Bain is not looking for cost cuts or considering potential asset
sales, Time Inc. executives said. But the need to fund some of the
new priorities might indirectly spark asset sales down the road,
several employees suggested. The overall effort will ultimately
help the company expand, but could "make us a smaller company"
first, one publisher said.
A Time Inc. spokeswoman declined to comment on the process. A
Bain spokeswoman did not respond to inquiries.
Ms. Lang announced
the review in March, three months after
she arrived from the digital agency Digitas, saying
Bain's study of the company and the media landscape would help peg
the areas where it can "double down, place big bets and get back on
a revenue growth trajectory."
That would certainly make the parent company happy. "The whole
goal is returning to topline growth," one Time Inc. executive said.
"If you ask Time Warner
what they care about, it's revenue." Time Inc. -- the publisher of
major magazines including Time , People, Fortune and Sports
Illustrated -- saw revenue decline 3% in the first quarter from the
quarter a year earlier, hold essentially flat in 2011, slip 2% in
2010 and fall 19% in 2009.
Some staffers said they will be excited just to have a direction
-- any direction. Ann Moore, Time Inc.'s CEO from 2002 to 2010, was
best known to the rank and file for focusing on the bottom line,
reducing costs and eliminating thousands of jobs through cuts and magazine
sales. Her successor Jack Griffin only lasted five months before
company veterans convinced Time Warner CEO Jeff Bewkes to oust him,
creating a long vacancy at the top of Time Inc.
Now Bain, which consulted for Meredith Corp. during the
recession but had no prior history with Time Inc., is working with
company executives to map potential courses of action in various
areas, providing alternatives for Ms. Lang and her team to choose
Although Bain is completing its work, however, staffers probably
shouldn't expect to hear its conclusions in a big announcement
soon. Ms. Lang is likely to wait for the next quarterly management
meeting to start spelling out where Time Inc. will and won't focus.
Some aims may not become clear until the company closes deals or
takes other concrete steps.
Those steps are likely to include an effort to produce more
online video, where ad rates are high but attracting large
audiences is difficult. "It would be transformative if we knew how
to do video that was attractive, didn't cost $1,000 per video and
you could scale," another Time Inc. executive said.
Some also believe that any bid for bigger digital audiences will
require investments or acquisitions, perhaps in the mobile arena.
"The only way to get great digital scale is to buy something, but
it's hard," the publisher said. "Mobile is still so new, there are
opportunities to do deals."
"They need to put a huge stake in the ground and go buy
something that gives them immediate platform and scale that 's not
in the magazine business," the publisher added.
If Time Inc. needs to come up with funds for significant deals
on its own, selling some smaller magazines could become very
tempting, according to employees.
"There's a growing sense," another Time Inc. staffer said, "of
'What is Laura going to do?'"