Supermarket tabloid king and longtime Donald Trump acolyte David Pecker, the chief executive of financially troubled American Media Inc., is cutting the payroll of the National Enquirer and at least nine other AMI publications by 23 percent starting April 1, Pecker announced in a staff memo Saturday.
The company-wide move, which comes as AMI is ending its fiscal year, could well be a harbinger of worse things to come, including mass layoffs and the shutdown of several AMI titles, according to people who are familiar with AMI’s financial condition.
Despite warning signs in recent months that the company has been struggling to stay afloat, Pecker attributed the draconian pay cut to the economic impact of the novel coronavirus pandemic.
“I am afraid the stark realities created by this global pandemic are taking a significant toll on our businesses,” Pecker wrote.
Former National Enquirer editor Steve Coz, was among those Saturday who said Pecker’s announcement potentially signaled the death knell of a storied publication that once dominated the tabloid business with a newsstand circulation north of 4 million, boasted journalistic scoops that led the mainstream media in politics, crime and other subjects, and wielded an incalculable impact on the popular culture.
“It’s on a ventilator,” Coz told The Daily Beast on Saturday. “I pray that all the current staff are safe, and my heart goes out to all the former staff that built such a tremendous empire.”
The company, which is majority-owned by the Chatham Asset Management hedge fund, was already in dire straits. The Enquirer’s newsstand circulation has plunged to new lows (under 100,000), recent staff layoffs have left several publications to operate with skeleton crews, a federal investigation was launched into AMI’s potential criminal liability in campaign finance violations to help Trump (prompting Pecker and his deputy Dylan Howard to take immunity deals in exchange for cooperation with federal prosecutors), and a reported $100 million sale of the Enquirer to the Hudson News’ CEO Jimmy Cohen has still not closed nearly a year after it was announced.
“I wanted to throw up when I got that email,” an AMI staffer told The Daily Beast on Saturday. “I have no idea how I’m going to pay my rent now. I’d like to ask Pecker, what about the $100 million sale?”
Despite speculation to the contrary, AMI has insisted that the sale is still going through. Other AMI titles include Radar Online, Star, OK!, In Touch, Closer, Life & Style, Examiner, Globe, US Weekly!. Earlier this month, the company laid off much of its digital staff that worked on Radar Online, requiring the publication to post old content with new dates and prompting insiders to joke that it should now be called “Zombie Radar Online.”
In his memo announcing the pay cuts, Pecker claimed that he, too, had been sacrificing financially in recent weeks.
“This is not a decision we have come to easily, however this allows us to avoid layoffs during this time and ensure that all maintain their position and benefits throughout this crisis,” he wrote. “I have made significant decreases to my compensation since January when the first signs of the crisis began, and we have made many other concessions since then.”
He added: “Beginning April 1, we will need to reduce the compensation of all staff by 23%, however, such reduction will not cause an employee’s compensation to fall below the applicable minimum wage for the city/state in which the employee resides.”
Pecker cited as reasons for the pay cuts “the closure and decreased hours of retail outlets and the sharp decrease of air travel resulting in significant declines in newsstand sales”; “advertisers throughout the industry have greatly cut their spending during this time resulting in a sizable decrease in advertising revenues”; and “due to the restrictions placed on gatherings and events by governments, we have had to postpone ASN and Dew Tour events resulting in more lost revenue.”
On March 20, the Adventure Sports Network and Mountain Dew—partners with AMI—announced that they were postponing their “annual summer Dew Tour skateboard competition and festival” because of the coronavirus pandemic.
“As a result,” Pecker continued, “the company is seeing a sudden loss of millions of dollars in the near term. All American Media staff must band together at this time in an effort to save jobs and stabilize the company. By working together, we will have an opportunity to restore our businesses as we work to regain the advertisers and consumers who have also been impacted and lost during this time.”