Could Bono Save AMI?
With no sale in sight, CEO David Pecker hints at search for capital.
NEW YORKâWith a long-rumored sale to Source Interlink seemingly ground to a halt, American Media Inc. chairman and CEO David Pecker says heâs looking at all optionsâincluding an influx of capital similar to what Elevation Partners, the $1.8 billion investment company backed by Bono, the U2 singer, gave Forbes in 2006.
âI would do that in a heartbeat,â Pecker said during wide-ranging talk at a Magazine Publishers of America breakfast in New York this morning. But Pecker declined to say if he was in sale or financing talks with any private equity firms, or to give an update on the publicly proposed sale of Weider Publications, the company he bought in 2002. (Pecker now considers the $350 million acquisition his âbiggest success.â âPeople said âDavid overpaid.â We didnât. You get what you pay for.â)
For the moment, Pecker is focused on improving AMIâs financial footing while building out an events business. He pointed to the successful launch of Menâs Fitnessâ Ultimate Athlete, a âseven-figureâ event held in Central Park earlier this year, as a prototype for consumer publishers to follow. (Pecker says heâs in discussions with a television producer to take the event on a âfive-to-ten city tourâ culminating in a television special.)
For the National Enquirer and Star, a brand expansion to television would âabsolutely require a partner,â similar to what TMZ.com has done in the celebrity space. Television, Pecker said, is âvery expensive.â
Pecker, former CEO at Hachette, also said publishers should at least begin to consider product placement as an untapped revenue stream, although, he said, AMI has ânever had that conversationâ with marketers and wouldnât want to âoverpromiseâ without being able to deliver such editorial.
Was Bonnie Fuller Worth $2 Million a Year?
When asked directly whether Bonnie Fullerâthe high-profile editor of Star who last week announced she would resign from AMIâwas worth her $2 million annual salary, Pecker said he had no regrets hiring Fuller away from Wenner Media's Us Weekly. âLooking at the competitive set, I thought it was a perfect investment to make.â
âStar was a 60-page tabloid selling on roto-paper,â he continued. âNobody has ever changed a 60-page tabloid into a 100-page glossy magazine." Pecker added: âI can't think of anyone I know who's more capable and worth more dollars than her to create shareholder value for that magazine.â
What Pecker does regret, he said, was moving the National Enquirer from Florida to New York and hiring an entirely new staff from London to run the magazine. When it didnât work out, he said, âI had to rehire the people I had let go.â
While Pecker sees more consolidation coming in the industryâthe retailers are going to make that happenâhe doesnât see it happening in the celebrity category. But, he warned, wholesalers are âgetting hit hardâ with fuel costs, and are moving to less deliveries per week, something that will hurt magazines with weekly distribution. âTheyâre going to say âYou get the product there yourself.ââ
MORE COVERAGE: Fuller's Boss on Whether She Was Worth It [Portfolio]