Earlier this year, Time Inc. said that it planned to announce the sale of a majority stake in Essence as early as the end of the year. In anticipation of that deal, I wrote an argument for billionaire private equity executive Robert Smith to acquire the majority stake. We've got one day to go in the year and Time doesn't seem to have found a taker. What's the deal?
$650M for Influence?
In November, Meredith Corporation announced that it was acquiring Time Inc. with $650M in financing from the Koch Brothers. In that time, Time Inc. has found buyers for Time Inc. UK, Sunset, and Golf, but has taken Coastal Living off the market. That leaves Essence still up for sale. One journalist has said that Essence isn't part of the deal with Meredith and that Essence's entire business is now for sale. I feel better about Essence's prospects should this be true. Why?
When news of the Koch brothers financing the deal broke, questions immediately arose about the extent to which the brothers would influence Time's editorial mission, though all stakeholders have said they will not have any influence. The US president lied about probably being Time's person of the year, but could he be right about his chances next year with this deal in place? Now think about what that kind of influence could mean for the Essence brand should Meredith retain some ownership. The Koch Brother's influence could:
- Suffocate Essence as Meredith goes through a round of layoffs to cut costs in Time's business;
- Draw resources away from Essence and directing them to other assets that could better serve their priorities;
- Try to find ways to reach African-American women in efforts to participate in the power Black women displayed in the Alabama special election and Virginia statewide races.
Who's Buying Essence?
Whether Essence's majority stake is for sale or is entirely on the market, two strong ideas come to mind for potential acquirers of the iconic brand:
- Hearst Communications. The publisher launched O Magazine with Oprah Winfrey gracing every cover. Essence could be a nice compliment to O of which African-American women are not the primary consumers.
- Discovery Communications. The mass media company launched OWN with Oprah Winfrey and announced this month that it was taking over the majority stake in the business. Discovery has stakes in a number of digital media properties and Essence would pair nicely with the OWN network which is the highest rated network for African-American women.
Oprah has bounced around in my mind as the ideal person to acquire Essence, but looking at how she's done business in the past, I don't think taking on full ownership of an enterprise is the way she operates. It would be cool to see her play a role in the business, though. What she's done with the OWN Network has been magical and I imagine she could have a similar impact on the Essence brand.
Here's to Essence finding a buyer who understands the brand and is committed to amplifying it. This year saw a lot of people in the US wake up to the power of Black women. Bozoma Saint John. Vivian Hunt. Issa Rae. Serena Williams. Tarana Burke. In a recent interview with Tim Ferris, Bozoma Saint John mentioned that she needed encouragement as she's going along doing her work. Essence is focused on celebrating black women and needs to be as strong as possible to do this important work of showing black women that we see them shining.