While those inside Time Warner Inc. anxiously await what CEO Jeff Bewkes will focus on next, having just shuttered or consolidated three studios in the media conglomerate's filmed-entertainment division, many on the outside believe he'll set his sights on Time Inc. And within this publishing division, Southern Progress Corp. is being tipped as a standalone unit that's ripe for an auction.
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"It all depends on how serious Bewkes is about pursuing growth,"
said one media investment banker, whose motivation may include wishful
thinking but whose conclusion was presented as a no-brainer. "It's the
slowest-growing group in the slowest-growing division."
The characterization isn't technically true: Time Inc. posted flat
revenue for the first quarter, whereas Time Warner's AOL division
experienced a 23% decline. Meanwhile, Time Inc.'s operating income
before depreciation and amortization jumped 73% on the quarter -- mostly
due to declines in restructuring costs and overhead expenses -- compared
with only a 2% increase for Time Warner's vaunted networks division.
To many, though, the characterization rings true enough. Of Time
Warner's five divisions, publishing is the smallest, its quarterly
revenue of $1 billion accounting for 9% of the corporate total. And its
quarterly Oibda of $145 million contributed only 5% to the corporate
total, almost half as much as the second-poorest contributor, the
recently pared filmed-entertainment division.
See the full story from The Daily Deal. - Richard Morgan
