NEW YORK POST, June 15, 2018 by Keith J. Kelly
With a deal estimated at $80 million, embattled American Media Inc. Chief Executive David Pecker has managed to turn the world of glossy celebrity magazines on its head.
By buying In Touch, Life & Style, Closer and nine teen titles from Bauer Publications on Friday, Pecker has tightened his grip on the celebrity magazine category.
AMI already owned Us Weekly, purchased a year ago for $100 million, adding to a stable of magazines that includes the National Enquirer, Star Magazine and Ok!, as well as several smaller supermarket tabs.
AMI will now sell more than 1 million celebrity magazines a week on newsstands, the company said.
“Despite newsstand sales declining 20 percent annually, both Bauer and AMI have continued to invest in the marketplace and we believe there is still terrific opportunity to grow newsstand revenue,” Pecker said in a statement.
The sale is a sign of continuing consolidation in the magazine world. In the past year, Meredith bought Time Inc. for $2.8 billion, Hearst picked up Rodale for over $210 million and Wenner Media slimmed down, with Rolling Stone going to Penske Media and Us Weekly and Men’s Journal to AMI.
With Bauer’s titles, AMI now owns every large-scale celebrity magazine except Meredith’s People, the No. 1 title in the market. Meredith obtained the title when it bought Time Inc. in January.
“AMI’s new-found scale in the celebrity category will pressure-test Meredith’s ability to sustain People’s leadership position in the unfamiliar world of celebrity weeklies,” said Peter Kreisky, a media industry consultant.
Meredith says it is not concerned.
“People magazine is by far and away the leader in the celebrity category by every measure,” said a spokesman. “In fact, the recent Royal Wedding issue of People sold more copies on newsstand than all of the other celebrity titles combined.”
The sale, which includes J-14 and Girls’ World and is expected to close by July 1, was a stunning turn for Bauer, which is owned by a German media giant that had never sold anything since its arrival in the US in the late 1980s.
The deal cuts down Bauer to a three-title company in the US: Woman’s World, First for Women and Soap Opera Digest.
While the sale price of the Bauer titles was not disclosed, sources pegged it at roughly $80 million. Any such sale with a price tag of $84.4 million or higher would require a lengthy regulatory review under the Hart-Scott-Rodino antitrust laws.
“[That] was not an issue,” said an AMI spokesman.
To do the deal, AMI got bridge financing from its two main stockholders — Chatham Asset Management, and Leon Cooperman, head of Omega Advisors. It is expected to announce a refinancing of its existing debt after the deal closes.
Pecker, a longtime friend and booster of President Trump, has been the subject of some controversy recently for his company’s practice of so-called “catch and kill” stories in the National Enquirer. The company is said to have paid $150,000 to Karen McDougal for her story about her affair years ago with Trump. The story never ran.