-By Warner Todd Huston
Time Warner is looking for a way to throw in the towel on its magazine holdings by selling them off to Iowa-based Mederith Corp. and possibly ending its reign as the nation’s largest magazine publisher.
Reports from those close to negotiations say that Time Warner would retain its newsweekly, Time magazine, as well as Sports Illustrated and Forbes. But Time Warner would hand over titles such as People, InStyle, and Real Simple among others.
Sources claim that the proposal would see Time Warner and Meredith spin off their magazine holdings into a new, separate company. This plan, it is said, would afford Time Warner some new tax benefits.
With the exclusion of the aforementioned titles, Time Warner’s magazine holdings are estimated at between $2.4 and $2.9 billion.
Time Inc. has had quite a lot of trouble with its magazine empire. According to The Wall Street Journal the magazine division’s “revenue fell 7% to $3.4 billion and operating income declined 25% to $420 million because of lower advertising and subscription revenues.” The Journal went on to note that there are plans afoot to “cut the workforce by 6% in a bid to cut costs, leading to a $60 million restructuring charge in the first quarter.”
So, why would Time Warner want to keep Time magazine at all if it is losing so much money? Imagine the public relations hit Time Warner would take if it lost its flagship property. This seems like a calculated loss as opposed to a sensible business decision.
“The only end of writing is to enable the reader better to enjoy life, or better to endure it.”
Warner Todd Huston is a Chicago based freelance writer. He has been writing opinion editorials and social criticism since early 2001 and before that he wrote articles on U.S. history for several small American magazines. His political columns are featured on many websites such as Andrew Breitbart’s BigGovernment.com, BigHollywood.com, and BigJournalism.com, as well as RightWingNews.com, RightPundits.com, CanadaFreePress.com, StoptheACLU.com, AmericanDaily.com, among many, many others. Mr. Huston is also endlessly amused that one of his articles formed the basis of an article in Germany’s Der Spiegel Magazine in 2008.
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