Time, and Time Inc., Marches On

As a child of war, a veteran, and a long-time foe of American military adventurism, I take special, private note when war anniversaries come around.  This year, I thought a lot about Pearl Harbor, perhaps because I am increasingly hammered on social media with commands that tie my support of veterans to the Like button.

I have been to and sailed past the Arizona Memorial many times, and I swear that there is no quieter or more prayerful place on earth as when a Navy ship passes and honors the men entombed in the Arizona’s hull.  I have rarely experienced such godly silence, except perhaps in the catacombs in Rome.

On Veterans Day, I will buy a poppy from the VFW guy outside of ShopRite and probably will keep it forever.  This is the shorthand shared by those who have served.  I recall meeting an in-law years ago and he asked me, what war?  I replied Vietnam.  When I asked him, what war?, he simply said: The Big One.

I’m currently reading The Guns of Last Light, the award-winning account by Rick Atkinson about the war in Western Europe, 1944-45.  We are coming up on the sixty-ninth anniversary of the Battle of the Bulge, an event well documented in books and film.  Social media, not so much.  According to one account I read, most Americans consider the Battle of the Bulge a war with their girth and weight, suggesting the Atkinson book, even with its weight and textual girth, might be a useful stocking stuffer. To be on the safe side, we might also include Heller’s Catch-22, Mailer’s Naked and the Dead, and Vonnegut’s Slaughterhouse-Five so we are reminded of the horrors, miscalculations, and utter randomness of war.

At this time sixty-nine years ago, all seemed quiet on the Western front.  Few in the Allied High Command thought that the Germans would make a major push west into Belgium and Luxembourg. Small tokens of Christmas were springing up.  In the last week of December, Time magazine chose Dwight Eisenhower, Supreme commander, as its “Man of the Year.”   The cover photos showed the commander with legions of soldiers stretching into the distance.  The facts on the ground were much more confused and bloody.

As I’m writing this, Time magazine announced Pope Francis as its 2013 Person of the Year on the Today Show with Edward Snowden the runner-up.  Pope Francis received the award due to his efforts to change the tone of the conversation inside and outside the Catholic Church, nudging the Vatican away from its role as a theological police force.   I have written a number of pieces about some of the theological, cultural, and psychological issues concerning Pope Francis.  They are posted at www.medium.com.

Thank goodness for the sobriety of the Time magazine editors, who paid little or no attention to the Reader Poll that put Miley Cyrus in the running.  Next year they might want to consider a venue other than the Today Show, where there seemed more interest in the Digital Dance Off Awards, including the Harlem Shake that the Today staff has immortalized.

Or perhaps not.   It seems inevitable that social media will eventually play a much more vital role in the Person of the Year choices, likely hurried by the spin-off of Time Inc. from the parent in early 2014.  Just how much the world could change for the ninety-year-old Time Magazine can be found in a recent article by Allan Sloan, an editor-at-large at Fortune.cnn.com, a Time Inc. property.   Sloan looked closely at the Securities and Exchange Commission filing for Time Inc., his employer, before it is spun out of its parent company, Time Warner.  I followed his advice and conducted a deep dive into this weighty document.

 Documents for SEC are written in a kind of code by a cadre of lawyers who take all the fun out of a spin-off by rattling off an endless list of risks that might scare away even the boldest investor.  So, if I was looking for poetry, this was not the place to come.  But nonetheless, there is drama here.  Sloan, who is writing about his boss, reports that “three top Time Inc. executives (all of whom are now former Time Inc. executives) had made deals to get seven-digit bonuses if the spinoff took place.  Other Time Inc. executives may have similar deals.”

On its face, the document raises questions about the propriety of those negotiating a deal having a financial stake in the outcome.  Sloan calls this a “conflict” and he’s absolutely right.

Sloan also points out that Joe Ripp, “who is leading a company that says in the filing that ‘We are committed to pursuing operational efficiencies and cost leadership,’ got $7.5 million of stock and options (vested at $1.5 million a year for five years) as a ‘make whole’ deal for what he left behind at his previous employer.”  Time Inc. employees will not be pleased that Ripp just announced Time Inc.’s 401K company match is being reduced from 7% to 5% in 2014.  

Time Inc. has taken its share of whacks over the last decade or so for bad management and an anemic digital strategy.   Maybe so, but it’s been something of a cash cow for Time Warner.   Sloan’s brilliant analysis of the SEC documents shows “that for the past three years, virtually all the division’s operating cash—a $1.42 billion out of $1.456 billion—has gone to Time Warner.  That’s 97.5%.  I seriously doubt that the services Time Inc. has gotten from Time Warner for things like human resources begin to balance the scales.”

The industry chatter about the spinoff has largely been about how much debt Time Warner will saddle the new entity with.  That is not clear from the document.  Sloan wasn’t able to find out, but notes it could be as much as $500 million in deferred subscription liabilities alone (magazines people have paid for but not received).  As the writer notes, it is this kind of liability that can sink a business.  Other estimates put the number closer to $1 billion.

  Capital New York, quoting Time Inc. chief content officer Norm Pearlstine, reports that the company will continue staff cuts into next year.  The language of the SEC documents suggests that the next round of cuts could be greater than the 500 positions eliminated in early 2013.

The touching essay Managing Editor Nancy Gibbs wrote about Pope Francis should be required reading. In its breadth, analysis and humanity, it is in the best tradition of Time Magazine, an institution that is ninety years old this year.  

Those who want the inside story of what the new Time Inc. might look like, please see Allan Sloan’s piece (www.finance.fortune.cnn.com/2013/12/05/revelations-time-inc-spinoff/). The SEC filing can be found at www.sec.gov/archives.

Time is indeed marching on.