Essence of the Deal

What does time inc.'s takeover mean forthe popular black women's magazine?

The announcement of the acquisition ripped through quarters of the African American community like a shockwave. In fact, a number of black women were crushed, responding to the news as if they had lost a dear friend. A poll found that 34% of respondents felt that ECP had “sold out” vs. 14% who felt the transaction made good business sense. Another 46% of those who replied were concerned with how the new ownership structure would affect the magazine and other events. For instance, Leslie Mays, president of the National Coalition of 100 Black Women and an Essence subscriber, found it “extremely disappointing on a personal level” to learn ECP surrendered control and ownership of the publication. “It enables Time to reach an influential market segment—black women—directing our dollars away from reinvestment in our community and businesses and into the deep pockets of another multinational corporation,” she asserts. “I also have a worry that such a deal almost certainly guarantees loss of editorial control and content on subjects of interest and concern to black women as a primary audience. Time Inc.’s purchase of Essence seems to be somewhat incongruent with the stated aspirations and goals of its parent company’s commitment.”

Ken Smikle, president of Chicago-based Target Market News, a market research firm that tracks consumer trends, approved of the deal but explained that the Essence sale hit a raw nerve because it represented the loss of one of “our cultural guideposts” like Motown, BET, and black haircare companies. “These are institutions that we share a common experience with. They are woven into our everyday life,” says Smikle. “We feel that we lost something because these institutions and their ownership by extension represent a part of us.”

Adds Marcia Gillespie, who served as editor-in-chief of Essence from 1971 to 1980: “As a people in the 1970s, we were searching to own and control our own businesses. It was about black entrepreneurship and all that implies so [the sale] is counter to that. I have mixed feelings about the sale because it signals that we are headed in a different direction than what our dream was about. We lost a piece of our history.”

Others like BET CEO and founder Robert L. Johnson size up the deal as part of an evolutionary model of the black media business—a paradigm shift that includes deep-pocketed corporate partners and, in some cases, acquirers. “The only reason Time Warner would want to buy [Essence] is because of the strength and power of Essence’s voice that has been built up over 30-plus years that Ed ran the business,” he says. “It’s just a sheer economic fact of life that over time, as black companies become very valuable for their brand and market penetration, it’s going to be very difficult for African American [potential buyers] to offer the kind of financial transaction that’s going to maximize shareholder value for the seller.”

Smikle, too, believes the deal is part of Essence’s evolution as a company. “Essence is not Johnson Publishing or BLACK

Pages: 1 2 3 4 5