(Adds comments from CEO interview, updates share price)
By Liana B. Baker
June 9 Shares of Time Inc ebbed on
Monday in the magazine publisher's first trading session since
its spinoff from Time Warner Inc, even as CEO Joe Ripp
vowed to expand a business he said had been starved of capital
Time Inc, whose titles include People, Sports Illustrated
and its namesake Time magazine, will now operate without the
cushion provided by such lucrative Time Warner Inc cousins as
the HBO family of pay-TV channels or the Warner Bros movie
The spinoff, which follows a strategy pursued by News Corp
and other media companies, is a response to a steady
decline in magazine circulation and advertising revenue as
consumers shift to reading news and entertainment content on
smartphones and tablets.
Ripp said in an interview on Monday that Time Inc, no longer
beholden to its parent for capital, could now plow more cash
back into its business and take the company beyond its core
print products. He sees acquisitions in newsletters and the
digital sector as a possibility.
"I think you're going to be seeing lots of acquisitions
from us. Some smaller and some a little bit bigger, but I'm not
looking at anything for a $1 billion right now," Ripp said.
There's nothing like that in my sights."
Shares closed 18 cents lower, or 0.8 percent, at $23.30,
after trimming a decline of as much as 6 percent.
As part of the spinoff, Time Warner shareholders received
one share of Time Inc stock for every eight shares of Time
Warner stock. Based on 110 million shares outstanding, Time Inc
had a market value of roughly $2.6 billion.
Time Inc publishes more than 90 titles, including the
business magazine Fortune, and operates 45 websites.
The magazine unit has slashed its workforce in recent years,
a trend that is expected to continue under Ripp. The company,
which cut 600 jobs in 2013, now has about 7,800 employees.
Ken Doctor, a research analyst at Outsell Inc, said Time
Inc won't have an easy time as it plays catch-up with
faster-growing Internet-based media companies.
"You can manage declines but at some point you've got to
have a way to turn around that story," Doctor said.
Ripp acknowledged the difficulties facing his company but
said it could follow some of the strategies that are working for
He said the company could find new revenue streams by
offering products that are not necessarily print-based but are
related to specialty areas it serves. For example, the company,
which has two magazine titles dealing with wine, could acquire
wine-oriented newsletters, sponsor vineyard tours and other
events, produce videos, create apps and cull related data.
Between 2011 and 2013, Time Inc's revenue fell 9 percent to
$3.35 billion, while operating profit dropped 40 percent.
The company has also taken on $1.4 billion in debt, partly
to help fund a one-time dividend to Time Warner shareholders.
Several media companies, including News Corp, the
publisher of the Wall Street Journal and owner of Fox News, have
recently separated their print properties from faster-growing TV
and cable businesses.
Tribune Co also plans to cleave off its newspaper
properties from its TV stations this year.
(Additional reporting by Soham Chatterjee in Bangalore and
Jennifer Saba in New York; Editing by Nick Zieminski, Ted Kerr
and Jonathan Oatis)