BREAKING NEWS & VIEWS
Will the Time Inc. Spinoff Be Pushed Back to Second-Half 2014?
Tuesday, December 10, 2013
A Dec. 7 report by the Douglas McIntyre-led 24/7 Wall Street hinted at the further delay of the Time Warner spinoff of Time Inc. until second-half 2014 because of expectations that Time Inc. will likely "post poor financial results" in the fourth-quarter and in year-end 2013, and that the Joe Ripp-led new management will need time to implement "several options to reverse that trend in the new year."
Writes McIntyre: "Time Warner executives do not believe that the results of a major [Time Inc.] restructuring to lower expenses, or an acquisition that would add revenue to to Time Inc., would be financially evident until [financials for] the second quarter of 2014 [or later] are released to the public. And management would like Time Inc. to report its initial quarter as a public company free of special charges due to layoffs or the purchase of another business."
In third-quarter 2013, Time Inc. revenue fell to "813 million from $838 million [in third-quarter 2012], which is part of a pattern that extends back at least to 2008," according the recent document filed with the Securities and Exchange Commission that was a preliminary to the initial public offering.
One possible option for Time Inc. to increase revenues in 2014 is to buy Forbes Media LLC. CEO Mike Perlis announced on Nov. 15 the hire of Deutsche Bank A.G. "to advise on a possible sale" that would pay Elevation Partners $264 million for the 40%-to-45% stake that it took in 2006.
The other option to lower costs is more layoffs that would follow the 500 employees let go in early-2013.
The second-half-2014 IPO would, writes McIntyre, give Ripp "six months to take something to Wall Street other than the status quo."
If so, the spinoff will come one year after the second-half-2013 goal originally set in March 2013 by Time Warner CEO Jeff Bewkes.
Ripp denied the 24/7 Wall Street speculation at the December 9 quarterly meeting for 300 Time Inc. managers in saying--per AdAge.com, that the spinoff remains on schedule for second-half 2014. In a staff memo, he wrote that "we are...making good progress on selecting a board, finalizing our five-year strategic plan and acquiring the right talent to help us operate as a public company....The collective excitement for our future" was starting to build.
But at the meeting, newly hired chief content officer Norm Pearlstine (ex-Bloomberg L.P. chief content officer) said that the process will include more layoffs. Pearlstine did not give any specifics.
If you have breaking news to share please contact min's editors.
Up and Coming
Breakfast with the minsiders
Feb. 25 | NYC
Best Sellers in Media Awards
Entries Due: March 6
May 12 | NYC
Winter Reading Survey
Chance to Win a Gift Card
Take the survey! Deadline: Jan 30
Get even smarter. Need a quick primer on a media topic? Download a white paper!
Optimizing Your Printer Services - By MRI
Media Insights: minsider Viewpoints from the Front Lines - By min
|Copyright © 2015 Access Intelligence, LLC. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Access Intelligence, LLC is prohibited. For more details please see Terms and Conditions.|