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Time Warner Is Spinning Off Time Inc. Magazines

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By The Associated Press

Time Warner is spinning of Time Inc. magazines

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By RYAN NAKASHIMA

LOS ANGELES (AP) – Time Warner Inc. (TWX) said Wednesday that it will spin off the magazine unit behind Time, Sports Illustrated and People into a separate, publicly traded company by the end of the year.

CEO Jeff Bewkes said in a statement Wednesday that the decision to split off the Time Inc. magazine company will give Time Warner “strategic clarity” and enable it to focus on its TV networks including TNT, HBO and CNN, and its Warner Bros. studio, which produces movies and TV shows.

He said the move would create value for shareholders, similar to the company’s previous spin-offs of Time Warner Cable (TWC) and AOL (AOL).

In recent weeks, Time Warner had been in talks to combine all of Meredith’s magazines with Time Inc.’s lifestyle titles such as People, InStyle and Real Simple. But talks broke down over a value for the combined company and over which magazines from Time Inc. would be included in the mix, according to a person familiar with the matter. The person was not authorized to speak publicly and spoke on condition of anonymity.

Meredith said Wednesday that it respected Time Warner‘s decision and hoped to work with it on future opportunities. Meredith publishes magazines aimed at women such as Better Homes and Gardens, Fitness and Family Circle.

Time Warner shares rose 79 cents, or 1.4 percent, to $56.25 in after-hours trading following the announcement, after closing up 41 cents at $55.46. Shares of Des Moines, Iowa-based Meredith fell 80 cents, or 2 percent, to $39.50 in after-hours trading after closing down 86 cents at $40.30.

Analysts have estimated that the Time Inc. division is worth around $2.5 billion.

Time Warner said the spin-off would be tax-free to its shareholders.

The move completes the years-long unwinding of a media and telecoms giant formed in 2001 when America Online, an Internet access company, used $147 billion worth of inflated stock to buy Time Warner, in what has been regarded as the worst corporate merger of all time.

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Expected company synergies never materialized. Over the years, Time Warner moved to spin off the cable TV hookup business as well as AOL in order to focus on its profitable and growing TV and movie businesses.

Matthew Harrigan, an analyst with Wunderlich Securities, said shareholders have wanted the spin-off of the challenged magazine business for some time, mainly because the rise of Internet advertising has steadily eroded ad revenue from print publications.

Investors had come to see the magazine business as a drag on revenues and profits. According to the Publishers Information Bureau, U.S. magazine advertising revenue fell 3 percent in 2012 to $21 billion.

“Investors like pure plays and some instances where there are genuine synergies,” he said. “I think they concluded it was a bit of an odd duck.”

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Source: FULL ARTICLE at DailyFinance

Styles & Fashion

Time Inc. Reportedly in Talks to Sell Magazine Business

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By Justin Fenner

Some of the most recognizable brands in the print business might soon have new owners if Time Warner moves ahead with discussions to sell off parts of its magazine company – the nation’s largest – Time Inc.

According to Fortune – which is itself a Time Inc. title – executives from the company on Wednesday discussed a potential deal with representatives of the Meredith Corporation, the Iowa publisher that owns Ladies’ Home Journal, Parents, and More, among other titles. While the talks are still in their infancy, a tentative sales plan would see Time Warner holding onto its three oldest titles (Time, Sports Illustrated, and Fortune), while letting go of InStyle, People, Real Simple, and the rest of its stable of glossies.

A spokesperson for Meredith told WWD, “It is our policy not to comment on marketplace rumors or speculation.” How much the transaction is worth and whether it will actually go through remain to be seen.

Rumors of Time Warner selling off some of its magazines have surfaced before, but these seem especially credible in light of Time Inc.’s recent performance. Last month, in response to a decline in sales, subscription revenue, and advertising revenue in 2012, Time Inc. announced that it had plans to lay off six percent of its work force both domestically and internationally. As Time Warner continues to get smaller – the company sold off both Time Warner Cable and AOL in 2009 – selling off underperforming units might be seen as an attempt to insulate itself from trouble in the print industry.

Photo courtesy of InStyle.

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Source: FULL ARTICLE at fashionologie

Articles of Interest

Time Warner May Sell Off People , Other Magazines

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By John Johnson Time Warner is contemplating a big shakeup of the marquis magazines under its Time Inc. publishing division, reports Fortune and the New York Times . The media conglomerate is expected to sell People , InStyle , and Real Simple magazines to Meredith Corporation, which already publishes Better Homes and Gardens and Ladies Home… …read more
Source: FULL ARTICLE at Newser – Home