Time Inc getting new CEO ahead of magazine unit spinoff
(Reuters) - Time Warner Inc said it named a new chief executive to head its magazine titles People, Sports Illustrated and Time, which will soon be separated from the media conglomerate.
It tapped Joseph Ripp, a former Time Inc and AOL executive, to become CEO effective September.
Time Warner intends to spin off the magazine unit Time Inc into an independent publicly traded company around the end of 2013.
Ripp, 62, is currently the CEO of business marketing company OneSource Information Services. He replaces Laura Lang who previously said she was leaving the company. Ripp is the third CEO of Time Inc since 2011.
"My plan is to reignite the spark of Time Inc," said Ripp in an interview with Reuters on Monday. "Millions of companies across the U.S. would die for the assets that Time Inc has."
Time Inc's separation comes as magazines have been hit with challenges as people choose to read more on smart phones and tablets. Compounding the problem is the drop in print ads across the industry as advertisers shift dollars to digital products.
The publishing unit reported a 5 percent decline in revenue to $737 million and an operating loss of $9 million in the first quarter.
Investors have been pushing Time Warner CEO Jeff Bewkes for years to spin off Time Inc, which is considered a slow growth, mature asset.
It is a trend that has caught on with several media companies including News Corp, which just spun out its publishing assets, and Tribune Co, which said it will separate its newspaper and broadcast businesses.
"I'm going to be pragmatic about the issues Time Inc faces," Ripp said citing advertising and readership declines.
"When I was at Time Inc, we invested in HBO. Being independent of Time Warner will give us an opportunity to invest and extend those brands."
Ripp began his media career with Time Inc in 1985 in the finance department and was there when the company started HBO, the pay-TV juggernaut that is one of Time Warner's crown jewels. He worked his way up to Time Warner including stints as its CFO and vice chairman of AOL, which was still part of company.
In 2008, Ripp was one of eight former Time Warner/AOL executives who was accused by the U.S. Securities and Exchange Commission of committing a fraudulent scheme that overstated company advertising revenue by more than $1 billion.
David Geneson, an attorney for Ripp, told Reuters in 2008 that Ripp investigated and uncovered the accounting fraud at the AOL division and was not involved in any fraudulent conduct. Ripp settled with the SEC for $150,000 without admitting wrong doing.
"I'm very happy that chapter is behind me," Ripp said in an email on Monday.
Several Time Inc potential candidates surfaced in media reports over the past weeks including Michael Klingensmith, the publisher of the Star Tribune in Minneapolis, and Howard Averill, Time Inc's CFO.
Klingensmith, who is a native of Minneapolis and former Time Inc executive, said it was a difficult decision to consider.
"I really love my work in Minneapolis and I'm committed to the community," he said on Monday.
Earlier on Monday, Time Warner named Averill, 49, as its chief financial officer. He replaces John Martin, who is taking over as CEO of Turner Broadcasting, the unit of Time Warner that oversees cable channels such as TNT, TBS and CNN.
(Reporting by Liana B. Baker and Jennifer Saba; Editing by Gerald E. McCormick, Andrew Hay and Carol Bishopric)