As a youngster in public relations, we used to reassure clients that people would read anything by pointing out that a million Americans bought the supermarket tabloid National Enquirer each week. Today that trashy publication is down to about half that circulation but it is finding a new digital life under the management of American Media Inc. (AMI). It was hard to know whether to laugh or cry when learning that an AMI executive responsible for the National Enquirer is now coming onto the board of Canada’s largest print media organization Postmedia.
The American is going to have to be a wonder worker to help stem the red ink in Paul Godfrey’s media empire. It seems that about once a week, we get a telemarketer calling to plead with us to subscribe to the National Post. Nobody appears to care though if we read the local Sun Media paper, also owned by Postmedia.
It seems that the American hedge funds that really own Postmedia are starting to realize that Paul Godfrey is not a miracle worker and they will never get all their money back. New Jersey-based Chatham Asset Management and fellow hedge fund Goldentree Asset Management have gone their separate ways in making anything out of Postmedia. Goldentree has put its larger share up for sale.
This is counter to Chatham’s converting about half its outstanding debt to about one-third of the equity in the Canadian media company. Since they are also major equity owners in AMI, they have put AMI executive David Pecker on the Postmedia board.
Pecker has been with AMI for a reported 17 years. During that time, he has been chairman, president and CEO. By taking the National Enquirer into the digital world, he has turned the company around and opened substantial new revenue streams for the tabloid.
The only evidence of his appointment to Postmedia’s board so far is the further decimation of Postmedia staff with an announcement by Postmedia that remaining staff are being offered buyouts to reduce staff by another 20 per cent. After the layoffs of earlier this year and the consolidation of news rooms, it is a wonder that there are staff left to lose.
But the good news for Paul Godfrey is that he gave himself a raise of some $400,000 to an annual salary of $1,700,000. Have you seen the new National Post Enquirer yet?
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Copyright 2016 © Peter Lowry
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