A new bidder has emerged for the Time Inc magazine empire: Jahm Najafi, CEO of private investment firm Najafi Companies. Najafi’s firm is based in Phoenix, and he is a part owner of the NBA’s Phoenix Suns.
The sale process for Time Inc, owner of legacy print titles like Sports Illustrated, Fortune, and People, is moving rapidly. As recently as last week, a private investor group led by former Warner Music exec Edgar Bronfman was widely thought to be the top bidder vying against Iowa-based Meredith Corp. But this week, Bronfman’s group reportedly dropped out of the process.
Bronfman’s exit would appear to make Meredith an even likelier victor, until the Wall Street Journal reported Friday that a new group, including Najafi and private equity firm Pamplona Capital Management, “has emerged as a bidder,” citing a source. Najafi Companies does not list its investments on its web site; last year, Najafi acquired Author Solutions, a self-publishing platform previously owned by Penguin Random House.
Najafi, the Suns, and Time Inc aren’t commenting on the Time Inc bidding report; it’s possible his group won’t even bid.
But if that group does end up buying Time Inc, what would it mean for one of the company’s top titles, and one of the country’s most esteemed sports publications, Sports Illustrated?
Conflict of interest?
An NBA part owner would be the part owner of a leading sports news outlet. Such a situation could be beneficial to the magazine’s reporting, but it could also present a conflict of interest.
It might mean extra access for Sports Illustrated to the Phoenix Suns, and perhaps better access to other NBA teams. Or the opposite could happen: the Suns, in an overt effort to demonstrate no special treatment, might stonewall Sports Illustrated or give it fewer interviews.
Either way, you’d expect Sports Illustrated and SI.com to have to run a disclaimer on every single story about the Suns: “Time Inc, owner of Sports Illustrated, is owned by a group that includes the owner of the Suns,” or something similar.
To be sure, as more and more millionaires have bought up print properties, there are examples of similar blurred lines. John Henry, co-owner of the Boston Red Sox, now owns the Boston Globe; Glen Taylor, owner of the Minnesota Timberwolves, now owns the Minnesota Star Tribune.
Harvard’s Nieman Lab wrote about the phenomenon back in 2014: “Newspapers—once the most profitable, established force in many American cities—seem to be the subject of increasing interest to the owners of major sports teams… I’m sure there are other owners who—sitting on billion-dollar properties and seeing their local daily valued in the tens of millions—have at least thought about flipping over the couch cushions and seeing if they can scrounge up a down payment.”
Will the buyer break up the Time Inc titles?
The No. 2 most important question about Time Inc’s future, after “who will buy it,” is whether the buyer will buy the entire portfolio of 22 magazine titles (and a handful of digital-only brands and digital partnerships) or try to pick and choose titles piecemeal.
Last December, the New York Post reported that Hearst was interested in buying some, but not all, of the Time Inc magazines—InStyle, Real Simple, and Cooking Light “in particular.” Meredith, too, had been interested in the same titles (that is: not the news titles like Fortune and Time) back in 2014. That deal fell through.
Multiple sources at Time Inc have told Yahoo Finance that they believe the company strongly prefers to keep the company intact, with all the titles together. But if Bronfman dropping out gives Meredith more leverage, you might see Meredith get what it wanted all along: some, but not all, of the titles. Perhaps a private equity buyer, like Najafi (or someone else) would then buy the hard-news magazines that were once part of a News & Sports Group at Time Inc: Time, Fortune, Money, and Sports Illustrated.
Time Inc is also considering outside investment from private investors (likely for a majority stake), a source there says, and could still end up remaining independent and taking on no investment. The company is working with bankers from Morgan Stanley and Bank of America to review its options.
Disclosure: The author worked at Fortune, a Time Inc title, before joining Yahoo.
Daniel Roberts is a writer at Yahoo Finance, covering sports business, media, and tech. Follow him on Twitter at @readDanwrite.