Time Piece: Is Time Inc. Ready for a Spin-Out?

Jeff Bercovici is on vacation. Guest blogger Sean Elder submits:

Some people in the banking business say Time Inc. is to be spun off, probably in the next few weeks. The leading magazine publisher in the world is but a part of the Time Warner empire, of course, and not the most profitable part. The words "magazine publisher" and "profitable" are seldom used in the same sentence these days.

Warning signs include the way they unceremoniously dumped Business 2.0 a few weeks ago, turning down offers from rivals such as Mansueto Ventures (Fast Company) and using surviving staff members to fatten the masthead at Fortune.

"It wasn't a big enough loss for the market to care," according to one who has been apprised of the thinking behind the deal. "I think they are scrubbing the quarterly numbers for the Time Inc. division, to get ready for a spin-out."

This is not the 1966 Elvis Presley racing flick but the act of splitting off of one division of a company as a separate entity. And this would not be a leveraged buy-out, our source tells us, or a private equity deal. But quite likely we are seeing a prelude to an IPO. Insiders also point to the recent restructuring over there, with the staff-reducing buyout packages that cleared the benches (though not necessarily the dead wood) from such venerable titles as Sports Illustrated and Time itself.

by Sean Elder

Update: Time Warner's communications chief Ed Adler on Thursday denied the idea of a Time Inc. spinoff. "It's not true," he said. He also noted that I should have sought Time Warner comment on the bankers' musings before posting on Wednesday.