Sussex-based printing giant Quad/Graphics is suing one of its
clients, the publishers of Time magazine and others, over changes
the publisher wants, like bagging magazines, that Quad/Graphics says
would negate any benefit it gains by offering millions of dollars in
discounts in recent years.
filed suit in Waukesha County Circuit Court last week against the
Meredith Corp. of Des Moines, Iowa, seeking damages of at least
vice president of corporate communications for Meredith, said in an
email, “We are very confident that we are within our contractual
rights and plan to move forward with our ongoing strategies that
maximize value for our customers, company and our shareholders.”
According to the
suit, Time entered contracts with Quad to print several publications
— Coastal Living, Real Simple, Health, Cooking Light, InStyle, and
Southern Living. But also subject to the suit are Food & Wine and
Travel & Leisure, which Quad was scheduled to begin printing in
January 2019. Those 21 contracts were amended in 2016 to extend to
2023, with Quad offering discounts of 7 to 11 percent, becoming
effective in July 2016, and January 2017, 2018 and 2019.
extensions and additional publications were material both to Quad’s
willingness to print additional publications for Time and to
significantly discount its prices,” a discount the suit said was
worth millions, in exchange for the continued and additional
publications that were the principal benefit of the bargain to Quad,
the suit said.
over Time, Inc.’s publications in January 2018, and by June sought
new contractual requirements for eight publications printed by Quad,
seeking to have them “polybagged” — an industry term meaning to wrap
publications in clear plastic — and having copies with preaddressed
consumer marketing envelopes and inkjet-addressed copies all in the
same mail stream, saying such handling fell under binding
“Specifications” language in the contract and reserved the right to
nullify the entire contract, the suit said.
Quad said the
processing fell outside the “Specifications” clause, and, given that
Quad has been offering discounts on the titles since 2016, Meredith
was threatening to kill the contract before Quad derived any benefit
demanded by Meredith would require significant capital expenditures
by Quad for which Meredith is apparently unwilling to compensate
Quad,” the suit said.
with a letter terminating the contract, and set out a plan to wind
down printing at Quad of several publications over the fall of 2018
into January and February of 2019. In late July, Quad got a letter
affirming Meredith’s right to terminate the contracts. It also laid
out an “ultimatum” that Quad commit to a 100 percent selective poly
capacity and also demanded an across-the-board discount on all
Meredith work beginning Aug. 1, the suit said.
saying Meredith has breached its contract with Quad by terminating
its agreements “without any valid contractual basis upon which to do
so,” the suit said.
In a statement,
Quad spokeswoman Claire Ho said, “We have enjoyed a long and
productive relationship with Meredith Corporation since 1994, and
our goal is for that relationship to continue long into the future.
We did not enter lightly into the decision to file a complaint as we
value our relationship with our clients. We have spent considerable
time and effort trying to resolve this matter amicably. At the core
of the complaint is that we do not agree on contractual language,
specifically as it relates to the Time Inc. titles that Meredith
acquired earlier this year. This is a straightforward contractual
dispute, and the filing was an unfortunate last resort.”