Who would want Time Warner's magazine mess?

Time Warner (TWX) CEO Jeff Bewkes says spinning off the company's Time Inc. magazine business will provide "strategic clarity" for the media giant. Basically, he gave the division the corporate equivalent of the "it's not you, it's me" speech before kicking it to the curb after nearly a century of loyal service.

Though this is the third spin-off Bewkes has done since becoming CEO in 2008, it will be far more difficult to sell to shareholders than the Time Warner Cable (TWC) and AOL (AOL) deals. Time Inc. has been a drag on New York-based Time Warner for years. The business has stuck out on the parent company's balance sheet both for its small size and declining revenue for five of the past seven years.

Last year was typical. Revenue at Time Inc. fell 6.6% to $3.4 billion in 2012, reflecting declines in advertising and subscriptions. Operating income decreased 25% to $420 million.

Bloomberg News cites an analyst note from UBS analyst John Janedis estimating the value of the Time assets at as much as $3.2 billion. However, the key question is: to whom?

Meredith (MDP), the parent of Better Homes & Gardens, was about as close as Time Warner could have found as a logical buyer for the business. Media reports indicated that the Des Moines-based company had no interest in Time's more news-oriented titles. So, Time Warner was planning to retain Time, Sports Illustrated and Fortune titles, but it soon realized that made no sense given that synergies with other businesses such as CNN were minimal. No deal with Meredith is on the table now.

Rupert Murdoch's yet-to-be named publishing business could be a buyer for titles such as People, which generates more $900 million in advertising sales, but it probably wouldn't be interested in taking on the headache of the entire Time Inc. operation. For years, the Australia-born tycoon has subsidized money-losing print businesses such as the New York Post with profitable broadcast operations such as Fox News Channel. That strategy will be tougher to pursue after the split-up of News Corp. (NWS)

Perhaps, the Time titles might attract a private equity buyer. Or in a back-to-the-future twist, how about AOL? As Jeff Bercovici at Forbes reports, CEO Tim Armstrong would, if he could. But, of course, he can't.

No matter, the outlook for this business remains cloudy at best

--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

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