AMI Gets Rid of Tabloid National Enquirer but CEO David Pecker Stays On
Scandal-hit scandal sheet the National Enquirer has been sold for $100 million to James Cohen, CEO of Hudson News.
The sale of the National Enquirer, which has long been partial to president Donald Trump and suppressed stories critical of him, was announced by the parent firm, American Media Inc. (AMI). Sold to Cohen along with the National Enquirer were two other AMI supermarket tabloids, Globe and National Examiner. Cohen's company, Hudson News, operates a network of airport newsstands throughout the country.
Apart from getting rid of an embarrassing tabloid, the sale of the National Enquirer and AMI's newsprint tabloid business is also expected to reduce AMI's debt to $355 million, according to a knowledgeable source quoted by media. AMI has been trying to refinance more than $400 million in debt this year, said The Washington Post.
It found this task complicated by the continuing drop in the National Enquirer's circulation. The paper sold an average of 516,000 copies per issue in 2014, but that number fell almost 60 percent to 218,000 in December 2018, according to audited data.
The decision to sell the National Enquirer was also taken by AMI after Anthony Melchiorre, the hedge fund manager whose firm controls AMI, became disappointed with the pro-Trump bias shown by the National Enquirer, which is run by AMI CEO and President David Pecker, Trump's friend and long-time confidant.
AMI has been under intense pressure to get rid of the National Enquirer because of the Enquirer's efforts to sway the 2016 presidential election in favor of Trump.
Pecker and the National Enquirer are also embroiled in an attempt to extort Amazon founder and CEO Jeff Bezos, who also owns The Washington Post. Pecker threatened to publish "dick pics" and texts exchanged between Bezos and his mistress, Lauren Sanchez unless Bezos gave in to their demands.
Instead, Bezos published the National Enquirer's threats and sued.
This lawsuit added to the significant legal risk faced by AMI. This risk had grown because of the efforts of Pecker and his chief content officer, Dylan Howard, to keep using their catch-and-kill efforts favoring Trump during the 2016 presidential campaign.
Pecker and Howard later entered into non-prosecution agreements with federal investigators to avoid indictments for their role in buying and then burying the story of a Karen McDougal, a former Playboy model who had an affair with Trump.
AMI's board of directors later began looking for ways to unload AMI's tabloid business "because they didn't want to deal with hassles like this anymore," said a person familiar with the matter.