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Time Warner’s decision to unload all of Time Inc. plunged the publishing division deeper into turmoil after months of uncertainty.
The media giant revealed yesterday it would move ahead with a spinoff of all its magazines into a separate company by the end of the year, instead of selling most of the titles to rival Meredith.
“Some people are relieved, but others are pretty nervous,” said one insider. “It could potentially be a good deal for us, but there will be a period of uncertainty.”
Time Inc. CEO Laura Lang — who has held the job for only 14 months — will step down following the split, leaving the company to look for her successor.
In retrospect, the hiring of Lang, who had no publishing experience and was running ad agency Digitas before she joined Time Inc. in January 2012, proved disastrous.
Insiders said that Time Warner CEO Jeff Bewkes grew impatient with publishing because he had lost confidence in her ability to turn it around.
Still, the move elicited condemnation from a number of Time Inc. insiders who feel they have suffered ever since Bewkes, who hails from the TV side, ascended to the top job in 2008.
Lang came on board after the even more tumultuous tenure of Jack Griffin, a former top executive at Meredith who took over as Time Inc. CEO in September 2011.
Griffin was ousted after just five months on the job for clashing with entrenched executives. Bewkes said his style was incompatible with Time Inc. and Time Warner.
An interim triumvirate was installed while Bewkes searched for nine months for a permanent successor.
Several insiders yesterday blamed Bewkes for the abrupt shift in strategy and a lack of direction at the top.
“Jeff [Bewkes] and [Time Warner CFO] John Martin hate the publishing business, are bad leaders themselves and recognize they made another bad hire” in Lang, said one insider.
In a statement, Bewkes said: “A complete spinoff 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.”
The new magazine publishing company still will be the largest in the world and will include Time, People, Sports Illustrated and Fortune. Last year the titles generated $3.4 billion in revenue, down 6.6 percent from 2011, and $420 million in operating profit, off 25 percent.
Bewkes did not mention the failed talks with Meredith that had broken off last week.
Under that plan, most of the Time Inc. titles, including People, InStyle and Real Simple, were going to be spun off into a new publicly traded company controlled by Meredith, whose magazines include Better Homes & Gardens and Ladies’ Home Journal.
Meredith acknowledged the talks for the first time yesterday. “At Time Warner’s initiation, we discussed combining our National Media Group with certain Time Inc. brands to create a new publicly traded company,” the firm said in a statement.