The Truth About Time Inc: Nobody Really Knows Its Future

The notion of Time Warner spinning of Time Inc. is not new — its been whispered in and around the halls of Time Warner’s Columbus Circle Headquarters for a few of years now. In well reported item for BusinessWeek back in June, Jon Fine asked this very question: Time Warner: Is it Time to Dump Time Inc.?:

By announcing plans—finally—to spin off AOL, Time Warner (TWX) CEO Jeffrey Bewkes has dealt with one longtime problem child. But another remains in the fold, one that complicates matters by lending its name to the corporate moniker. What to do with Time Inc.? It’s America’s largest magazine group, posting operating income last year of $779 million on revenue of $4.6 billion, and it owns titles as important to consumers and advertisers as People, Fortune (a BusinessWeek competitor), In Style, and Sports Illustrated. But these days “largest magazine group” is not a description you want appended to your company. Time Inc.’s ad revenues shrank 30% in this year’s first quarter, compared with the year previous, after falling 20% in the last three months of ’08.

The rhetorical flourishes offered by Bewkes regarding Time Inc. make it clear that the company is leaving all options open. In a late April earnings call, Bewkes said the future Time Warner “may well include publishing, but we’re not making a religious statement about it either way at this point.” (At that time, the company also warned that second-quarter trends looked similar to those of the first.) Time Warner’s finance chief, John Martin, was marginally more supportive in early June, saying at an investor conference that “today we have no intention and no current thinking of doing anything with the publishing business…. It’s really hard to make a macro call on the state of that business in the midst of this cyclical downturn” for magazines.

Fine later goes on to point out that, to sell the publishing unit Time Warner would need to find a buyer – a difficult task in this market. Further, a potential suitor would have to know how much of Time Inc.’s decreased revenue is from a “temporary ad downturn and how much comes from permanent structural change in the media world.”

An excellent question to be sure and the right one to ask. But at this point in Time Inc.’s life cycle, all we have are questions; the answers will only be revealed in time. Until them, watch the video of Gordon Crawford (and former Fox exec Peter Chernin in the video below. Crawford’s comment comes at the 19:00 mark.