Time Warner Might Sell Most Time Inc. Magazines

2. Jeff Bewkes
Michael Loccisano/Getty Images

Chairman and CEO of Time Warner

From the Time Warner Center in Midtown Manhattan, Bewkes oversees Hollywood's most profitable studio, Warner Bros., which has scored with the Harry Potter juggernaut; cable networks including HBO, CNN, TNT and TBS; and increasingly digital magazines including Time, People and Sports Illustrated. Bewkes led Time Warner to $5.4 billion in operating profit last year, exceeded only by West Coast-based Disney.

Early discussions could lead to People, Real Simple, InStyle and other titles being sold to Meredith Corp., publisher of Better Homes and Gardens and Ladies' Home Journal.

Time Warner Might sell nearly all of its Time Inc. magazines -- the exceptions being Time, Sports Illustrated and Fortune -- to an interested buyer, Fortune magazine is reporting.

The deal would include such titles as People, Real Simple and InStyle, according to the report. A meeting on the deal was scheduled for Wednesday.

While the Fortune article did not initially name the primary suitor, a subsequent story in The New York Times says it is Meredith Corp., which publishes such venerable women's titles as Ladies' Home Journal and Better Homes and Gardens.

Shares of Time Warner initially leapt 2 percent on strong volume after the story in Fortune, which cites three anonymous sources. Most of the gain, though, quickly disappeared, and Time Warner refused to comment on the report.

At the end of trading Wednesday, Time Warner stock was up less than 1 percent to $52.85.

News that the publishing division might be on the auction block comes on the heels of buyouts and layoffs. Entertainment Weekly TV critic Ken Tucker, who helped launch the magazine in 1990, announced Wednesday that he, too, was taking a buyout.

Speculation that Time Warner would shed its publishing assets has come and gone for years, and investors and analysts usually seem bullish on the prospect. In 2012, publishing revenue dropped 7 percent to $3.4 billion as revenue at the conglomerate overall slid 1 percent to $28.7 billion.

Chatter surfaced recently again that Time Warner might be wise to split its publishing assets from its TV and film assets after Rupert Murdoch said last year that News Corp. would be doing just that. Since News Corp. made its intentions known in June, its stock has advanced 30 percent, while Time Warner shares have surged 40 percent in that same time frame.

The Fortune story notes that Time Warner CEO Jeff Bewkes recently might have signaled a desire to sell magazines when he told CNBC that "there's tremendous resilience in the national magazine publishing business." In the same interview, he referred to Time Warner as "a great storytelling company, whether in film or TV," noticeably leaving out magazines.

Fortune says that Chicago merchant bank BDT Capital Partners is advising Time Warner on its potential deal to sell most of its magazine-publishing business.