Sale of Meredith TV stations approved; magazine division sale set to close this week

·3 min read

Meredith Corp. shareholders approved the sale of the Des Moines-based media company's broadcasting division Tuesday — a transaction that clears the way to complete what the company said will be the sale this week of of its magazine holdings to New York tech conglomerate IAC/Interactive Corp.

A majority of shareholders voted in favor of the $2.8 billion deal with Gray Television during a closed meeting, Meredith announced in a news release. Gray will take over Meredith's 17 local TV stations, including channels in major markets like St. Louis, Kansas City, Missouri, and Atlanta, Gray's hometown.

The sale has a limited impact on local employment, as only five of Meredith's 870 Des Moines-based workers are in the television division. Gray executives have not said whether those employees will remain in the city.

The deal, however, is the prelude to the IAC/Interactive sale, which will have a larger impact on Des Moines. Meredith will spin off its magazine division into a separate company, which IAC/Interactive will buy for $2.7 billion. IAC/Interactive will combine Meredith's division with an IAC-owned online publisher, Dotdash, to form Dotdash Meredith, with headquarters in New York.

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The Meredith Corporation downtown Des Moines campus on Monday, Sep. 27, 2021.
The Meredith Corporation downtown Des Moines campus on Monday, Sep. 27, 2021.

Meredith said in a news release that executives expect the IAC/Interactive sale, which does not require shareholder approval, to close Wednesday. The company did not immediately disclose how many shareholders approved the Gray sale.

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Former studio executive Barry Diller formed IAC/Interactive as a tech incubator that cultivates Internet companies and spins them off into separate entities. Some of IAC/Interactive's recent successes include the video streaming site Vimeo and the online dating company Match Group, owner of Tinder and OKCupid.

IAC/Interactive executives told investors in October that the purchase of Meredith's magazines gives them the ability to inject their tech expertise into publications with decades of name recognition. Meredith's titles include marquee brands like Better Homes and Gardens, People, Entertainment Weekly, Southern Living and Food & Wine.

Dotdash's business model is based on "intent-driven" journalism. The company publishes lifestyle articles that attract readers searching online for suggestions on everything from Thanksgiving recipes to new hairstyles. Current titles include The Spruce, VeryWell and Investopedia.

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Unlike some publishers, Dotdash sells limited advertisements on each article. It aims to make the websites load as quickly as possible, telling investors that the uncluttered, convenient design holds readers longer, allowing the sites to rank higher on Google searches.

As a result, the company says it can sell ads at a premium because of the high number of readers. And instead of using Internet tracking tools like third-party cookies to track site visitors, Dotdash sells ads similar to the content — an ad for barbecue sauce on a story about the best barbecue recipes, for example.

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The company also receives money from retailers when readers click on links from a Dotdash site to buy a product featured in an article.

Dotdash CEO Neil Vogel will lead the company, marking the end of Meredith's history as a company based in Des Moines, where it was founded in 1902.

Last month, a Meredith employee told the Iowa Economic Development Authority that the sale to Dotdash would result in "some job losses at the Des Moines office." But when the Des Moines Register asked about the note, Meredith spokesman Mike Lovell sent a second letter to the authority, clarifying that the publisher doesn't think the sale will result in cuts.

"Des Moines will continue to serve as an important operational hub for Dotdash Meredith's digital and magazine activities," Lovell wrote.

Tyler Jett covers jobs and the economy for the Des Moines Register. Reach him at tjett@registermedia.com, 515-284-8215, or on Twitter at @LetsJett.

This article originally appeared on Des Moines Register: Meredith Corporation's sale of TV stations wins shareholder approval

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