Finance

People Magazine Heads to New Ownership. Again.

People who read People magazine were treated last week to one of its most anticipated annual features: Sexiest Man Alive!

This year’s nod went to the 52-year-old actor Paul Rudd, who told the magazine that he anticipated some changes in his life, now that he is officially sexy, including dinner parties with George Clooney and more yachting excursions. “And I’ll probably try to get better at brooding in really soft light,” he said.

While the magazine is still delivering the well-executed celebrity coverage and other stories its loyal readers have come to expect, People’s staff is in limbo, facing the uncertainty of yet another ownership change.

Dotdash, a New York company specializing in digital media, reached an agreement last month to acquire Meredith, the publisher that owns People, for $2.7 billion. When the deal goes through, People will have its second new owner in three years. The expected merger will create a media giant, called Dotdash Meredith, led by the Dotdash chief executive, Neil Vogel.

Executives on both sides of the deal have described it as a peanut-butter-and-chocolate corporate merger: Meredith, a Des Moines, Iowa, magazine giant founded in 1902, has the content that appeals to readers all across the country; Dotdash has the digital know-how.

Dotdash is a division of InterActiveCorp, the company behind the dating apps Tinder, OK Cupid and Match. It is relatively new to lifestyle journalism, though, having gotten its start as the reference website About.com.

Dotdash now has 14 online publications, including Serious Eats, TripSavvy, Investopedia, Verywell Health and Lifewire. Readers visit them when they are about to decide what to cook, where to stay, how to invest. The sites are information resources, often different in tone from most of the roughly 40 publications housed by Meredith, a roster that includes Better Homes & Gardens, Real Simple, Food & Wine and Southern Living.

Meredith, a magazine giant founded in 1902, became People’s owner in 2018, after buying Time Inc. for nearly $3 billion.Credit…Charlie Neibergall/Associated Press
Neil Vogel, right, the chief executive of Dotdash, will lead the new Dotdash Meredith when the two companies merge.Credit…Getty Images

Mr. Vogel, the Dotdash chief, singled out People as a key to the deal in a call with investors last month. Under new ownership, he said, People would become more of a digital powerhouse, helping Dotdash Meredith reach 180 million readers a month. With an audience of that size, Dotdash Meredith would be a serious competitor to Facebook and Google for digital advertising dollars, he argued.

But Mr. Vogel acknowledged that People and another Meredith magazine, Entertainment Weekly, might not seem like logical fits at first glance. They are “not as intent-driven as the rest of the things we do,” he told investors — meaning they are not as likely to be visited by readers in search of practical information, Dotdash’s stock in trade.

Aileen Gallagher, a professor of magazine journalism at Syracuse University’s Newhouse School, questioned whether the addition of People made sense for its next owner. “The rest of the Meredith publications, I can see where they fit into Dotdash’s portfolio,” she said. “People is a tough call.”

Unlike Dotdash’s titles, People is centered on a weekly print magazine, a top seller at supermarket checkout lanes. People’s average paid print circulation, nearly three million, is higher than that of any other magazine other than Better Homes & Gardens and two publications from AARP, according to the Alliance for Audited Media.

IAC executives said there were no immediate plans to scrap the print editions of the Meredith magazines but they expected print media’s broad decline to continue. “We’re going to carefully manage the print business,” Tim Quinn, Dotdash’s chief financial officer, said on the investors’ call. “We think there’s an opportunity to focus on the top titles and quality subscribers.”

In an interview, Mr. Vogel declined to discuss People directly, because the merger has yet to close, but he said that Dotdash sees value in content with broad appeal. “We’re not trying to build audiences and sell ads, though it is ultimately what we do,” he said. “We’re trying to build relationships with people, where they come to us.”

Time Inc., a dominant force in American publishing of the 20th century, runs deep in People’s DNA. The magazine was founded in 1974 as spinoff of a one-page feature in Time, called People.

“There is nothing abstract about our name,” Richard B. Stolley, the founding editor, wrote in a letter to readers in the first issue, which had Mia Farrow on the cover. “People is what we are all about.”

Crisply written and personality-driven, People was an immediate sensation, despite the snickers of some Time journalists who dismissed it a gossip rag, and it turned a profit within 18 months.

“People really anticipated, captured and ushered in the rise of celebrity culture in America,” Ms. Gallagher said.

Larry Hackett, People’s top editor from 2006 to 2014, said the combination of stories on celebrities and ordinary people was a key to its success. “The beauty of the magazine was that mix,” he said. “It was not the most important stuff, but it was always very interesting.”

People developed Best & Worst Dressed and other franchises; presented the homey side of one White House family after another in dispatches from its Washington bureau; and chronicled the ups and downs of Jennifer Aniston, Brad Pitt and Angelina Jolie. It was a perennial Time Inc. cash cow, responsible for 20 percent of company revenue as late as 2014.

“If we didn’t sell a million copies in a week on newsstands, someone would want to talk to me,” Mr. Hackett said.

With the rise of digital media, Time Inc. struggled to adjust. Meredith swooped in with an offer of $2.8 billion in 2017. On Jan. 31, 2018, workers pried the Time Inc. sign off the company’s Manhattan headquarters and replaced it with the Meredith logo. The company later sold off some of the big Time Inc. properties — Time, Sports Illustrated and Fortune — but hung on to People.

A few months after the acquisition, Meredith elevated Dan Wakeford from deputy editor to editor in chief of People. Under Mr. Wakeford, People has continued an emphasis on digital media. From 37 million print and digital readers in 2018, according to the magazine’s media kit, it now has more than 65 million digitally, according to Comscore. (Meredith declined to comment for this article.)

Ms. Gallagher, the journalism professor, said that People’s challenges include the rise of smartphone usage, which has cut into the audience for print magazines, as well as the coarsening of celebrity coverage, which contrasts with People’s more journalistic tone.

The magazine’s editorial staff has remained in Manhattan since Meredith took over. In a staff memo this month, Tom Harty, Meredith’s chief executive, said the merger was on track to close by year’s end.

Kitty Bennett contributed research.

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