Magazines. American Media Inc (AMI), of New York, will offload its tabloid weeklies including the racy The National Enquirer after becoming involved in politically-charged legal investigations. The key shareholder in American Media, the hedge fund Chatham Asset Management, is said to be pushing for the sale of The National Enquirer (US and UK editions), The Globe, The Star, and the National Examiner. Particular unease lies around its reported pre- and post- election collaboration with President Trump.
The New York Times says: “The bond between the candidate and the tabloid… led American Media, in the campaign’s final months, to buy and bury the story of the alleged affair between Mr Trump and Ms McDougal (aka Stormy Daniels). To pull it off, American Media acquired the rights in exchange for $150k and a commitment to promote Ms McDougal’s career as a fitness specialist. More recently, the Enquirer (which once published pictures of Elvis Presley in his coffin) promoted lurid stories about Amazon’s Jeff Bezos, who accuses the title of blackmail.
Chatham fund managers have been alarmed by the proprietorial behaviour of chairman and CEO (and small shareholder) David Pecker at a time when it is struggling financially with $400m of borrowings. He now says that AMI is shifting its emphasis away from tabloids to glossies such as Us Weekly and Men’s Journal, its fitness magazines, and the adventure sports brands acquired from The Enthusiast Network in February. But, after months of wallowing in the pain and power of his tabloids, Pecker is a very recent convert to the superior values of his specialist portfolio. It may, therefore, not be too much of a surprise that he is now believed to be negotiating a non-standard divestment of his beloved tabloids: a sale which sounds more like a licensing deal and will involve service payments to AMI over the long-term.
While Pecker is the boss, perhaps nothing will ever be quite straightforward. So you can guess what might just come next for the man who has been at the helm of AMI for 20 years through boom, bankruptcy and bargain-basement deals. The US President would miss his favourite media boss.
