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Koch insists it will just be a passive investor in Time Inc. The fine print reveals that’s not true.

A clause in a KED letter tells a different story.

In this Nov. 16, 2017, file photo, an issue of Time magazine is displayed on a New York newsstand. CREDIT: AP Photo/Mark Lennihan, File
In this Nov. 16, 2017, file photo, an issue of Time magazine is displayed on a New York newsstand. CREDIT: AP Photo/Mark Lennihan, File

Charles and David Koch, the right-wing billionaires known for bankrolling Tea Party candidates and other conservative and libertarian priorities, backed a sale of Time Inc. to Meredith Corporation Sunday, giving the corporation control over a number of iconic magazines, including Time, Sports Illustrated, and People.

As Recode’s Peter Kafka quickly asked Sunday, why would the Koch brothers want to own a piece of Time Inc.? The Time Inc. empire would be a loud platform for any ideological billionaire to promote their politics, but Meredith (and some media outlets) have painted the Koch brothers as passive investors in Time Inc.

“[Koch Equity Development] will not have a seat on the Meredith board and will have no influence on Meredith’s editorial or managerial operations,” Meredith said in a press release Sunday. “KED’s non-controlling, preferred equity investment underscores a strong belief in Meredith’s strength as a business operator, its strategies and its ability to unlock significant value from the Time acquisition.”

The fine print proves that simply isn’t true.

Daniel Shulman, a Koch biographer, told Politico Monday that the Koch brothers are “always looking to exert influence in one way or another.” Richard Stengel, a former Time editor who also served in the Obama administration, told the outlet that he thinks it would “be naive to think that just because the Koch brothers don’t have a seat on the board that they wouldn’t wield some kind of editorial influence.”

A commitment letter from KED dated Sunday reveals that Shulman and Stengel are likely right.

Screenshot of clause via Alex Weprin
Screenshot of clause via Alex Weprin

“On a quarterly basis, [KED’s] senior management will meet with the Purchaser to discuss current business, financial and strategic matters,” a section titled “Information/Board Observer Rights” says.

Additionally, the section outlines the possibility for a KED observer at board meetings.

Meredith Corp. did not respond to requests for comment Monday afternoon on whether the “strategic matters” discussed at their quarterly meetings will include editorial strategy or simply financial strategy. This story will be updated should the corporation comment.

Despite the clause, some outlets ran Meredith’s claim without question.

“Meredith Corp. accepted the financial backing of the billionaire Koch brothers for its pending purchase of Time Inc. because they offered the best terms and had no interest in running the business, Meredith’s chief executive said Monday,” a Wall Street Journal story Monday afternoon said.

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CNN, too, parroted Meredith’s claim that the billionaire brothers would be passive investors, overlooking the letter, which can be found in the SEC archives, that outlines the quarterly meetings and potential board “observer.”

Skepticism of the “passive investor” claim is vital, especially considering the Kochs have a history of attacking journalists who report on them critically. Bankrolling Time Inc. will bring them closer to many journalists who have aimed to do just that.

It seems likely that the Kochs hired a private investigator to look into writer Jane Mayer, the New Yorker reporter who wrote Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, largely about the Koch brothers’ political involvement. Later, a dossier that falsely accused Mayer of plagiarism made its way to conservative outlets, and the alleged investigator also dug into a college friend of Mayer’s from decades earlier.

Additionally, in 2013, the Washington Post outlined the Kochs’ effort to take down journalists who report critically on the family and their investments.