Time Warner to spin off print titles to separate company, rather than do Meredith deal

[This post and the headline have been updated] 

[Update: Rather than sell its magazines to Meredith Corporation, Time Warner has decided to create a separate, publicly trade magazine publishing company, holding its Time Inc. print titles and leaving Time Warner to concentrate on its TV business. According to a story in Broadcast & Cable, Time Warner  CEO Jeff Bewkes issued a statement that said:

"After a thorough review of options, we believe that a separation will better position both Time Warner and Time Inc. A complete spin-off of Time Inc. provides strategic clarity for Time Warner Inc., enabling us to focus entirely on our television networks and film and TV production businesses, and improves our growth profile."

The spinoff strategy is similar to what Time Warner did when it shucked AOL.

Meredith CEO Stephen Lacy said: 

"At Time Warner's initiation, we discussed combining our National Media Group with certain Time Inc. brands to create a new publicly traded company.  There are natural synergies between our two portfolios; however, we respect Time Warner's decision and certainly remain open to continuing a dialogue on how our companies might work together on future opportunities."]

The natter around the industry was that the improbable sale of Time Inc. titles to Meredith Corporation was the ultimate done deal...but perhaps not. Nobody gave much thought to the awkward fit, apparently.

According to a report by the redoutable and usually very well-informed media maven Keith Kelly in the New York Post, no face-to-face talks are taking place or are scheduled and executives from both companies are mum about the deal.

The negotiations, which had been going on since September, were revealed last month in a posting by Time Inc title Fortune and widespread reports were that this deal was solid, with Time Warner boss Jeff Bewkes eager to offload most of the company's Time Inc. titles, including People, InStyle and Real Simple for a reported $1.7 to $2 billion.  

A bigger issue than money could be the intense culture shock from merging New York-based Time Inc. with Meredith, whose headquarters are in Des Moines, Iowa. 

Although People has had troubles on the newsstand in recent years, it remains far and away the most profitable magazine in America with its mix of celebrity news and human-interest stories. Meanwhile, InStyle is a leader in the fashion category. 

Neither of those topics has gained much traction at Meredith, which has stuck to monthly women’s service magazines. 

With Bewkes apparently committed to dumping the declining Time Inc. titles, the debate now is what will happen to the group next and whether a new suitor will appear. 

“Morale is terrible,” said one insider. “There’s a lot of anger at Bewkes over the way he mishandled Time Inc.,” said one source.

We can imagine.  And even if this deal has hit the wall, these magazines are now in play; somebody will be buying some, or all, of them.