Time Warner to spin off its publishing arm by year end
Move will help US firm focus on television and film operations after failures to sell some titles
Time Warner says it will spin off its publishing arm, Time Inc, by the end of the year, allowing the United States conglomerate to focus on its television and film operations.
Chief executive Jeff Bewkes said on Wednesday that a spin-off "provides strategic clarity" for the media-entertainment giant.
The announcement comes after unsuccessful talks to sell some of the titles in the Time Inc group, and as rival News Corporation is undergoing a similar split of its entertainment and publishing operations.
Time Warner said its board had authorised management "to proceed with plans for the complete legal and structural separation of Time Inc from Time Warner" which would make the publishing unit a "an independent, publicly traded company".
Time Inc publishes 21 US magazines, including its flagship Time magazine, People, Fortune and Sports Illustrated. It has 25 websites and several international magazines including global editions of Time and Fortune and publishing operations in Britain and Mexico.
Bewkes said that "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 said.
Time Inc, he said, would 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".
Time Inc chief executive Laura Lang has agreed to stay in the job until after a successor has been identified, the firm said.
The breakup of Time-Warner will mark a further unraveling of what had been one of the largest US corporate empires.
The group's heritage dates back to the founding of Warner Bros studios in 1918 and Time magazine in 1923. The two groups completed a merger in 1990, and a decade later Time Warner was acquired by the internet firm AOL. The AOL deal, which was based on the inflated share price of then-America Online, turned out to be a disaster and the unit was separated in 2009. The split "strongly parallels what News Corp is doing", said Ken Doctor, a media analyst at the research firm Outsell.
Rupert Murdoch's News Corp, a key rival to Time-Warner, has announced plans to split off its publishing arm and create two separate firms. That will produce one firm with declining newspaper assets, another with fast-growing film and television operations. "What they are saying is that the print business, which is going digital, has a long slog," Doctor said.