For Meredith Chief Operating Officer Stephen Lacy and publishing group President Jack Griffin, the six months of talks with Gruner & Jahr promised to finish the repositioning of Iowa-based Meredith as the premier media company serving women-a strategy that Mr. Lacy had mapped out and Mr. Griffin was executing-but only if they could keep a secret.
"The inner circle expanded very slowly, on a need-to-know basis, and all of us involved disciplined ourselves to think that if you tell anybody, you might as well tell everybody," Mr. Griffin recalls. "Up until the very last day, I was the only person in New York who knew. The rest were executives in Des Moines. Now, what does that tell you?"
That these normally forthright Midwesterners have plenty of guile when it counts-enough to nab Gruner & Jahr USA Publishing's Parents, Child, Fitness and Family Circle for $350 million last May. The deal catapulted the combined circulation of Meredith's titles to near 30 million, making it the second-largest publisher by that measure in the U.S. today.
The complementary skill sets of Messrs. Lacy and Griffin have transformed Meredith from a shelter magazine publisher into one of the most progressive-thinking media companies around, one that has diversified well beyond the printed page by developing a sophisticated database and integrated marketing operation.
The two Meredith executives were Mr. Inside and Mr. Outside in the Gruner & Jahr deal, with Mr. Lacy participating in the talks. The negotiations were led by Meredith CEO William Kerr, whose personal relationship with Axel Ganz, Gruner & Jahr International president, was the catalyst for the talks.
"Bill kept the dialogue going, I made sure that deal was buttoned-up and Jack had his team ready to hit the ground running because the fall selling season was coming up quickly," Mr. Lacy says of their respective roles. "There was a 60-day window to make this work."
Mr. Lacy, 51, had been working toward this deal since 2002, when he recognized the need to diversify Meredith's magazine portfolio and audience beyond shelter titles and the older end of the baby boomers. To that end, he engineered the purchase of Primedia's American Baby franchise that year and began identifying opportunities like the Hispanic market for future launches.
He was joined in 2003 by Mr. Griffin, whom Mr. Lacy helped lure away from Parade Publications. "I took the lead role in recruiting him," says Mr. Lacy, "but he understood immediately where we were trying to go strategically."
"It was clear shelter wouldn't carry the day much further," says Mr. Griffin, 45. "It's still a pretty big business for us, but the growth had happened. There had to be a human element to this, not just rooftops but primarily women."
At the beginning of 2004, the pair presented to Meredith's board a handful of scenarios that would fill out the portfolio, "and there was really only one that took us in the direction of women," Mr. Griffin says. Gruner & Jahr. "I remember it vividly: The board looked at us and said, `That makes sense, but what's the likelihood of us getting that?' It was pretty remote, but we set out in earnest to chip away."
PLANNING FOR BIG DAY
A year later, as talks gained traction, their respective roles became clearly defined. While Messrs. Kerr and Ganz talked, Mr. Lacy took charge of the deal's due diligence and number crunching, and Mr. Griffin and his team prepared plans for life after the successful conclusion of a sale.
"The key thing for me was if this happens, how do we hit the ground running? How do we get ready to tell our people, to communicate with the people who are coming over, who aren't coming over, with advertisers, with associations, so people feel like it was well-handled," Mr. Griffin says. "Steve and Bill [Kerr] and I worked on this together over and over again until it felt right. And when we announced the deal, we could tell you every detail."
The relative smoothness of the deal is testament to their teamwork and planning.
Now the pair must integrate the Gruner & Jahr magazines into a traditionally Midwestern company that has nearly as many employees in New York these days as it does at its Des Moines headquarters. "I think this will take somewhere in the range of 24 to 30 months" to bring the new additions up to speed, Mr. Lacy says. Mr. Griffin has already reshuffled the publishers at these magazines, and investments in consumer research and circulation are ongoing.
Ironically, Advertising Age's 2005 also won this honor in part for efforts to push their company beyond publishing. Meredith's crown jewel and engine of growth isn't its portfolio of magazine brands, but rather its database of 80 million. Messrs. Lacy and Griffin have used this database to support existing brands, identify new ones-such as the newly launched, 350,000 circulation Siempre Mujer targeted to Hispanic women-and develop new lines of business that have nothing to do with publishing.
This summer, Procter & Gamble Co. named Meredith "agency of record" for one of its direct marketing campaigns, beating out traditional shops. Meredith's integrated marketing efforts-which Mr. Griffin once spearheaded, followed by Mr. Lacy, then handed to Mr. Griffin once again as the head of the publishing division-have provided Meredith with a plan for life after publishing. Nearly a third of Meredith's publishing revenue is now derived from neither circulation nor advertising, and that share is only expected to increase over time.
Two dozen titles
Meredith Corp.'s publishing operation boasts 24 subscription magazines, including those acquired from Gruner & Jahr. The publishing arm generated $908.8 million in revenue for fiscal 2005, ended June 30, accounting for about 76% of Meredith's $1.2 billion in revenue