The parent company of Time Inc., Time Warner, will be portioning off the historic magazine into a separate company. Time Inc. itself will becomes an individual, publicly traded company.
The news was officially announced this evenring , Laura Lang the CEO of Time Inc. will step down from her position; a new CEO was not named at this time. According to Jeff Bewkes, the chairman and CEO of Time Warner, the company will focus on its more successful brands in film and television. In these two realms Time Warner is still thriving, with companies like HBO, New Line Cinema and Warner Bros. under its umbrella.
The move to sequester poor performing companies within Time Warner isn’t new to the company. In the last eight years it has portioned off Time Warner Cable, AOL, Time Warner Book Group and Warner Music Group.
In an official statement from Bewkes the CEO stated, “After a thorough review of options, we believe that a separation will better position both Time Warner and Time Inc. A complete spin-off of Time Inc. provides strategic clarity for Time Warner Inc., enabling us to focus entirely on our television networks and film and TV production businesses, and improves our growth profile”. Bewkes continued, “Time Inc. will also benefit from the flexibility and focus of being a stand-alone public company and will now be able to attract a more natural stockholder base. As we saw with the prior spin-offs of Time Warner Cable and AOL, we expect the separation will create additional value for our stockholders”.
The original plan was for Time Inc. to sell off the majority of its magazines to Meredith Corp. If that deal went forward Time Inc. would have still owned Time, Sports Illustrated, Fortune and Money, but that deal fell apart in the end. The New York Times stated that deal did not move forward because Meredith Corp. refused to buy all 21 magazines and instead would only purchase 17. The reported change will go into effect later this year.