According to Time CEO Rich Battista, it was all that coverage of a Time sale that would not be that accounted for the company’s poor Q1 showing. “The noise and relentless media speculation over the last six months around the potential change of ownership clearly was a major distraction to our employees and advertisers and other partners, and had an impact on Q1 results,” he said in an earnings call.
He went on to say that its April 28 announced decision not to sell “has gone a long way to settle things down and enable staff to refocus fully on the business. It’s also no longer one of the first things many of our advertising partners want to talk about.”
That set-up gave way to some unattractive data points in its Q1 earning report. Total revenue was down 8 percent year-over-year in Q1, which included a 21 percent drop in print advertising revenue, owed to a combination of lower rates, fewer pages sold, and fewer print issues available in which to sell space. A 32 percent increase in digital advertising revenue, which now accounts for 36 percent of all advertising revenue, could not make up the difference. In real figures, total ad revenue was at $331 million in the first quarter of 2017, compared to $360 million in the first quarter of 2016. Circulation was also down, 14 percent. A future bright spot may be in native and branded advertising, which “nearly doubled,” according to Time evp and chief financial officer Susana D’Emic.
Battista announced the company was seeking a number of cost-cutting measures, including an announced dividend reduction from 19 cents per share to 4 cents per share. He also announced the company was planning to sell a number of “non-core assets,” without specifying what those would be.