The spinoff of Time Inc. will need more time.
Jeff Bewkes, the CEO of the magazine publisher’s parent, Time Warner, had hoped to float the IPO in the second quarter of 2014 but is now resigned to the fact it will take several more months, according to a published report.
With the prospect of poor results in the current quarter following similarly underwhelming results in the prior one, Bewkes is now eyeing a third- or fourth- quarter initial public offering for Time Inc., the publisher of Time, People and Sports Illustrated.
That should give the company time to re-invigorate revenue and profits through recent structural changes, insiders told 24/7 Wall Street, which first reported the delay.
Time Inc., in the third quarter, reported that print ad revenue was off and also hinted that digital ad revenue wasn’t growing. It doesn’t break out digital ad revenue.
At least three major website relaunches are under way to help turn around the lagging ad revenue trend, sources have told The Post. Flagship Time.com is imminent, with SI.com’s relaunch not far behind.
Earlier this year SI.com regained control of its website from Time Warner’s Turner Sports Network.
Fortune and Money also have to undergo a major launch of a new site because, as The Post previously reported, its joint venture with the CNNMoney web site will be dissolving on May 31.
On top of that, newly installed Time Inc. CEO Joe Ripp has said he plans to “dramatically” increase its use of “native advertising,” or sponsored content by advertisers that are made to blend into editorial, primarily on websites.
But the FTC recently warned the industry that making the blend too seamless could be a problem that draws the agency’s attention if consumers are illegally misled.
Ripp is also expected to tell top managers at a Monday meeting that they must embark on cost controls that will trim another $125 million in 2014, which, insiders say, could trigger layoffs. The company early this year laid off about 500 people, amounting to some 6 percent of its workforce.
The expected delay for the Time Inc. spinoff is the second setback for Bewkes, who first eyed a late 2013 deadline.
Bewkes wants the spinoff to come sooner rather than later, while Ripp would like a longer lead-in for some of his changes to have an impact, according to insiders.
Time Warner would like to guarantee that Time Inc.’s first quarter as a separate company is “free of significant special charges due to layoffs or the purchase of another business,” 24/7 Wall Street reported.