Time Warner has found its magazine division all too quittable: after an unsuccessful attempt to sell off the print division which puts out Time, People, Sports Illustrated, it has decided to just split it off into its own business, and hope stock investors come along who like to look at glossy magazine. It’s a similar to the move
Mr. Burns Rupert Murdoch pulled recently, splitting Fox into two divisions: The Fox Group, which includes movies and TV, and News Corp., which includes the newspaper division.
It isn”t the first time Warners has divested itself of a pesky business division — the the last 10 years they’ve spun off Warner Music, AOL, Time Warner Cable, Warner Books and now their magazines.
Time Warner chairman-CEO Jeff Bewkes is fully absorbed in the challenges of making and managing content in a rapidly changing video market. He said the newly streamlined Time Warner will now be able to focus entirely on its television networks, film and TV production business. He said the decision to initiate a split came “after a thorough review of options” and “will provide strategic clarity for Time Warner.”
Time “will also benefit from being a standalone public company able to attract a more natural stockholder base,” meaning investors who like the magazine business.
Translation: “By leaving the baby in a sack along the road, it will learn valuable skills of independence.”
As harsh as it sounds the magazine division just wasn’t a huge profit center, accounting for a mere $3.4 billion of Warner’s $28.7 billion 2012 revenue, on operating revenue was $420 million.
A couple of people have written here in wondering what’s to become of DC in all this. Well, you’ll recall it’s not DC Comics anymore but DC Entertainment — DC’s comics division was long ago structured as part of the the movie division, one of the moves former President Paul Levitz encouraged to avoid just such an event as being set adrift in a boat with a tiger named The Internet.
More interesting, to us anyway, is the avoidance, in a single story we’ve read about this split, of mentioning Entertainment Weekly, once the gem in the crown of Warner’s entertainment reporting, and also a sure bet to include whatever Warner’s biggest movie of the season was on the cover (and cover DC Comics exclusives.) We could definitely see that changing a little (although to be fair EW has always covered other studios in depth.)
Also, for those of you who enjoy a ghostly montage set to a Sara McLachlan song, here’s a memory of the announcement of the Time Inc and Warners merger back in 1989:
“There will emerge on a worldwide basis, six, seven, eight vertically integrated entertainment conglomerates,” he told me. “At least one will be Japanese, probably two. We think two will be European. There will be a couple of American-led enterprises, and we think Time is going to be one.” Levin backed up his boss: “This is not a transaction done for the purposes of 1989, or even the nineteen-nineties,” he said. “It is for us to be positioned for the next century.”
Vertical integration. So 20th century.