Time Inc. to Set a Lonely Course After a Spinoff
Sometime late next year Time Inc., the company that all but created the modern magazine business, will leave its home of more than five decades, the Time & Life Building in Rockefeller Center, and head to new quarters in downtown Manhattan.It is a pragmatic move aimed at reducing costs, but one filled with symbolism for a company that is starting over in fundamental ways.
On Monday, the nation’s largest magazine publisher will begin trading as an independent company — stock symbol: TIME — with an uncertain future.
What was once a jewel in terms of profit and stature is now a drag on the share price of Time Warner, its parent company, and is being spun off with little ceremony and a load of debt. Absent the diversified portfolio of Time Warner, Time Inc. will be going it alone with more than 90 magazines and 45 websites in a market that views print as a thing of the past.
The new entity will start off with $1.3 billion in debt, including $600 million that will go toward a one-time cash dividend to Time Warner shareholders. That stands in stark contrast to Rupert Murdoch’s News Corporation, which was given a $2 billion cash cushion when it was spun off into a separate company last year. At approximately three times earnings, Time Inc.’s debt is high-risk, and Moody’s has rated it at less than investment grade.
Sad, in a way. I remember when TIME & Newsweek were reputable magazines – now Newsweek is web-only and TIME is a shadow of its former self. Maybe in a few years somebody can pick it up cheap in bankruptcy and turn it around.