Time Warner has turned to longtime outside counsel Cravath, Swaine & Moore to advise on the spin-off of its Time Inc. publishing unit in a transaction that finds the world’s third-largest media conglomerate untethering itself from its storied magazine roots.
New York–based Time Inc. publishes more than 20 consumer magazines, including such popular titles as Time, Sports Illustrated, People, and Fortune. The latter broke the news last month that parent Time Warner was considering splitting the magazine division off in a joint venture deal with Des Moines–based publishing powerhouse Meredith Corporation.
But once the two companies failed to strike a deal—The New York Times has the details of how those negotiations ended—Time Warner opted to spin Time Inc. off as a separate publicly traded company.
Cravath corporate partner Richard Hall—who will soon relocate from New York to London to head the firm’s European M&A group—and Eric Schiele are advising Time Warner on the planned spin-off, along with tax head Stephen Gordon and tax partner Lauren Angelilli.
This is not the first Time Warner transaction in which Hall has played a role. He led a Cravath team that advised the company in 2008 on its $9.25 billion spin-off of Time Warner Cable, which is now the country’s second-largest cable company after market leader Comcast.
Cravath also took the lead helping Time Warner shed its online media arm AOL in 2009, effectively ending the ill-fated $182 billion merger between the two companies struck at the height of the technology bubble in 2000. Cravath also advised Time Warner on that deal—which valued the combined companies at $350 billion—in which it negotiated a $35 million success fee that was to be paid only if the transaction was approved, according to a report at the time by The American Lawyer. (The fee was also thought to be the largest ever paid to an Am Law 100 firm for M&A advice at the time.)
Former Cravath presiding partner Robert Joffe, who passed away at 66 in 2010 from cancer, was a key figure in the negotiations that created AOL Time Warner. Joffe also had lead roles on a series of other megadeals in previous years that helped create Time Warner, including advising predecessor company Time on its $15.2 billion merger with Warner Communications in 1989 and Time Warner on its $7.5 billion acquisition of Turner Broadcasting System in 1996.
But Cravath’s longtime relationship with Time goes beyond Joffe. Late name partner Maurice "Tex" Moore—the third partner in the door at Cravath—took on the nascent Time as a client back in the 1920s as a favor to his brother-in-law, company founder and future magazine magnate Henry Luce. Before his death in 1967, Luce would see Time grow into a major media empire.
Former Kirkland & Ellis litigation partner Paul Cappuccio, known to friends as "Pooch," has served as Time Warner’s chief legal officer and general counsel since the completion of the merger with AOL in 2001. Cappuccio, as recounted in this story by sibling publication Corporate Counsel, beat out Time Warner legal chief and former Cravath associate Christopher Bogart for the role. (Bogart went on to become CEO of Time Warner Cable before starting third-party litigation funder Burford Capital—where he currently serves as CEO—in 2009.)
Several prominent attorneys serve as independent members of Time Warner’s board of directors, including Robert Clark, a former dean and current distinguished professor at Harvard Law School; former U.S. attorney general and ex–Kirkland & Ellis of counsel William Barr; and former Mintz, Levin, Cohn, Ferris, Glovsky and Popeo partner-turned-senior counsel Kenneth Novack, who served as managing partner of the firm during the 1970s before going on to serve as vice-chairman of AOL Time Warner.
Time Inc.’s general counsel is Maurice Edelson, whose alleged standoff with former company CEO Jack Griffin reportedly led to the latter being ousted from the company two years ago. ( Griffin disputes that account.) Lauren Klein—the wife of Simpson Thacher & Bartlett executive committee member Alan Klein—serves as Time Inc.’s deputy general counsel.
Simpson Thacher alum Gary Ginsberg, a former in-house magazine lawyer and executive at News Corporation, was hired by parent company Time Warner three years ago to serve as its executive vice president of corporate marketing and communications. (As it happens, Simpson also advised AOL on its merger with Time Warner a decade ago.)
As for Meredith, it’s unclear which firm, if any, the company turned to for outside counsel on its talks with Time Warner. John Zieser, Meredith’s general counsel and corporate secretary, did not respond to a request for comment on the matter.