John Zieser represents publishing giant Meredith Corp.
Published in Corporate Counsel Edition® - July 2009 magazine
By Paul Nolan on June 12, 2009
John Zieser is foremost a businessman. That was always the plan.
After earning his MBA from the University of Iowa, he completed his J.D. at Cornell University, where the latter was meant to supplement the former. “I didn’t think when I entered law school that I would become a lawyer,” he says. “I thought it would be a good technical platform for business. I’m really more of a businessperson who happens to be very good at law.”
It’s a combination that has worked for both Zieser and his employer, Meredith Corp., the Des Moines media conglomerate that publishes some two-dozen consumer magazines, including such iconic titles as Better Homes and Gardens, Family Circle and Parents. As the legal and business development head, Zieser has guided the company through more than $500 million in recent acquisitions, which further diversified Meredith as the publishing industry was turned on its head and before the economy fell.
“John’s background in business and law makes him ideally suited for the general counsel and chief development officer roles,” says Steve Lacy, Meredith’s CEO. “He has a keen ability to understand the needs of our changing markets. His department is extremely efficient because the same team handles the prospecting, negotiation and legal documentation.”
The Belle Plaine, Iowa, native discovered his knack for law at Cornell, where he served as senior editor of the law review and graduated magna cum laude in 1986. He launched his professional career at the Wall Street firm Sullivan & Cromwell, specializing in U.S. and international mergers, acquisitions, venture capital and private equity transactions. He first lived in Washington, D.C.; then spent time in London, where Sullivan & Cromwell was helping the British government privatize several businesses; and two years in Australia, the firm’s Asia Pacific base.
In 1993, when an in-house legal position opened up at First Data Corp., the electronic payment processor based in Omaha, Neb., Zieser took the opportunity to move his family back to the Midwest. He started as the company’s mergers and acquisitions counsel, but moved quickly into a business development position.
First Data had just spun off from American Express in a $1 billion public offering—at the time, the largest IPO ever. When the company merged with First Financial Management Corp. in 1995, Zieser moved away again, this time to Atlanta, where he ran First Data Merchant Services, a subsidiary of the parent company.
Four years later, Meredith executives asked him to lead its in-house team. Not only did the opportunity appeal to him professionally, but it would bring him back to Iowa. When he flew in for an interview, he immediately hit it off with then-CEO Bill Kerr and Lacy, who was CFO at the time. “[They are] very similar to the type of people I worked with at Sullivan & Cromwell,” he says. In accepting the position, Zieser would help Meredith compete against New York powerhouses Condé Nast and Time Warner. “[Kerr and Lacy] realized they needed to develop more bench strength in their senior management team,” he says.
What no one realized at the time was that Meredith, which would celebrate its 100th anniversary in 2002, would undergo dramatic changes along with the rest of the publishing world.
Throughout its first century of business, Meredith had established a reputation in the publishing world for lifestyle, home and family magazines. Its only major print acquisition in the previous two decades was Ladies’ Home Journal in the mid-1980s.
But readers’ exodus to the Internet for information meant Meredith needed to diversify and develop new revenue generators at a pace much quicker than the publishing company and its longtime leadership were accustomed to. “Meredith was pretty sleepy for many years on the acquisition front,” says Zieser. “From a revenue standpoint, the senior management team realized that in order to continue growing we had to become more aggressive.”
The company first acquired American Baby Group for $115 million in 2002, which added 2 million names to its database. “We hit the market immediately with an instant brand and customer base,” says Zieser, who convinced management that it was more important to broaden the demographics of the company’s target audience than invest resources into launching and nurturing a new title. (For example, More, a magazine aimed at affluent 40-plus women, was created from scratch and took several years—like most magazine launches—to break even on the millions of dollars of investment.)
While on a flight to Montreal in 2004, he and Lacy determined that a formal corporate development team was necessary, which is how Zieser earned his other title: chief development officer. “We made the decision to pursue strategic acquisitions in a very deliberate manner,” Lacy explains. “That process continues today. John’s team continues to look at potential deals. We’re focusing on what I like to call transformative transactions.”
In 2005, Zieser guided the $350 million acquisition of five major magazines—Fitness, Family Circle, Child, Parents and Ser Padres (the Spanish-language version of Parents), all from Gruner + Jahr. He also had the prescience to purchase six digital integrated marketing companies, which increased the company’s revenue by 50 percent from the previous year and upped operating profit 75 percent.
While advertising remains the largest revenue source at Meredith, Zieser says integrated marketing, online properties and licensing agreements are playing a more significant role. For example, Meredith signed a multiyear deal with Wal-Mart to create a line of nearly 1,000 products under the Better Homes & Gardens brand. “If we had not made all of the acquisitions to fill out our business-to-business offerings from a digital standpoint, that side of the business might be a dinosaur right now,” he says.
Although its stock hit a 52-week low of $10.60 early this year, he says the company is strong financially, having used its own cash to pay for most of the companies it acquired in the past several years. Most of the acquisitions have exceeded the expectations he presented to Meredith’s board (although he attributes part of that to conservative forecasting). Furthermore, his business development team reviews 50 to 100 acquisition opportunities each month, some of which he expects the company to pursue later this summer.
Zieser says his two core duties, legal and business development, have the same end goal: “If I’m dealing with a piece of litigation or something that is core to my general counsel responsibility, I’m very clearly taking one hat off and putting the other one on. For most of what I do, however, I’m just a senior stakeholder focused on what’s in the best interest of the company. That overriding charter doesn’t change.”
He credits his team of five in-house attorneys and about twice as many paralegals for keeping things running smoothly. He takes a hands-off managerial approach, assisting in litigation matters when needed and reporting to the board about any litigation the company is involved in.
For the most part, the legal workload is predictable and routine. “I can tell you with pretty good accuracy how many lawsuits we’re going to have each fiscal year and where they will come from,” he says. “Each year we have about 35 cases come in and about 35 cases go out.”
The most common lawsuits filed against the company pertain to editorial content, usually First Amendment or privacy matters regarding reports by local news crews at the TV stations they own. “That’s to be expected when you have investigative news teams,” he says. Other litigation involves employment, trademark and vendor disputes.
Zieser leverages his in-house team’s efforts with outside counsel whenever necessary, primarily turning to the Belin Lamson McCormick Zumbach Flynn firm in Des Moines. “The most effective legal departments in terms of quality, effectiveness and efficiency are made up of competent, experienced generalists who are given clear responsibility of business units,” he says. “Our volume of trademark work and legal work resulting from acquisitions ebbs and flows. Instead of having a fixed cost for that type of work, it makes more sense to me as a manager to have a variable cost structure.”
Turning again to his dual role at Meredith, he argues that his unique position is what made the acquisition of six companies in 14 months possible.
In sports terms, business development is offensive, while general counsel is typically defensive. By leading the charge on both sides, Zieser says he helps the company avoid the headbutting that frequently occurs during high-growth periods.
“Frankly, I don’t think we would have executed what we did without this arrangement. We didn’t have a crazed marketing guy out in front chasing a deal and viewing the lawyers as the enemy,” he says. “We’re all part of the same group and we’re on the same page. Everything has to work or we don’t go forward. You can’t do what we did unless you have that sort of unified team in place.”
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