That Charles and David Koch are putting $650m into Meredith Corp’s purchase of Time would ordinarily be cause for great soul-searching in media. But these are not ordinary times.
Meredith’s Koch-backed deal with Time – which owns, in addition to Time magazine, titles including People, Fortune and Sports Illustrated – was sealed Sunday night. Meredith said in a statement announcing the deal that they are building “a premier media company serving nearly 200 million American consumers.”
Observers of Koch Industries, a longtime supporter of libertarian and conservative causes, especially generous with funding for climate denial through thinktanks and research groups, say more than business is at stake.
ProfileWho are the Koch brothers?
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The Kochs are billionaire US brothers noted for their control of oil-and-gas giant Koch Industries, the second-largest privately owned US company – and for their anti-regulatory politics. Charles and David Koch (pronounced "coke") head up the $115bn company, and are well known for their quiet financial support of conservative causes, through such groups as Americans for Prosperity, a key player in the Tea Party movement. They share the No 8 spot in Forbes' list of the world's richest people.
The brothers inherited the company from their father, Fred Koch – who made his fortune in the 1930s building oil refineries for the Soviet Union under Joseph Stalin – and grew it into a multinational giant that now includes a broad array of consumer products, such as paper towels.
David Koch, New York City's richest resident (ahead of Rupert Murdoch and former mayor Michael Bloomberg), was the libertarian vice-presidential nominee in 1980. He has also been a major donor to the arts, giving $100m to a prominent New York ballet theater.
The billionaire brothers have long sought to influence public opinion on energy and climate change, pouring hundreds of millionsinto universities, non-profits, thinktanks and political campaigns. But this week marked their first foray into publishing when, through their private equity arm, Koch Equity Development, they provided Meredith Corp with a $650m cash boost in its purchase of Time Inc.
“It’s a very proper business decision – a cheap way to wield even more political influence,” said Bill McKibben, a former New Yorker writer and key figure in the environmental movement as founder of the group 350.org. “The return on investment on their political work is off the charts, I fear.”
At first glance, the oil and gas giant’s reason for backing the bid by Meredith is not readily apparent. Sure, the Kochs have appeared on the Time 100 list – in 2011, 2014 and 2015 – and David Koch has lunched with the magazine’s former editor. But what kind of money-minded mogul would pivot to print in 2017 – and to Time, of all places?
“Time magazine doesn’t move the needle on anything any more,” said Jay Rosen, a journalism professor at New York University. “It just doesn’t make a lot of sense to me. Unless they want to influence the Fortune 500 rankings or something.”
As a spokesman put it to a media reporter recently, Koch Industries, the second-largest private company in the US, virtually all of which is co-owned by the brothers, “has a longstanding policy of not commenting on deals” — and this latest infusion of cash to Meredith from their private equity arm, Koch Equity Development, is no exception to that rule. But at least some of what the brothers have poured money into over the years is a matter of public record.
The Kochs have, for instance, spent hundreds of millions on not-for-profit organizations, universities, advocacy groups and political campaigns. Though payback on donations is perceptible only through influence, in Time, they would also have an asset.
Charles Alexander, whose decades-long career at Time magazine culminated in 13 years as its science editor, isn’t the least bit puzzled. He is, however, very afraid.
What’s concerning about the Kochs’ interest, according to Alexander, is not that they are conservative. Time’s founder, Henry Luce, was conservative. What Alexander is worried about is a much more recent affliction of the Republican party: its systematic denial of the science underlying climate change and how that presaged a larger skepticism of science and facts in general.
“For decades, the Kochs’ ‘dark money’, as the New Yorker’s Jane Mayer called it, has financed a campaign of disinformation designed to convince the public and politicians that climate change is nothing to worry about,” Alexander wrote in the Nation on Wednesday. Now, the Kochs may be poised to extend its reach directly into the editorial pages.
Time in its heyday was a sort of canary in the coal mine on climate, devoting cover stories and special issues to the matter long before such coverage was considered standard fare. More recently, as Republican leaders have come to regard climate change as fake science, Time’s commitment has slipped.
Under the Kochs’ influence, might it disappear completely – and what, exactly, is to be done about it anyway?
“I confess I don’t know what the solution is,” Alexander concluded, “but it is perverse and dangerous for two billionaires with no commitment to factual truth to be permitted to buy a magazine that has been a voice for reason and use it to further their narrow business interests.”
Like much of print news, Time’s decline is readily apparent. Yet it may be precisely that diminished status that makes it desirable to the media-shy Kochs.
The last time the billionaire brothers weighed a foray into print was in 2013, through the potential purchase of the Tribune Company’s eight newspapers – including such flagships as the Los Angeles Times, the Chicago Tribune and the Baltimore Sun. Amid a wave of protests, the effort was scuttled.
Scott Peterson of the watchdog group Checks and Balances Project said another reason the Kochs were able to keep a comparatively low profile in the Time bid was because they did not seek a complete takeover. Meredith said in its statement Sunday that Koch Equity Development would not have a seat on its board of directors and would “have no influence on Meredith’s editorial or managerial operations”.
“If they tried a complete takeover, that might raise questions in Congress, but if they’re just making an investment, no matter how large, if it’s below 50%, then they’re just a passive investor and who’s going to stop that?” said Peterson. “That is, until they move for full control.”
That was what happened in 2012 when Koch Industries bought a minority interest (around 45%) in Guardian Industries, a Michigan-based glass, automotive and building products company. Earlier this year, they completed the acquisition. Per Koch Industries policy, the terms were not discussed.
The Kochs do not simply give money, Peterson noted. Even charitable donations often come with strings attached. “I would find it kind of surprising if the Kochs simply made a quiet investment and then went on their way and watched their stock,” he said.
‘They play the long game’
Koch’s role in the acquiring of Time comes amid the most aggressive environmental rollbacks since the Reagan presidency: business interests at a recent meeting put on by the Heartland Institute free-market thinktank were “giddy” and “thrilled”. This is also a time when the Trump administration seems intent on developing friendly media entities.
This month, the Federal Communications Commission eliminated protections against monopolies in local broadcast news, a move widely seen as clearing the way for the expansion of a Trump-friendly local broadcasting network.
Because the US does not regulate the printed press in the manner seen in the UK, for example, there were no such protections to be overridden with regard to the Time deal.
The Center for Media and Democracy’s Mary Bottari told the Guardian she considered it “a smart move” on Koch’s part. “The only way they can convince the public not to worry their heads about climate change and to forget about regulating the fossil fuel industry is to create their own media megaphone,” said Bottari.
The Trump administration has demonstrated something of a penchant for giving bigger megaphones to interests it deems its own.
The man behind Sinclair Media Group, the local broadcaster for whose expansion Trump’s regulatory body recently cleared the way, is David Smith, a man whose history of donations and coverage would certainly pass a Trump loyalty test. Rupert Murdoch, whose long association with Trump was once thought to be chilly, has more recently kindled something of a bromance with him, a love affair apparent everywhere from Fox News to the Wall Street Journal.
Now the Kochs may be poised to become the newest conservative media moguls. And though Trump has demonstrated something of a fixation with Time’s annual “person of the year” award, their coziness appears to be less with Trump than with his vice-president, Mike Pence.
Pence has received more traceable campaign donations from David Koch than any other candidate, including $200,000 to Pence and a running mate when Pence ran for governor of Indiana in 2012 and $100,000 to Pence individually in 2016, before he was plucked for the vice-presidency. That doesn’t include funding from other sources, such as the Republican Gubernatorial Campaign Committee, which can legally be hidden.
Their relationship, as chronicled in a recent piece by Mayer – whose writing in the New Yorker helped make the Koch brothers a household name – runs deep.
Pence did the Kochs a valuable political favor in the spring of 2009 when, in light of a congressional push to curb carbon emissions, he signed on to help push the Koch-backed “no climate tax pledge”. Congress’s bill on “cap and trade”, a concept dreamed up by conservative Reagan-era economists, would have incurred catastrophic costs to Koch Industries.
Since then, they have grown closer still. By 2011, Pence was said to lead Charles Koch’s shortlist of potential presidential candidates. And though the elder Koch presumably had to settle for second best with Pence as VP, it hasn’t worked out so badly so far.
Whatever happens with the Time deal, the Kochs’ optimism appears warranted. Pence is the one White House official whom a drama-loving president can’t fire.
“They definitely play the long game and I don’t think that their game is the Trump administration,” Peterson said. “While people watch the Trump circus, the Koch brothers just get stronger.”
In the end, the Kochs’ return on any move into media will not be measured by Time’s bottom line. It will be measured by that of their own company – and by the progress of their ideological agenda.
