Here’s why Time Warner is spinning off its magazine division

On March 6,  Time Warner surprisingly announced that it would spin off its magazine publishing division, Time Inc., into a separate public company. The company had previously been in talks to merge parts of the Time Inc. magazine portfolio with Meredith to form a new company, but the negotiations fell apart over some of Time’s most prestigious titles – Time, Sports Illustrated, Fortune and Money – which Meredith didn’t want to include in the deal.

Time Warner’s magazine business hasn’t been spared by the industrywide declines and Time Inc.’s results have consistently lagged behind those of its parent company in recent years. From 2006 to 2012, revenue of Time Warner’s magazine division dropped 35 percent, while the company’s overall revenue grew 15 percent.

Time Inc. will be the latest in a row of prominent assets that Time Warner has freed itself of. In recent years, the company spun off AOL, Time Warner Cable and the Warner Music Group, in a bid to re-focus on its TV networks and filmed entertainment divisions. The spin off is scheduled to be completed by the end of the calendar year.


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