American Media Inc. is looking to unload the struggling National Enquirer as well as other tabloid publications, and among the potential buyers is billionaire Ron Burkle.
New York-based AMI, which also owns the Globe and National Examiner, said its board had concluded a strategic operational review of its tabloid business, which began in August, leading to the decision to explore strategic options for the brands.
The move will “likely result in their sale in the near future,” the company said in a release.
Burkle, who controls Los Angeles-based Yucaipa Cos. and is a longtime Democratic donor, has been in talks to buy the Enquirer, the New York Times reported.
The tabloid has drawn the scrutiny of federal prosecutors for its ties to President Trump during the 2016 campaign.
Burkle made his fortune in the grocery store industry, where the Enquirer generates much of its revenue.
A spokesman for Burkle denied he was buying the Enquirer.
One former AMI associate said Burkle and AMI Chairman David Pecker are longtime friends.
“The million-dollar question is, what does Burkle get out of it?” said Stu Zakim, a spokesman for AMI from 2004 to 2006. “He’s either bailing out his friend or will shut it down and license the hell out of the assets.”
Burkle is known for scooping up struggling businesses, such as the Pittsburgh Penguins hockey team, which he acquired out of bankruptcy in 1999.
He has made several attempts over the years to buy media companies. In 2006, Burkle’s Yucaipa failed to buy 12 Knight Ridder papers, including the San Jose Mercury News, the Monterey County Herald and the Contra Costa Times.
A year later, Burkle teamed with fellow billionaire Eli Broad to bid on Tribune Co., the owner of the Los Angeles Times and other newspapers. The Tribune board eventually sold the company to Chicago real estate investor Sam Zell.
Also in 2007, Burkle paid $1.2 billion for 76 specialty magazines and their websites from Primedia Inc., including Motor Trend and Surfer.
More recently, Yucaipa and Lantern Capital joined forces in 2018 to buy Weinstein Co. for $500 million, but the deal fell apart when it was blocked by the New York attorney general’s office.
AMI’s decision to sell comes on the heels of the Jeff Bezos scandal in which the Amazon founder accused the Enquirer of extortion using leaked text messages and naked photos that the publication had obtained. Bezos claimed that the Enquirer was threatening him after he attempted to investigate the publication over its earlier articles about his extramarital affair with TV host Lauren Sanchez.
Though the Enquirer has long had a reputation for using questionable tactics to score celebrity scoops, the Bezos scandal put a new spotlight on Pecker, a former accountant who took over the company in 1999. The salacious scandal was instantly politicized.
Pecker has been a longtime friend of Trump and has admitted employing catch-and-kill techniques to protect Trump from unfavorable stories. American Media paid $150,000 to buy a story from a Playboy model who said she had an affair with Trump.
Since taking office, Trump has become a frequent antagonist of Bezos, mostly for his ownership of the Washington Post, which has aggressively pursued negative stories about the Trump administration.
Pecker now faces scrutiny from an internal AMI investigation into the Bezos leaks as well as from a federal probe into whether the company breached an immunity deal it had struck with federal investigators who were investigating Michael Cohen, Trump’s former lawyer. Cohen said Trump ordered him to arrange hush money payments to two women who had affairs with him years ago. Cohen pleaded guilty to campaign finance violations, among other crimes, because the payments were intended to influence the campaign and were not properly disclosed. AMI has denied wrongdoing.
On Wednesday, Pecker said that AMI is looking to refocus its energies on different brands.
“We have been keenly focused on leveraging the popularity of our celebrity glossy, teen and active lifestyle brands while developing new and robust platforms including broadcast and audio programming, and a live events business, that now deliver significant revenue streams,” Pecker said in the company release. “Because of this focus, we feel the future opportunities with the tabloids can be best exploited by a different ownership.”
AMI owns the celebrity gossip magazines Us Weekly, Star, OK!, In Touch and Life & Style. It also owns men’s health properties including Men’s Journal and Muscle & Fitness. AMI acquired full ownership of the Mr. Olympia competition in 2017.
Like many print publications, the Enquirer has been struggling with declining circulation and has experienced staff cuts.
AMI is believed to be carrying substantial debt, which some reports peg as high as $1 billion. Private equity firm Chatham Asset Management acquired a majority stake in AMI in 2014, when the publisher was struggling to emerge from a 2010 bankruptcy. Its investors have included California’s public pension fund, CalPERS. The decision to unload the Enquirer hasn’t come as a surprise to some people familiar with the company.
“This is not a shock,” Zakim said. “They weren’t making money and there was this embarrassment. That’s a tough combo to beat.”
Bloomberg was used in compiling this report.