Time Warner is in talks to sell several magazines from its Time Inc. division to Meredith, a media company that specializes in home and women's publications, according to a person familiar with the discussions.
Most of Time Warner's titles, including People, InStyle, and Real Simple, are up for sale, says the source, who declined to be named because he wasn't authorized to speak publicly about the deal. In one scenario being discussed, the titles for sale may be combined in a newly formed company that could be sold to Meredith.
Time Warner plans to keep at least three titles -- Time, Sports Illustrated and Fortune. Financial terms haven't been disclosed.
Time Warner declined to comment. Fortune magazine first reported the company's plans.
Time Warner, whose business also includes cable TV networks, film studios and CNN, is looking to lessen its exposure to the declining magazine business, and may unload more titles in the future, says Reed Phillips, co-founder of DeSilva + Phillips, an investment bank specializing in the media industry. "If Time Warner is selling such a large portion of its (magazine business), there's even less of a reason to be in the business going forward," he says.
Revenue for Time Warner's publishing business, Time Inc., fell 7% to $3.4 billion last year because of a decline in advertising, newsstand sales and subscriptions.
In an earnings conference call last week, John Martin, Time Warner's chief financial officer, referred to "very challenging industry conditions" that have weighed on Time Inc.'s financial performance and forced the company to begin cutting 6% of its workforce.
In a note of optimism, he said the 4% drop in ad revenue for the fourth quarter marked the smallest decline for the year.
Des Moines-based Meredith publishes Better Homes and Gardens, Family Circle, Ladies' Home Journal, Every Day with Rachael Ray and FamilyFun.
A deal with Time Inc., if completed, is an opportunity for Meredith to pick up well-branded national titles that demographically match its other publications. "My guess is Meredith didn't see much value" in Time, Sports Illustrated and Fortune, Phillips says.
People magazine, in particular, still gets about $100 per subscriber per year, the source says. For the second half of 2012, People's paid and verified circulation rose 1.9% to 3.64 million, according to the Alliance for Audited Media.
"The ones that are being bought are some of the premier magazine titles in the world. If you're going to buy, these are the some of the best brands to buy," Phillips says.
Time Warner isn't the only media conglomerate looking to trim its exposure to print products. News Corp. has announced plans to split its publishing business from its TV and film divisions this year.
Roger Yu, USA TODAY