Last Friday Time Inc. (NYSE: TIME), publisher of Life, Cooking Light, Money and Sports Illustrated, released a statement saying that, despite media speculation, the company was not for sale and would pursue its own strategic plan to affect a transformation. Time did, however, evaluate “a number of expressions of interest” with the help of external advisors as it considered its options. The company did not name specific bidders or details of the proposed bids.
“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. 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,” said Rich Battista, Time Inc. president and CEO.
“Advertisers are looking for fewer, bigger partners. Our unique combination of iconic brands and premium, safe content environments, large audiences across platforms, and data and people-based targeting capabilities enables us to offer them differentiated solutions at scale. Today we have affirmed that we remain on track with our financial outlook for the year. I look forward to continuing to work with the Board and our extraordinarily talented team to deliver value to Time Inc.'s shareholders, consumers, and advertising partners,” Battista added.
In the statement, Time Inc. outlined its strategic plan which includes:
We have a three webinars coming up this month that you will not want to miss.
- Continued growth in digital audiences and revenue, led by branded, native content solutions and video
- Expanding and diversifying revenue and content through brand extensions across all areas, including TV, over-the-top (OTT) TV, events, licensing, new products and strategic partnerships
- Further enhancing data, targeting and self-service programmatic capabilities
- Selective portfolio rationalization
- Aggressive “reengineering” of company costs
John Fahey, lead independent director of Time Inc.'s board, spoke in support of the action.
“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,” Fahey said.
Prior to Friday's statement, the media had reported that a number of investors were interested in bidding on Time Inc. At the end of February, the New York Times said five parties were considering putting in a bid for Time Inc., including Meredith Corp. Bids were due in early March. It seems that none of those options were appealing enough, so Time Inc. took down its ‘for sale' sign.
Battista's statements are consistent with what he said on February 16 when reporting the company's 2016 financials. At that time, Time Inc. reported its digital advertising revenue had exceeded $500 million, a 55 percent increase year-over-year. Also, in December, Time Inc. made it to the top 10 in the U.S. multi-platform unique digital audience for the first time, according to comScore.
“We are pleased with our progress and achievements during the quarter and our execution against our plan. In 2017, we are well positioned to accelerate our growth across digital and other media. Time Inc. is a unique platform in today's dynamic media environment. We combine world-renowned content and iconic brands at massive scale with best-in-class targeting, measurement and data capabilities, giving us a tremendous value proposition for both consumers and advertisers,” said Battista in February.
Investors did not take kindly to the news. The day before the announcement, Thursday, April 27, stock closed at $18.30 per share. Stock dropped $3.10 per share to $15.20 at the close of trading on Friday, April 28. It remained flat at 5:41 PM on Monday, May 1.
Time Inc. will report its first quarter financials next week on Wednesday, May 10. The company is projecting digital ad revenue of $600 million in 2017.
Like so many publishers, Time Inc. is trying to find the right balance between print and digital, the perfect mix of revenue streams, and cost cutting in both the short and long-term. While Time Inc. has a digital audience of 133 million comScore uniques and 250 million social followers, those numbers don't necessarily translate into digital revenue.
The company does, however, have 30 million paid subscribers and solid, iconic brands on which to build, a good position if the company can retain the majority of those subscribers throughout its transformation. With a detailed strategic plan, Time Inc. needs to regain the faith of its shareholders – and quickly – to avoid losing any more of its value.