The publishing world got a jolt today with reports that Time Warner is in talks to sell its publishing unit Time Inc., a move that would cap years of speculation.
Time Inc.'s own Fortune first reported that a "serious buyer" was in talks to buy the company. The No. 1 U.S. magazine publisher, Time Inc. is a jumble of women- and men-aimed titles and weeklies and monthlies, so finding a buyer who would want the entire portfolio is unlikely. As such, speculation quickly turned to one scenario put forth by Fortune that had Time Inc. selling its more valuable women’s titles including People, its crown jewel and widely considered the industry’s most profitable magazine; In Style; and Real Simple. The New York Times followed with a story centering on Better Homes and Gardens and Family Circle publisher Meredith, already entrenched in women's magazines and an active buyer of late, as a buyer of Time Inc.'s women's magazines. A spokesman for Meredith Corp. said the company had no comment.
A publishing executive told Adweek that he had direct knowledge that Carlyle and Meredith had been teaming up with interest in buying magazines and had approached other publishers recently but had been rebuffed.
Other speculation today centered on figures as diverse as Warren Buffett, Ryan Seacrest and ex-Time Inc. CEO and Meredith exec Jack Griffin, who was said to have appeared surprised himself by the sale reports.
A partial spinoff scenario would leave Time Warner still holding the iconic but more challenged brands, Time, Fortune and Sports Illustrated. Time Warner has never had much success wringing synergies out of its publishing and cable properties; its most recent attempt, having Sports Illustrated and Turner work together on ad sales, ended in disaster. Corporate cooperation could get another chance, though, now that CNN has a new president in Jeff Zucker, who doesn’t come with that corporate baggage.
Rumors of a spinoff have swirled for years as Time Inc.’s performance has trailed Time Warner’s lucrative cable business, and in the past, questions about a sale have been met with strong denials. But those answers have grown softer lately, and company watchers said comment by chairman Jeff Bewkes on CNBC last week in which he seemed to entertain the idea of a sale was a telling one. Spokespeople for Time Inc. and Time Warner had no comment on the sale matter.
Time Inc.’s new CEO Laura Lang has been trying to lift the company’s performance by laying off 480 people, or 6 percent of the global workforce; introducing new digital ad products; and creating a centralized video unit.
The position of consumer marketing head remains open at a time when growing consumer revenue is a critical priority for the industry. And morale has suffered as insiders have complained that Lang has been remote and lacked in big initiatives.
“This is kind of a bellwether event, because it’s the largest magazine company in the world splitting the company up,” said Reed Phillips of media investment bank DeSilva + Phillips. “It’s the end of an era." A sale wouldn't necessarily signal that the industry is moving away from ownership consolidation, however, Phillips added. "The issue of Time Inc. is a Time Warner issue. Magazines have become a much smaller piece of the puzzle there,” he said.