American Media Inc.’s longtime chairman and chief executive David Pecker has been put out to pasture, and AMI, the parent company of The National Enquirer, will soon cease to exist and merge with a company that markets face masks, hand sanitizer, gloves, disinfectant wipes, and vitamin supplements.
“This is a transformative event that significantly reshapes Accelerate and American Media into a new type of media and marketing company with an unprecedented reach all the way to the sales floor,” claimed a press release issued late Friday by Georgia-based marketing executive David Parry, the CEO of Accelerate360, LLC.
Parry added that longtime AMI exec Chris Scardino has been named president of the new hybrid tabloid journalism-marketing enterprise, which, months before the scheduled Oct. 1 merger, has already been trying to execute one of its vaunted corporate synergies: According to people familiar with the situation, AMI magazines have been running photos of celebrities sporting face masks, opposite display ads for COVID-19 masks that are marketed and distributed by Accelerate360.
Friday’s announcement—which noted that AMI will change its name to A360 Media, a subsidiary of an enterprise that claims to be the nation’s largest distributor of periodicals, among other products, and boasts “3 million square of feet of warehouse space fully equipped with state-of-the-art warehouse technology”—came as yet another unpleasant surprise for hundreds of AMI staffers.
In March, staffers were forced to take a 23 percent pay cut as the COVID-19 pandemic hit the United States, and they now must suffer a downgrade in their health insurance coverage, according to employees interviewed by The Daily Beast, while their job security is increasingly uncertain.
“We’re all feeling pretty terrible right now,” an AMI employee told The Daily Beast. “We’ve all been through a bunch of mergers before and when they talk about ‘duplicated functions’ and ‘synergies,’ I automatically think layoffs. I can’t even fathom what this is going to look like.”
A second employee said: “This means almost no chance of pay being restored to pre-pandemic levels. It seems Pecker is gone and we are all happy about that, but questions remain whether layoffs will come once this new company takes control.”
The nearly 69-year-old Pecker, who during the last presidential campaign weaponized the Enquirer and other AMI publications to help his then-pal Donald Trump and attack Trump’s opponents, has been demoted “effective immediately” to the role of executive adviser, a fancy corporate name for kibitzer.
As federal prosecutors investigated felony violations of campaign finance laws arising from AMI’s payment of $150,000 in 2016 to a former Playboy model to buy the rights to but never publish her claim that she’d had an affair with Trump, Pecker and his sidekick, Australian import Dylan Howard, signed an immunity deal that required them to cooperate with the feds. A woman answering the phone at Pecker’s Greenwich, Connecticut, estate on Friday claimed not to know who he is.
“It’s unbelievable. What a grisly end,” one former AMI staffer told The Daily Beast. “It’s a long sad history of mismanagement from the top from somebody who never understood what these magazines were about. Pecker’s so-called friendship with Trump turned out to be the kiss of death.”
The press release—which doesn’t note that Chatham Asset Management, the hedge fund that owns AMI, also holds a substantial stake in Accelerate360—touts such AMI titles as Us Weekly, Life & Style, OK!, and Men’s Journal, but doesn’t even mention the Enquirer.
In April 2019, AMI had announced with great fanfare that Hudson News owner Jimmy Cohen had agreed to purchase the Enquirer for $100 million—a claim that was greeted with widespread skepticism by media observers and now turns out to be untrue.
The press release’s omission of the storied supermarket tabloid, which has seen newsstand sales plummet from over four million copies weekly before Pecker acquired it two decades ago to around 100,000 now, has prompted observers to question whether the new company—after the Oct. 1 merger—plans to continue publishing the once-influential Enquirer founded by the larger-than-life Generoso Pope Jr.
“I have been saddened over the last 20 years by the ever-increasing downward trajectory of the National Enquirer in both editorial and sales,” former Enquirer Editor-in-Chief and President Iain Calder emailed The Daily Beast in reaction to Friday’s news. “Frankly, the leadership did not understand the unique qualities that helped us sell up to 5 million copies a week in the three decades before it changed hands around the year 2000.”
Calder added: “If the new owners know how to recapture some of the past circulation secrets, I will be extremely happy. If not then c’est la vie. I just know I was proud of a publication that once caught the attention of all North America and made 25 million readers a little happier every week.”