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Comment on Jon Fine's Media Blog. He guesses a $300 million price tag for the magazine properties of Time-Warner (NYSE:TWX). I just had to up the ante. Historically, Time Warner has had management that makes bad decisions.

I think also that if we knew the breakdown of online revenues versus print revenues, we could assign a proper multiple to each piece. I'd put a 30-40 multiple to the online business. I'm sure someone else can make more out of online than Time Inc. And a 12-15 p/e on the print businesses.

Comparable P/E's:
NY Times (NYSE:NYT) P/E = 17 (a great brand fighting internet trends that are eating into revenue)
E.W. Scripps (NYSE:SSP) P/E = 32
Gannett Co (NYSE:GCI) P/E = 11.5
Tribune (TRB) P/E = 30.

I can see how Jon Fine got to a p/e of 15 but there is so much private equity around disparate to find big deals in which to park all that cash. I'll bet the multiple is even higher. Every bidder is going to have some genius associate figure out a way to increase margins and get higher earnings numbers than the magazines currently make. I'm betting $400mm+ by the time the analysts and egos all are done.

While TWX has been on the move lately, I find it hard to get excited about this company. At a p/e of 20, it's not cheap and I just don't trust management to make good decisions. I need to see more than divesting the no grow magazine properties and a partial listing of the cable business. They aren't showing me they are making the hard decisions.

TWX 1-yr chart:

TWX 1-yr chart

Disclosure: I own none of the companies mentioned in this piece.

Source: Time Warner Management Not Making the Tough Decisions Necessary to Succeed