Posted by: Jon Fine on February 17, 2006
Also, everyone knows the colossus is flawed, and that it’s built upon a series of fabulously mistaken assumptions. But there’s a force-field around it that prevents anything from happening.
Please forgive me for writing about Time Warner. And please forgive me for writing about it from such a crabbed New York-centric percspective.
But I can’t help it. If this desk was on the other side of the floor, I could see one of its buildings. And even if I couldn’t, Time Warner’s shadow looms large here in the media gulches of Midtown Manhattan. And so while it was practically impossible to find anyone, on the deal side or media side, that thought Carl Icahn even had a shot at taking over the company, I found myself checking and rechecking around corners. Was the mere fact and presence of Time Warner a sort of reality-distortion field? Was there something about being inside this company’s orbit that’s making us miss something?
I wasn’t the only one. “Mathematically, he can’t win a proxy fight. It raises the question why is he doing this?” a deal-side macher said to me late last week. “Part of me is thinking, ‘what am I missing?’ … This is different from his other situations.”
In New York, and especially if you work in or around print media, you are assuredly within Time Warner’s orbit. The entire dream of working in media was more or less invented at Time Inc.— the heady notion that you could do good work and do well financially, that, as another executive put it, “you could be the third copy editor at Time and retire with a million-dollar pension.” (An antiquating notion, these days, but one that’s hard to let go of.)
Everyone who works in this business has at one time or another tried on the company to see how it would fit; everyone looks toward it portentously. (Time Inc. is a somewhat bullying institution, but nowhere near as much as the other beau ideal of highbrow New York Media, the Times.) Time Inc.’s DNA is old-school and organized, still, around mass-market niches with titles so basic they seem self-parodic if you say them, slowly, to yourself: Time. Life. Money. Fortune. People.
Of course, it’s been over sixteen years and three mergers since Time Inc. was a standalone company. It’s now but the fifth-largest—that is, the smallest—segment of an unmanageably large conglomerate. And yet its grip persists. When the AOL merger rapidly began playing out as tragedy and farce, it was not unusual to run into media executives that didn’t even work for Time Warner that nonetheless had a very personal sense of betrayal: This is what they, the outsiders, are doing to us, the hometown favorites. (Time Warner is the Yankees—not the world champions but Horace Clarke Yankees, the team stuck in the doldrums for years.) This turned into a tangible undercurrent of relief, in stories and conversations, when the AOLers left the catastrophe to be handled by the Time Warner guys again.
It turns out that these guys, in basic blocking-and-tackling terms, did a good job getting Time Warner off the critical list. It turns out, also, that nothing anyone does can get the stock out of this quicksand circa right now. Not Parsons and his team; not Icahn when he drops a doorstop outlining a break-up plan; not Icahn wrings some concessions from Parsons and significantly scales back his ambitions. (The stock, as of noon today, slipped slightly to $17.75. If you buy the counter-spin that Icahn only sought to budge the stock price a little, well, he hasn’t succeeded doing that either.)
No spectacle around it seems to make a difference. Any show requires timing, and this was perhaps Icahn’s biggest miscalculation.
What if he’d come forward in 2002?