Time Inc. lost one of its most senior executives, Paul Caine, who is resigning to become the CEO of syndicated radio distributor Dial Global, which has experienced some financial turmoil of late and is in the process delisting from Nasdaq.
Caine, a 23-year Time Inc. veteran, had been the chief revenue officer as well as a corporate executive vice president and the president of ad sales.
His exit suggests he was negotiating to leave even as talks of a pending merger with Meredith — which ultimately collapsed — were under way. And he is not sticking around now that Time Warner is proposing to spin off Time Inc. into its own publicly traded company. CEO Laura Lang has announced she will step down after just 15 months on the job.
Time Warner is expected to look outside for a replacement.
One source said that Caine was told that he was not a candidate for the top spot and that there was no guarantee that he would be “tucked in” and protected when the spin-off takes place.
Two big worries now face Time Inc.
Caine rose through the ranks at the company’s most profitable title, People, and hired many of the individual publishers when he was heading the Style & Entertainment Group. So his departure could spark other exits.
More importantly, Caine was the face of Time Inc. on Madison Avenue.
“If you think of Time Inc., you think of him,” said one ad agency big wig. “He deserved to be CEO.”
Added another exec: “He [Caine] played a very big role because Laura did not know print. My guess is he left because he did not get her job.”
Other sources say Caine would have considered staying if some of the changes he had tried to make during the past few years had been implemented. “How long can you hear, ‘wait until the new CEO is hired?’” said one insider.
Caine himself said of his decision to jump to Dial Global, “This is a conversation we’ve been having for a little while. I think Time Inc. is in good shape going forward, and this was a great opportunity for me.”
Dial is controlled by Oaktree Capital, a private-equity firm. The Gores Group owns a smaller stake left over from its earlier buyout of Westwood One, which was taken over by Dial last year.
Shortly after the merger was completed, the private-equity owners, which now have about 90 percent of the stock, decided to delist and go private.
Dial recently renewed its deal to distribute radio broadcasts of NFL games including the playoffs and the Super Bowl through 2016 and has rights to NCAA men’s basketball through 2024. It also distributes the Grammys and radio talker Charles Osgood as well as CBS News Radio, NBC News Radio and NBC Sports Radio.
The executive suite at Dial Global will be empty when Caine arrives. David Braun resigned as co-CEO last month, and yesterday CEO Spencer Brown and President Ken Williams said they were leaving on April 5 — as Caine starts.
Loomis musings
Laura Lang bowed out of an appearance before the Time Inc. alumni club, which gathered in the ninth floor dining room of the Time & Life Building last Thursday. She was replaced by Fortune senior editor at large, Carol Loomis.
In her address, according to people in the room, Loomis said that while the corporate brass are selling the Time Inc. spin-off as a good thing for Time Inc., she is a little more skeptical.
Loomis told the alumni that it all depends on the level of debt that is put upon the new company, adding that a debt load “between $500 million and $1 billion is bearable.”
She said a debt burden of $2 billion would be “problematic.”
Loomis did not touch on any of the rumored valuations of Time in her remarks or how the company would eventually pay for the assets and expand its brands.
She did say that she felt Time Warner CEO Jeff Bewkes would want to avoid saddling the new publishing entity with a ton of debt because he “doesn’t want to be hated” for putting together a deal that would lead to Time Inc.’s ruin.
She also ventured that there is a remote possibility of a surprise suitor — and she tossed out the name Michael Bloomberg. She said she thought the odds of that happening were long.
Loomis is believed to be longest-serving editorial employee ever at Fortune, having started there in 1954.
She is well-known for her financial acumen and her close relationship with Warren Buffett. She began covering him for Fortune in the early 1960s.
Some of the best Fortune articles on Buffett were turned into the 2012 best-seller “Tap Dancing to Work.” Loomis was also the pro bono collaborator on several of Buffett’s folksy annual letters to shareholders of Berkshire Hathaway.
Asked by the alumni if she thought her longtime friend would have any interest in Time Inc. she said, “I doubt he’d be interested.”