Time Warner sells Time Life arm
Reuters 01.05.04

ZelnickMedia will buy the unit, famous for song, show compilations, for an undisclosed price.

NEW YORK (Reuters) - A partnership run by Strauss Zelnick, the former chief executive of BMG Entertainment, is buying Time Life Inc., the music and video direct marketing arm of Time Warner Inc., the companies said Monday.

Financial terms were not disclosed, but the deal provides for Zelnick to acquire immediately a long-term license to use the Time Life brand around the world to sell products such as "Best of Saturday Night Live" videos and "Sounds of the '80s" song compilations.

Time Warner will be paid some cash and will receive ongoing royalties from Time Life, which had revenues of about $350 million in 2003, according to Jim Friedlich, a ZelnickMedia partner.

Zelnick, with the backing of private equity firm Ripplewood Holdings, will combine Time Life with Lillian Vernon, the specialty catalog retailer he acquired last year.

Zelnick's partnership, ZelnickMedia, owns Direct Holdings Worldwide, which is the acquiring entity of Time Life. The Time Life unit was founded in 1961 as a book division, but now is recognized for selling music compilations via television commercials.

"Time has pulled back from the book business in the past few years in the United States, but our intention is to re-enter the book business," said Jim Friedlich, a ZelnickMedia partner.

Time Warner (TWX: Research, Estimates), the world's largest media firm and parent company of CNN/Money, has been selling assets to pare debt and to concentrate on fewer businesses.

"Given our desire to concentrate on high-growth opportunities in Time Inc.'s core magazine business and brands, selling the Time Life direct marketing division to the right buyer made strategic sense," said Ann Moore, Time Inc.'s chairman and CEO.