No Time Inc. sales says Board, stock loses fifth of value; Microsoft Surface sales fall due to low price competitors
Morning Brief: Australian magazine RIDE Cycling Review will shutter its print edition, leading one commentator to wonder about the future of all magazines, part of the cycle of denial, panic and denial that all print professionals experience
The sale of Time Inc. is not happening, at least right now, as the Board of Directors has decided to stick with the current strategic plan, and with current CEO Rich Battista. Investors, disappointed that the company will not be sold, crushed Time stock last night with shares falling between 17 and 20 percent in extended (and now pre-market) trading.
John Fahey, Lead Independent Director, stated, “Time Inc. is one of the world’s leading multi-platform media companies, engaging over 170 million US consumers across digital and print every month through a portfolio of premium, iconic brands. We strongly believe in the future and potential of this Company. The Board has full confidence in Time Inc. President and CEO Rich Battista and the management team to execute on the strategic plan.”
While the company was never officially put up for sale, it might as well have been, as it accepted offers for review. Meredith was the most obvious suitor, with the Des Moines based publisher interested in many of Time’s monthly lifestyle titles, less interested in the weeklies.
Bids were rumored near the $20 per share level, a small premium over the stock was trading, but well above where it had been before the rumors began of a sale. Now, with the stock tanking, possible suitors will be in a good position to wait and see just how patient the board will be with management.
In an announcement this morning, Time laid out its strategy:
Time Inc.’s strategic plan includes:
- Continued growth in digital audiences and digital revenues led by branded/native content solutions and video
- Expanding and diversifying revenues and content through brand extensions across all areas, including TV, OTT, events, licensing, new products and strategic partnerships
- Further enhancing data, targeting and self-service programmatic capabilities
- Selective portfolio rationalization
- Continued aggressive reengineering of the cost structure of the Company
“Time Inc. is a reinvigorated company uniquely positioned to succeed in the multi-platform media marketplace with an exceptional set of brands and assets, tremendous scale and significant untapped potential,” CEO Rich Battista said in the statement. “The Company is better positioned to capitalize on this potential with its recent shift from a siloed, legacy publishing structure, to an integrated, enterprise platform structure. We are excited to execute on our plan as we have become a leader in digital and remain #1 in print ad revenue share. In addition, our transformation has brought a number of potential partners interested in working with us to unlock and accelerate value across our portfolio of brands.”
What comes next? Most expect more cost cutting, and some think that there is still a chance some titles will be sold off. That makes sense, assuming the strategy is to continue to push TV, online video and events. The titles Meredith was most interested in actually don’t fit into the strategy was well as titles such as Sports Illustrated and People. Besides, sale rumors are what drove the stock up to $18 to begin with, so there is value to make up now that investors have driven down the share price.
Amazon, Google and Microsoft all reported earnings after the bell yesterday, and for the most part, the sales revenue numbers were outstanding.
The one blemish was provided by Microsoft, who said sales revenue from its Surface tablet fell 26 percent, a decrease of $285 million.
The problem, according to Microsoft, lower priced competition. Did that competition include Apple’s new lower priced iPad, or only the knockoffs? We’ll probably learn early next week when Apple reports its numbers.
One of the things that companies like to do when they acquire a media property is have the old owner do the staff cutting for them before taking ownership of the property.
That appears to be what Bustle is having Daily Mail & Trust do for them, according to Keith Kelly at the NY Post.
Elite Daily axes 47 staffers ahead of sale
The Daily Mail & Trust cut 47 of the 94 staffers at its Elite Daily site just ahead of the April 17 sale of the millennial women’s destination to Bustle Digital Group, filings by the company with New York regulators reveal.
A Bustle spokesperson acknowledged that it was only taking about half the employees in the unit.
There is a familiar pattern to people’s attitudes towards print publications. First, seeing the growth of digital, there is denial. Print is enduring and will never end. Then, there is panic, as the numbers start to go south and titles are closed. Then, there is denial again, as some claim a resurgence for print, it will never die. What comes after that I don’t know, I hope it is wisdom, the knowledge that while things change, no format ever disappears forever (think vinyl LPs), but that the market does evolve and we all better evolve with it.
Australia must be in the panic stage, at least as evidenced by the article below. Don’t worry guys, the next stage will have folks proclaiming the rebirth of print.
(What motivated the story below was the news that RIDE Cycling Review would shutter its print edition.)
The beginning of the end for print magazines?
I was saddened to see that one of Australia’s most respected magazines, RIDE, just announced it will be finishing its print edition and going online.
RIDE publisher Rob Arnold said in a newsletter to his readers, “RIDE Media will continue to deliver transformative stories about cycling but in a more immediate manner, one that embraces the potential of modern technology: digital, video, newsletters … as well as print publishing and branded content.
“This is a time of significant change for media and we are going to respond to market demand.”
…The business of online publishing is at enormous risk. I hope magazines are able to stick it out for another five years, because I truly think they are the ones who have a model that works in the long-run. That is, a combination of a cover price and advertising to pay for it all, and to turn a profit so it can be done again. Dollars for pages turn into fractions of a penny with online advertising.