Time Warner Will Spin Off Time Inc. Into Separate Company; Talks with Meredith Called Off NY Times' Media Decoder blog
Time Warner "announced it would spin off its Time Inc. magazine unit into a separate, publicly traded company, a move that will allow the media conglomerate to focus entirely on its cable television and film businesses," reports Amy Chozick on The New York Times' Media Decoder blog.
The story continues, "The announcement came hours after Time Warner and Meredith Corporation ended negotiations on a proposal that would have joined in a separate company many Time Inc. titles with magazines published by Meredith."
Chozick also writes, "The deal with Meredith fell apart in part because of Time Warner’s concern over the fate of four of Time Inc.’s famous but struggling magazines -- Time, Sports Illustrated, Fortune and Money, according to three people with knowledge of the negotiations who could not publicly discuss private conversations. At one point Meredith expressed some interest in the news and sports magazines, but Meredith decided not to pursue them because such a deal would have diluted its controlling family’s shares in the new company, another person with knowledge of the negotiations said. If Time Warner retained those four titles, the economics of a full spinoff proved more appealing, this person said."
The article added, "Time Inc., suffering from industrywide declines, has consistently lagged in Time Warner’s quarterly earnings. In the three months that ended Dec. 31, revenue at Time Inc. fell 7 percent to $967 million. In the same period, revenue at the company’s cable television channels, including TNT, TBS and HBO, grew 5 percent to $3.67 billion.
"In a statement late Wednesday, Jeffrey L. Bewkes, chairman and chief executive of Time Warner, said a complete spinoff would provide clarity for the company as it concentrated on its high-growth businesses, primarily in cable television."
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