Time (Inc.) Marches On, Plans To Separate From Time Warner In 6 Months
The largest magazine publisher in the U.S. with a 91-year history is about to separate from parent, Time Warner (NYSE: TWX).
According to The New York Times, the move will take place within the next six months, if all goes well.
The “going well” part may be a challenge. Time Inc. has gone through three chief executives in as many years and lost former editor-in-chief, Martha Nelson. In addition, much to the chagrin of journalists, the company plans to eliminate the traditional wall between the business and newsroom sides.
Time Inc. sees this move as necessary to increase revenue and stop the bleeding of subscription and advertising income. Because of this, newsroom employees will soon begin reporting to management on the business side.
The change agent at Time Inc. was slated to be Joseph A. Ripp who took over in September. Ripp, who acknowledged he found it refreshing to “shake things up,” said he was open to expanding the new company’s television and conference businesses. He told The New York Times, “Because we were part of a larger media conglomerate, our ability to expand outside of print magazines was always restricted.”
About 25 years ago, Time Inc. merged with Warner Communications. By separating from the media conglomerate, the company would effectively return to its historic roots that go back to 1922.
In order to succeed, Ripp will have to convince subscribers that the new linkage between the newsroom and business sides of Time Inc.’s various magazines does not violate Time Inc.’s credibility.
To help do this, Ripp distinguished between the standards applied to Time magazine and other offerings such as Cooking Light. Accordingly, Ripp said, “We will never, ever, ever, violate our trust with consumers. If you look at journalism at Time Inc., we have applied the concepts equally to covering budget deficits and food titles. Service journalism can be different.”
Norman Pearlstine, former Time Inc. editor-in-chief will serve as company “referee” when it comes to mediating disputes between the business and newsroom sides of various Time Inc. properties.
Despite this, concern still exists among journalists at the company. One former Time Inc. executive told the newspaper, “People are really concerned about reporting to the business side.” The former executive added, “There’s a lot of trepidation about it.”
Time Warner filed the plan to spin off Time Inc. in November. At the time, no specific date was set – except to indicate the spinoff would likely occur in 2014.
Time Warner CEO, Jeff Bewkes had said in March he planned to spin off Time Inc., which analysts said had an enterprise value of just under $4 billion. The move was seen as a way for Time Warner to protect the film and cable side of the business from the woes being experienced on the magazine side as it struggled to transition to an Internet presence and adjust to lower advertising revenue.
At the time of this writing, Jim Probasco had no position in any mentioned securities.
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