Time Warner Inc. is considering selling most of Time Inc., including People Magazine, which is thought to be the highest-revenue magazine in the world. Time Inc.’s Fortune announced the news Wednesday with the clarification that Fortune, Time and Sports Illustrated would not be part of the deal.
Meredith Corp., a Des Moines, Iowa-based media conglomerate geared toward women’s interests, is said to be the prospective buyer. Fortune reported that under the tentative plan, Meredith’s current magazine holdings, including Better Homes and Gardens, Ladies’ Home Journal and Family Circle, would merge with Time Inc.’s magazines to create a new company.
Neither executives from Time Warner nor Meredith have spoken publicly about the deal, and Fortune noted that it could dissipate, as it is “still in a formative stage.”
John Janedis, UBS analyst estimated the sale would be between $2.4 billion and $2.9 billion, according to The Wall Street Journal. He added that the three magazines Time Warner will retain currently account for approximately 10 percent of Time Inc.’s revenue.
Just weeks ago Time Inc. announced plans to cut 6 percent of staff from throughout the company, which would mean about 480 layoffs. The shedding of Time Inc. follows a trend the company started in 2009 with the sales of AOL and Time Warner Cable.
Time Warner executives reiterated in the past that they had no intentions of selling Time Inc., the company’s namesake. One official told All Things D in 2009, “Time Warner without People? I can’t imagine it.” But in 2012 Time Inc.’s revenues fell almost 7 percent and operating profits dropped more than a quarter, contributing to the company’s 30 percent revenue decline in the past five years, according to The New York Times.
So in September, John Martin, Time Warner’s chief financial officer, gave the first indication that selling Time Inc. was a possibility. In response to the question of whether Time Warner might consider separating Time Inc. from its other business, he said that “it’s fair to say we’re disappointed with the results at Time Inc.” so he “wouldn’t rule anything out in the future.”
Time Inc. is following the lead of News Corp., which decided in June 2012 to divide into a two separate publishing and broadcasting companies.