categories with its offerings. “It’s important to be the No. 1 or 2 player in your competitive set because they get all the money and everybody sort of gets table scraps,” Lacy said.

He used the food category as an example.

“We always, as legacy Meredith, led the food category without question. With the addition of AllRecipes about five years ago, we led the food category on every single media platform,” Lacy said. He added that the Time deal brought some other strong brands into the stable, such as Cooking Light and Real Simple. 

3. Meredith’s focus remains on home and family. A 2005 acquisition set Meredith up to own that category. “If you don’t have children and you don’t have a home, you’re not all that interested in what we do. And no matter who or what brand we would be doing, consumer research shows every woman’s No. 1 priority is her children. We learned that kind of the hard way. We made those acquisitions so we could lead in that parenting category. 

Lacy continued: “We always led in home. Better Homes and Gardens is the largest monthly magazine brand in the world. People, of course, is weekly. With a lot of other wonderful supporting brands, including our latest launch, which is Magnolia Journal by Chip and Joanna Gaines. They are fantastic partners. This was the most profitable launch of anything we’ve ever done in our 110- or 115-year history.”

4. People magazine’s start provides a nice story about the power of research. Lacy explained: “The story in the People brand is that back in the early 1970s a really smart creative who worked on Time magazine did some editorial research. In those days the last page before the back cover of Time magazine was “People.” As she did that research, she found that was in fact the most popular page or most popular column in Time magazine. The story is you think about just tearing the back page out of Time magazine and creating what became without a doubt the largest, most profitable media brand in the world. … Even today every 1.5 seconds People magazine is sold somewhere in the United States.”

5. Branded content is a big deal. Meredith has 4,000 products in just about every Walmart in the U.S., selling $2.7 billion of Better Homes branded product. “And at $2.7 billion, I always love to say, that’s a hell of a lot of sheets and towels. It makes us the second-largest brand licenser in the world behind Disney. Only Disney does more than little old Meredith,” Lacy said.

6. What’s next is selling the brands that are more time-sensitive. “What are we about at this point in time? First and foremost it’s successfully integrating the Time Inc. business. I was the fifth CEO of Meredith in 115 years. Unfortunately, Time Inc. had six CEOS in the last seven years. Very problematic for the creative folks, very problematic for the sales and marketing. … Their performance really suffered. So we probably wouldn’t have been able to get the deal done absent that. But we have a lot of work to do to improve the advertising performance, to improve the profitability of their digital activities.”

“We have decided to divest four businesses. They are the businesses that look the most like the newspaper business. The brand Time, Sports Illustrated, Fortune and Money. Those are the businesses that create time-sensitive information, which in all sincerity is not best consumed in print.”

7. Lacy admitted the one thing that keeps him up at night is the $3 billion — “with a B” — in debt needed for the deal. Paying that down is a top priority.