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Spoonfeedin WOrld

Business – Time Warner Dumping Its Magazines? Not So Fast

Peter Kafka

Add another voice to the chorus of people who think Time Warner will get rid of its Time Inc. magazine group: Media investor Gordon Crawford is predicting that CEO Jeff Bewkes will shed his conglomerate’s namesake publishing unit.

Crawford’s thinking: After Time Warner ditches AOL, which is scheduled for a spin-off later this year, it will ditch its magazine business as well. That will leave it with a portfolio made up only of a movie studio and cable networks, and a big cash pile to play with.

Time Warner won’t comment, but I’m sure they’ve heard Crawford make this prediction before. His Capital Research Global Investors owns more than 8% of Time Warner shares, which means he gets plenty of access to Bewkes and his lieutenants.

But here’s the thing: The body language from Time Warner executives in recent months makes me think they intend to keep at least part of their magazine business in the family. More than body language, actually: “Time Warner without People? I can’t imagine it,” one well-placed Time Warner official told me recently.

That said, I won’t be surprised if the publisher employs fewer people, producing fewer magazines in the future.

Time Warner officials have repeatedly said that Time Inc. has too many titles: It publishes 23 magazines in the US. How many can you name? And last year’s mass layoffs, while unprecedented for the publisher, were still fairly modest compared to other publishers’ cuts. The 6% reduction left Time Inc. with some 9,400 people on the payroll.

But executives at the publisher love to stress, off the record, that its flagship titles — Time, People and Sports Illustrated — are each on track to generate millions of dollars of profit this year, even though ad pages and revenues are down. And while Time Inc. certainly hasn’t figured out its digital business yet, at least some of its print properties could and should do well on the Web, as People.com is already doing.

There are certainly stuff assets that Bewkes and co. could dispose of fairly easily. For instance, its UK-based IPC Media unit, which handles many of the 90-plus titles it publishes outside the U.S., is frequently brought up as a sale candidate. But I’d be surprised if he got rid of all of Time Inc., and its iconic brands, altogether.

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September 28, 2009 - Posted by | Uncategorized |

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