What: Time Inc. will soon be inking a deal to purchase American Express’ luxury publications.
Why is it important: Banking regulations discourage licensed banks from participating in non-financial businesses, which is the reason behind AmEx’s magazines forthcoming sale.
According to sources such as AdWeek and The Wall Street Journal, and although neither side has yet publicly acknowledged the impending sale, Time Inc. may be close to a deal to buy American Express’ luxury publishing division.
Negotiations reportedly began to take place after banking regulations –that limit American Express ability to get involved in non-banking activities– required that, being AmEx a bank holding company, exited noncore businesses, even if the publishing division was a small business given the company’s size. Rumors have escalated after the arrival, last week, of Time Inc.’s new CEO, Joe Ripp.
The five high-end magazines Time Inc. would be acquiring are Food & Wine, Travel + Leisure, Departures, Executive Travel and Black Ink. It is still not clear how much would Time pay for the titles. Adding AmEx chic magazines to Time’s current 130 titles (Time, Fortune, Life, Golf Magazine, InStyle, People, Sports Illustrated, etc.) would further allow a more targeted communication towards upscale consumers.
It is expected, however, that Time Warner Inc., Time Inc.’s parent company, relaunches the publishing unit as a stand-alone company in the near future.
WSJ’s William Launder highlights the fact that Time and American Express have a long-standing relationship, because due to an arrangement dating to the early 1990s, Time handles functions like subscription fulfillment and other back-office services on behalf of American Express.