Time Warner 'in talks to sell magazines' including People, most profitable in the world
Media giant Time Warner has begun discussions to separate itself from Time Inc., its publishing division with $3.4 billion in annual revenue, according to Fortune magazine.
People magazine: part of big deal?
The credibility of the report is enhanced by the fact that it appears in Fortune, one of Time Warner's major titles. Fortune cites " three people familiar with the matter" in its story.
Meredith, publisher of Family Circle and the Ladies' Home Journal, based in Des Moines, is said to be in talks with Time Warner, according to two people familiar with the matter.
A meeting of the buyer's representatives occurred yesterday to discuss a potential deal, "which is still in a formative stage and may never come to fruition," said Fortune.
The plan is said to be for most of the company's publishing titles, such as People, InStyle, and Real Simple, would be rolled into an independent company and sold to Meredith.
Time Warner would maintain control of at least three titles—Time, Sports Illustrated, and Fortune, according to the sources.
A Time Warner spokesman says, "We never comment on speculations of this nature." A spokesperson for Meredith declined to comment.
The exact mechanics of the complex transaction were not available at the time of publication, said Fortune.
The move to divest Time Inc. -- the largest magazine publisher in the U.S. -- follows a decision by News Corporation, in the wake of the London phone-hacking scandal, to split its film and television business and publishing assets into two companies.
Time Inc. has become an increasing drag on its corporate parent, said Fortune. . Time Inc.'s revenue last year was just under 12% of Time Warner's total sales of $28.7 billion. The publishing unit generated $420 million in operating income in 2012.
Last month Time Inc. said it would lay off 6% of its work force. Time Inc. CEO Laura Lang -- who arrived a year ago from Digitas -- said "we must continue to transform our company into one that is leaner, more nimble and more innately multi-platform."
The People magazine franchise is the top prize in the deal, said Fortune It is said to be the most profitable magazine in the world.