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Not much of a shocker, such is the state of the legacy magazine business these days.
Time Inc, in the process of being spun out from its current parent Time Warner, didn’t pay much for the recent acquisition of American Express Publishing from American Express, according to its first SEC filing yesterday. The acquisition, which was earlier said to be valued at less than $100 million, included travel magazines Food & Wine, Travel+Leisure,Departures, and Executive Travel.
But the reality is a bit different: Time Inc actually made a gain of about $20 million. Here’s how it explains it:
On October 1, 2013, we acquired American Express Publishing Corporation, including Travel + Leisure and Food & Wine magazines and their related websites. We also entered into a multi-year agreement to publish Departures magazine on behalf of American Express Company. In connection with the purchase, we will recognize a pretax gain of approximately $20 million in the fourth quarter of 2013 resulting from the settlement of the pre-existing contractual arrangement with American Express Publishing Corporation pursuant to which we previously provided management services to its publishing business. The purchase price was not material to our financial condition or results of operations, and we do not expect the acquisition to have a material impact on our financial results.
The two companies had been working together since 1993, almost as a joint venture, where a management services agreement that let them team up on selling advertising and back-office operations, as this NYT story explained earlier. So this meant that AMEX just offloaded its responsibilities to Time Inc, with little money exchanging hands.
Departures magazine will still be published by Time Inc on behalf of AMEX, only to be sent to its cardmembers.
Related stories on Skift:
- 8 Questions for the New Bosses at Travel+Leisure and Conde Nast Traveler
- American Express to Sell Travel + Leisure, Departures and More to Time Inc.
- American Express Confirms Sale of Magazine Division to Time Inc.
- Time Inc.’s Purchase of American Express Publishing Is Complete