The Time Inc. shake-up shakes out; Marty Peretz concern-trolls Chris Hughes
The Lineup collects the media stories, big and small, that aren't on our radar each day.
After Fortune broke news yesterday afternoon that its parent company, Time Warner, was in talks to sell most of the magazines of Time Inc. (excluding Time, Fortune and Sports Illustrated), it was left largely to other corporate-media correspondents to scramble for the details of the deal for today's papers.
The New York Times and The Wall Street Journal, with nine reporters assigned to the story between them, appear to have the two most comprehensive accounts so far.
Time Warner is in early discussions with the Meredith Corporation to put most of Time Inc.’s magazines — including People, InStyle and Real Simple — into a separate, publicly traded company that would also include Meredith titles like Better Homes and Gardens and Ladies’ Home Journal.
The new company would then borrow money to pay a one-time dividend back to Time Warner, essentially turning what appears to be a corporate spinoff into a sale. The figure being discussed is $1.75 billion, according to the people involved in the negotiations, who requested anonymity to discuss private conversations publicly.
The deal would mean big changes for the much smaller Meredith, which owns TV stations in addition to its magazines. The entire company, which is based in Des Moines, Iowa, has a market capitalization of about $1.7 billion; one banker said that Time Inc., which publishes 93 magazines world-wide, including 21 in the U.S., would be worth about $3 billion.
John Janedis, an analyst at UBS, UBSN.VX -0.77% estimated that Time, Sports Illustrated and Fortune—which Time Warner would keep in the proposed deal—account for less than 10% of Time Inc.'s earnings before interest, taxes, depreciation and amortization. He said that, with those titles removed, the value of the company's magazine assets would be between $2.4 and $2.9 billion.
Simone Foxman of Quartz, meanwhile, has some ideas about why Time Warner would want to unload People, the one cash cow of the bunch:
Although People has an online presence as well as a magazine, its parent may have decided that the magazine’s preeminence is not lasting. Competition from a variety of online entertainment blogs—most prominently Perez Hilton and even Gawker—may have convinced the company that keeping the magazine on top will take copious investment in digital, money it isn’t interested in spending. Perhaps Time Warner has decided to unload the golden goose before it turns into base metal.
In other news...
Martin Peretz no longer recognizes The New Republic. [The Wall Street Journal]
Scott Brown's Fox News debut. [Politico/On Media]
Tuesday's State of the Union was the lowest-rated since 2000. [Politico/On Media]
But it gave CNN a ratings boost (along with the Chris Dorner manhunt). [NYT/Media Decoder]
Erik Wemple on Breitbart.com's "Web-based, junior-varsity reputation-sullying campaign" against Gabe Sherman and his forthcoming Fox News book. [The Washington Post]
Quote of the day...
As editor of a venerable, 175-year-old newspaper, it can be hard to lose a local story to a bunch of profanity-loving kids from a New York-based website*. But the inability to accept that Deadspin is a legitimate news outlet -- and a strong one at that -- is so archaic and tin-eared I'm surprised Murray could even figure out how to post it online.
@joshsternberg Our working theory is that people read short and they read long but that 500-800 words is a no-man's land to be avoided.— Zach Seward (@zseward) February 14, 2013
To avoid jetlag in London, I've stayed on NY time, watching Downton Abbey until 3am. Maggie Smith is the world's greatest living actress.— Piers Morgan (@piersmorgan) February 14, 2013
Bill O'Reilly vs. Howard Kurtz on media coverage of drones:
Michael Wolff schools HuffPost Live on the business of Fox News: