Time Warner Inc. (NYSE:TWX) has been the 800-pound gorilla of the media scene over the last decade, compiling holdings in almost every realm of the sector from cable companies to the Internet to magazines to niche television cable channels. Yet having all those interests under one roof hasn't necessarily worked the way the company hoped, resulting in Time Warner's recent moves to start spinning off and divesting assets. The next thing to go? It will likely be the media company's namesake magazine unit, Time Inc., according to Gordon Crawford, managing director of the Capital Group, Time Warner's largest shareholder.
"Time Warner just spun off their cable division, they are going to sell their print division, they are going to spin off AOL and they're just going to be Warner Brothers, HBO and the Turner Networks," Crawford said at a conference last week. "Now, they will make acquisitions ... but they're probably going to buy just stuff in their wheel house of those businesses. They're not going to, I don't think, go very far afield from their core competency."
The news of Time Warner intent to sell its magazine publishing group is nothing new to analysts who began over the summer suggesting the move would benefit the company.
But finding a buyer might prove to be difficult considering the tight credit environment and sluggish advertising market. Peter Kafka of All Thing Digital as well as many other media experts have said that Time Warner will likely pare down from its 23 magazine titles and only hold onto a core group.
Kafka quotes a Time Warner insider: "Time Warner without People? I can't imagine it." But who knows, if the money is right, Time Warner executives would definitely consider it. Remember, cash is king nowadays, and the New York-based company would like its wallet completely full rather than hold onto an asset with limited growth possibilities. - Gerald Magpily
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