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Time Warner’s Jeff Bewkes to Cast Off Magazines, After Sale Fails

Time Warner CEO Jeff Bewkes ready to spin off magazines.

Time Warner CEO Jeff Bewkes ready to spin off magazines.

Time Warner Inc. Chief Executive Jeff Bewkes is ridding the company of its shrinking magazine empire one way or the other. After failing to find a buyer for such flagship publications as Time magazine and Sports Illustrated, he intends to spin them off by the end of the year.

The magazines will become a separate publicly traded company to give Time Warner “strategic clarity.”

By that, he means the company will focus instead on its television properties TNT, HBO and and perennial news channel laggard CNN. He likened the move to previous spin-offs of company’s previous of Time Warner Cable and fading online giant AOL.

While the move bodes well for Time Warner, the magazine unit has been cast to an uncertain fate. U.S. magazine advertising revenue fell 3 percent in 2012 to $21 billion, according to the Publishers Information Bureau, and investors are turned off to print media. Time Warner shares were up in pre-market trading.

The company has been shopping the magazines for an asking price believed to be in the neighborhood of $2.5 billion. The move got a thumbs down from Time Inc. Chief Executive Laura Lang, who said she is stepping down. “Taking the company through a transition to the public markets is not where my passion lies,” she reportedly said in a memo.

Time Inc. is already pulling in its sails and getting ready to batten down the hatches for what is expected to be a rough ride ahead. Lawyers for the company are attempting to rein in use of its content, particularly from Sports Illustrated’s popular swimsuit issue.

Take-down notices have gone out to websites alleging copyright infringements, even though the company in the past has encouraged use of the photos as a way to promote the magazine issue. The move can only hurt the magazine and sales and also shows the backward thinking of how the Internet works to support a brand.

Established media companies from The New York Times to The Washington Post are struggling to figure out how to save what were once comfortable monopolies in defined markets. They web has made any newspaper instantly accessible, not to mention thousands of blogs all competing for readers the big media companies once took for granted.

Despite massive investments in online operations, websites like The New York Times’ continue to remain unprofitable.


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