Time Inc. Is Preparing to Head Out on Its Own

Within the next six months, its parent, the media conglomerate Time Warner, hopes to spin off Time Inc. into a separate public company. But if the plan succeeds, Time Inc. will become independent at a difficult moment. Not only do the magazine industry’s fortunes continue to sag, but Time Inc. has also shown signs of instability. It has churned through three chief executives in the last three years, and lost a star editor, its former editor in chief Martha Nelson.

To combat these negative forces, Time Inc. will abandon the traditional separation between its newsroom and business sides, a move that has caused angst among its journalists. Now, the newsroom staffs at Time Inc.’s magazines will report to the business executives. Such a structure, once verboten at journalistic institutions, is seen as necessary to create revenue opportunities and stem the tide of declining subscription and advertising sales. 

Overseeing these changes is Joseph A. Ripp, a former longtime Time Warner official who became Time Inc.’s chief executive in September. In an interview, Mr. Ripp said it was refreshing to shake things up. In recent months, he confirmed publicly that there would be additional layoffs in 2014. He has also expressed openness to initiatives, including expanding the company’s television programming and conference businesses.

“Because we were part of a larger media conglomerate, our ability to expand outside of print magazines was always restricted,” said Mr. Ripp, who explained that Time Warner’s television and film businesses often hampered the magazines’ ability to move into video.

Time Warner is not alone in separating ailing print assets from more profitable businesses. In 2014, Tribune Company will try to split its newspapers from its television and digital units. And this year, News Corporation cleaved its film and TV businesses from its newspaper and publishing arms. 

In going it alone, Time Inc. will returns to its roots as a stand-alone company, which was co-founded in 1922 by the publisher Henry Luce. Roughly a quarter-century ago, Time Inc. merged with Warner Communications. Today, Time Warner is a media and entertainment giant with a $63 billion market value and profitable assets likes HBO. But in recent years Jeffrey L. Bewkes, Time Warner’s chief executive, has shrunk the company, discarding businesses like AOL and Time Warner Cable to concentrate on film and television. 

Next on the spinoff block is Time Inc. To run the magazine business as a separate company, Mr. Bewkes hired Mr. Ripp. He assumed the post this summer from Laura Lang, who lasted only 15 months in the job. She had succeeded Jack Griffin, who was forced out after less than six months in 2011.  

Mr. Ripp, 61, a former chief financial officer at Time Warner, said that while he moved to restructure Time Inc. and push it into new businesses, he recognized that the company’s value was tied to its magazines’ credibility.

But he draws a distinction between the journalistic standards applied to magazines like Time and those for lighter fare, like Cooking Light. Would it be an ethical breach for an executive on Time Inc.’s business side to suggest a certain type of cream cheese to be used in a frosting recipe? By Time Inc.’s old standards, it would be.

“We will never, ever, ever, violate our trust with consumers,” Mr. Ripp said. “If you look at journalism at Time Inc., we have applied the concepts equally to covering budget deficits and food titles. Service journalism can be different.”

To mediate any disputes and help the newsroom side maintain its independence, Mr. Ripp recently rehired Norman Pearlstine, Time Inc.’s former editor in chief, to become the company’s chief content officer, essentially acting as a corporate referee. 

Article source: http://www.nytimes.com/2013/12/30/business/media/time-inc-is-preparing-to-head-out-on-its-own.html?partner=rss&emc=rss