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By
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Lukas I. AlpertThe Wall Street Journal
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- @lalpert1
- [email protected]
America Media Inc., publisher of the National Enquirer, has further cemented its dominance of the celebrity magazine market by acquiring gossip titles In Touch, Life & Style and Closer from rival Bauer Media USA.
With the deal, AMI will own virtually all the tabloid weeklies sold on supermarket magazine racks excluding Meredith Corp.’s People magazine, which has the largest circulation of those publications.
In addition to the Enquirer, AMI already owns Ok!, Star and the gossip site Radar Online. It acquired Us Weekly from Wenner Media for $100 million last year.
As part of the deal with Bauer, AMI also acquired several teen-oriented magazines including J-14, Teen Boss and Girls’ World. The price for the deal, which is expected to close on July 1, wasn’t disclosed.
“Despite newsstand sales declining 20% annually, both Bauer and AMI have continued to invest in the marketplace and we believe there is still a terrific opportunity to grow newsstand revenue,” AMI Chairman and Chief Executive David Pecker said in a statement.
Mr. Pecker, a longtime friend of President Donald Trump, has thrown the weight of his media enterprise behind the president, both in the run-up to the 2016 election and during his administration. In addition to publishing glowing coverage, the Enquirer paid to acquire stories potentially damaging to Mr. Trump, which it never ran, a tabloid practice known as “catch and kill.”
The Wall Street Journal first reported in 2016, for example, that AMI had paid former Playboy model Karen McDougal $150,000 for her story alleging an affair with Mr. Trump in 2006 but never published it. Through such arrangements, AMI has become ensnared in an investigation by federal prosecutors into Mr. Trump’s personal lawyer, Michael Cohen, over alleged hush money payments.
Despite falling revenue, ballooning debt and shrinking newsstand sales across its titles, AMI has been on an acquisition spree. Last year, it acquired Us Weekly and Men’s Journal and explored buying Time Inc. or some of its properties. Time Inc. was eventually sold to Meredith Corp. Earlier this year, AMI offered $325 million for TIME magazine, Sports Illustrated, Fortune and Money, but Meredith rejected the bid, the Journal reported.
As of the end of 2017, AMI had $920 million in outstanding debt, according to financial documents reviewed by the Journal. The company has undergone a variety of restructurings in recent years. To finance the Bauer deal, AMI says it has secured a bridge loan from its existing investors and intends to refinance its existing debt once the deal closes.
Write to Lukas I. Alpert at [email protected]
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