Time Inc. to Set a Lonely Course After a Spinoff
David Carr Ravi Somaiya www.nytimes.com david-carr ravi-somaiya
The magazine publisher, once a towering presence in its industry, faces a shifting market with debts to pay as it begins trading Monday as an independent company.
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Sometime late next year Time Inc., the company that all but created the modern magazine business, will leave its home of more than five decades, the Time & Life Building in Rockefeller Center, and head to new quarters in downtown Manhattan.

It is a pragmatic move aimed at reducing costs, but one filled with symbolism for a company that is starting over in fundamental ways.

On Monday, the nation’s largest magazine publisher will begin trading as an independent company — stock symbol: TIME — with an uncertain future.

What was once a jewel in terms of profit and stature is now a drag on the share price of Time Warner, its parent company, and is being spun off with little ceremony and a load of debt. Absent the diversified portfolio of Time Warner, Time Inc. will be going it alone with more than 90 magazines and 45 websites in a market that views print as a thing of the past.

The new entity will start off with $1.3 billion in debt, including $600 million that will go toward a one-time cash dividend to Time Warner shareholders. That stands in stark contrast to Rupert Murdoch’s News Corporation, which was given a $2 billion cash cushion when it was spun off into a separate company last year. At approximately three times earnings, Time Inc.’s debt is high-risk, and Moody’s has rated it at less than investment grade.

As recently as 2006, Time Inc. produced about $1 billion in earnings, a figure that is now down to $370 million. Revenue has declined in 22 of the last 24 quarters, which has tried the patience of both investors and Jeffrey L. Bewkes, Time Warner’s chief executive.

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