Time Inc. May Sell 'People,' Other Titles
The parent company of Time Inc. is considering selling a number of big titles, including People, InStyle, and Real Simple,
according to a report on the Web site of Fortune, owned by Time Inc. Fortune is not included in the potential divestiture; the company would also keep flagship Time and
Sports Illustrated, according to the same report.
Time Inc. has been in talks with BDT Capital Partners and an unnamed “serious buyer” about the potential sale, according to Fortune. BDT has a relationship with Warren Buffett, who has recently scooped up a number of ailing print media properties in the newspaper business at bargain prices.
However, Fortune cautions that the talks are at a preliminary stage, and “may never come to fruition.”
Time Inc. did not respond to MediaPost email inquiries at press
The sale of People, one of the biggest magazines in the world and Time Inc.’s most lucrative asset, would signal a definite move away from magazine publishing by Time Warner. It has repeatedly come under pressure from shareholders to shed its beleaguered publishing division and focus on more profitable areas like cable TV and movies.
Indeed, while Time and Sports Illustrated remain iconic brands, they are dwarfed by the equally iconic People, which posted rate card revenues of $993 million in 2012, according to the Publishers Information Bureau, compared to $577 million for SI and $396 million for Time. With the addition of InStyle, with rate card revenues of $435.2 million, and Real Simple, at $242 million, Time Warner would be unloading the better part of its magazine business.
Separately, Time Inc. recently undertook another round of layoffs, in a cost-cutting move possibly intended to make the company more appealing to potential buyers.
In January, CEO Laura Lang warned employees that the company would lay off around 6%
of its workforce, or roughly 480 out of 8,000 employees. The last major wave of layoffs at Time Inc. came in fall 2008, when the magazine publisher cut 600 positions -- equal to about 6% of its
workforce at the time. From 2005 to the present, the company has shed around 3,480 jobs, or 32% of its 2005 complement of 11,000 worldwide.
Time Warner’s magazine publishing division has lagged behind the rest of the company. In its most recent earnings announcement, Time Warner revealed that revenue from its networks division increased 4% to $14.2 billion in 2012, while publishing division revenues decreased 6.8% to $3.43 billion. Film and TV entertainment saw a smaller decline of 4.9% to $12 billion.
Time Warner is not the first to consider spinning off its publishing division. Last year, Rupert Murdoch’s News Corp. announced that it would split its newspaper publishing and TV and entertainment businesses into two separate companies, called News Corp. and Fox Group.