Paper behind Jeff Bezos scandal up for sale
Following accusations of extortion by billionaire Jeff Bezos this year and an earlier flap over killing embarrassing stories about Donald Trump, American Media said on Wednesday that it would unload the weekly imminently. A heavy debt load has put an additional burden on the company, and — despite being a staple of supermarket checkout aisles for decades — the Enquirer’s circulation is sliding.
Leon Cooperman, an investor in American Media, said he believes an unspecified buyer is interested in making the deal.
If the sale goes through, it would help ease the pressure on American Media, chief executive officer David Pecker and the company’s hedge fund backers. Chatham Asset Management is the principal owner of the publisher, and two of the firm’s executives serve on its board. Cooperman, a billionaire hedge fund manager, has said that his stake is relatively small.
Chatham, run by Anthony Melchiorre, has grown increasingly disgusted with the reporting tactics at the Enquirer and pushed for the sale, according to the Washington Post.
American Media’s board conducted a review of its tabloid business, including the Globe and National Examiner brands, and decided to explore strategic options. That will “likely result in their sale in the near future,” the company said on Wednesday.
“We feel the future opportunities with the tabloids can be best exploited by a different ownership,” Pecker, who also serves as chairman, said in a statement.
The Enquirer and its owner have come under intense scrutiny since Bezos made his allegations in a blog post in February. Bezos accused American Media of trying to blackmail him with photos of him with a woman who wasn’t his wife. He also published emails sent to his lawyer, Marty Singer, by American Media executives.
The scrutiny extended to Chatham, which was questioned by New Jersey officials over the matter. The firm also has come under review by securities regulators.
The Bezos situation followed a separate controversy over the publisher’s ties to Trump. The company admitted that it worked with the Trump campaign to withhold stories about the candidate’s relationships with women.
Pecker is considered a friend of Trump, but Melchiorre has been linked to the president as well. When Pecker arrived at the White House in July 2017 for a dinner with Trump, he was accompanied by the hedge fund boss.
Unloading the Enquirer would shift American Media’s focus toward fitness and lifestyle brands. In recent years, it acquired Us Weekly and Men’s Journal, as well as Bauer Media’s celebrity and teen brands.
Bezos, head of Amazon.com Inc., also has knocked American Media for its ties to Saudi Arabia. Around the time of Crown Prince Mohammed bin Salman’s visit to the US a year ago, American Media produced a nearly 100-page glossy magazine celebrating the country as “The New Kingdom”.
Bezos questioned whether critical coverage of Saudi Arabia by his newspaper, the Washington Post, might have spurred the publisher to retaliate against him. American Media said in February that it “does not have, nor have we ever had, any editorial or financial ties to Saudi Arabia.”
Bezos is set to meet federal prosecutors in Southern District of New York as soon as this week, CNN reported on Wednesday. They’re looking to get access to Bezos’s electronic devices, letting them examine his private investigator’s allegation that Saudi Arabia obtained private information from his phone.
Even before the turmoil, American Media was grappling with financial losses. The closely held company recorded a $31.5 million deficit in the six months that ended September 30, according to documents reviewed by Bloomberg. That marked an improvement over the previous year, but nonetheless brought its total losses over the last five and half fiscal years to $256 million.
Bezos and his wife, MacKenzie, announced earlier this month that they were completing the dissolution of their marriage. The divorce is the most expensive on record, with MacKenzie Bezos receiving a 4 per cent Amazon stake, worth roughly $36 billion.
News credit : Indiatimes