Time Inc.'s New York headquarters.

Employees at Time Inc. are buzzing about the future of the company ahead of operations meetings with president and chief executive officer Rich Battista this week.

The routine quarterly meetings give Battista a chance to check in with the teams from each title to get an update on the state of their business. But the general feeling inside Time Inc. is one of uncertainty in light of ongoing reports that the company is up for sale. Since early March, interested parties have included a group led by Jahm Najafi, ceo of the Phoenix-based investment firm Najafi Cos.; private-equity firm Pamplona Capital Management, and media company Meredith Corp.

Time Inc. declined to comment on the sale speculation.

People familiar with the process said Time Inc.’s board may in the end decide not to accept any offers, adding that the bidding process will likely come to a close in the coming weeks, regardless of the result.

Although the process has been described as “fluid,” industry experts point to Meredith as the leading — and only viable — candidate to acquire the publisher of titles including Fortune, People, Sports Illustrated, InStyle and Time. An insider called bidders, Najafi Cos. and Pamplona “window dressing” to make sure Meredith closes the deal. WWD reached out to Najafi and Pamplona, but both firms declined to comment on their interest.

“The only logical acquirer is Meredith,” said Standard & Poor’s Global Ratings credit analyst Minesh Patel. “A whole acquisition would be difficult to digest.…It’s tough to buy a company in the middle of a turnaround.”

Time Inc., which netted $3.08 billion in revenue in 2016 and swung to a $48 million net loss, carries $1.24 billion in long-term debt. Its operating income before depreciation and amortization for the year totaled $414 million. Since buzz of a sale, the company’s shares have been trading at what Patel characterized as “high,” or above $19 a share. Its market cap is around $1.92 billion, and earlier this year, the company rejected a takeover bid from Edgar Bronfman Jr. and Ynon Kreiz that valued the company in the $18 to $20 a share range, or around $1.8 billion.

Some predict that Time Inc. would accept a bid of above $19.50 a share, while others put it closer to $21 a share.

“Meredith is the only serious bidder so they can take as much time as they want,” a source said, referring to the close of a deal.

Sources said that a price of more than $20 would imply the buyer would make serious cost savings and headcount reductions. Should Meredith buy Time Inc., one insider suggested the Des Moines-based company could cut 15 percent of costs and consolidate the operations as the firm moves operations to its headquarters in Iowa, which is much cheaper than New York.

Meredith, which brought in $33.4 million in profit last year, or an operating profit excluding special items of $261.3 million, on revenues of $1.65 billion, has a more diversified portfolio of media properties that includes 17 TV stations and print magazines like Better Homes & Gardens, Shape and Parents.

Should a deal take place, one source speculated that Meredith would sell its TV business or spin it off. As a result, the company would move its print operations to Des Moines, the source echoed. Another mused that Meredith would unload some of the Time Inc. titles that don’t fit into its female-centric mass consumer audience.

Those titles may include Time, Sports Illustrated and Fortune. Industry executives have buzzed that Hearst Magazines has expressed interest in nabbing InStyle in order to consolidate the fashion advertising market, while Fox Sports could acquire Sports Illustrated in order to amp up its rivalry with ESPN.

Aside from that handful of properties, there are still many Time Inc. titles that fit into Meredith’s portfolio, such as Real Simple, Cooking Light, Southern Living, Food + Wine, Health, Sunset and others that could be folded into the company and give it scale.

Time Inc. possesses growing properties such as data company Viant and in-house native advertising unit The Foundry. On a recent earnings call, Time Inc. said its digital advertising business, which includes Viant, is going to produce more than $600 million in revenue in 2017. Battista added he sees a path to $1 billion in digital advertising revenue in the near future, but didn’t specify a year.

But the larger issue for Time Inc. and publishers with print media roots is the quick migration of advertising from print to digital, which is moving in lock step with reader habits.

Although print advertising is extremely lucrative, it is deteriorating fast. Moody’s Investor Service expects print advertising revenue to decline by between 10 and 15 percent through mid-2018. Time Inc. is the prototypical case in some ways. The publishing giant pulled $1.71 billion in ad revenue last year, 70.1 percent, or $1.2 billion, of which came from print ads. But that sizable $1.2 billion chunk represents a 9.4 percent decline in print ad revenue over 2015.

At the same time, revenue from circulation is declining across the industry and legacy publishers are working to cut costs, while investing in digital.

“We expect U.S. newspaper and magazine publishers will not generate enough revenue from digital subscriber fees, nonprint advertising, or marketing services to offset the stress on their print volumes and pricing through mid-2018,” said Moody’s vice president and senior analyst Alina Khavulya. “Companies will make some gains against this decline from ongoing investments in digital platforms, but not enough to prevent most companies’ performance from eroding, since publishers rely on print advertising for the majority of their revenue.”

One way to stem the steep slide is through industry consolidation such as Meredith buying Time Inc., or the more recent deal of AMI buying US Weekly for an estimated $100 million. The notion of consolidation has been echoed by media executives and investors alike, who believe that, for the right price, everything is up for sale in this volatile climate.

Still, a larger issue for publishers, both digital and print, is the migration of advertising dollars to Facebook, Google, programmatic advertising and other platforms.

“Start-ups easily launch web-based platforms with cheap digital content distribution. Also, audiences keep shifting to digital news sources, away from print for niche content, aggregated news, popular lists on a given subject and viral updates,” Khavulya said. “Digital ad costs and print revenues will keep falling as options for digital advertising swell, while programmatic buying through ad exchanges increases and web sites face ever-increasing pressure to offer free or low-rate content.”

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