NEW YORK (BLOOMBERG) - American Media is selling the National Enquirer to Hudson Media, letting the embattled publisher jettison the tabloid after being accused of trying to blackmail the world's richest man.
An agreement has been struck with James Cohen, an heir to the Hudson News newsstand chain, according to a statement on Thursday (April 18). The Washington Post reported earlier on the deal, saying he was paying US$100 million (S$135 million) for the Enquirer.
American Media announced this month that it was putting the 93-year-old tabloid up for sale, following the accusations levelled by Amazon.com founder Jeff Bezos. The publication was also accused of killing embarrassing stories about President Donald Trump.
Billionaire Ron Burkle had been rumored to be interested in buying the National Enquirer, potentially putting a high-profile Democratic Party donor in charge of a tabloid that's been friendly to Trump. But a representative for the investor said he didn't want to buy the troubled newspaper.
The sale should ease pressure on American Media, chief executive officer David Pecker and the publisher's hedge fund backers. Chatham Asset Management is the principal owner of the company and two of the firm's executives serve on its board. Leon Cooperman, a billionaire hedge fund manager, has said that his stake is relatively small.
Chatham, run by Anthony Melchiorre, has grown increasingly disgusted with the reporting tactics at the Enquirer and pushed for the sale, according to the Washington Post. The sale includes two other titles - the Globe and National Examiner - and American Media will also get paid to provide publishing, financial and distribution services for the tabloid brands.
Hudson, meanwhile, is a century-old news distributor founded by the Cohen family. It bills itself as the largest distributor of magazines and books in the Northeast and the second-largest nationwide. That may bring some advantages to aligning with the Enquirer.
In a statement, Cohen said he wants the Enquirer to collaborate more with Investigation Discovery, a cable channel owned by Discovery.
He also wants to expand the tabloid's podcast and theme-park businesses. The National Enquirer recently unveiled attractions in Branson, Missouri, and Pigeon Forge, Tennessee, offering interactive exhibits on "stories that changed the course of history."
In announcing the locations last month, the tabloid touted its role in chronicling the lives of OJ Simpson, John Edwards, and - yes - Bezos and Trump. Cohen hopes to open more of the attractions in other cities.
The Enquirer and its owner have come under scrutiny since Bezos accused American Media of trying to blackmail him with photos of him with a woman who wasn't his wife. To support those claims, he also published emails sent to his lawyer, Marty Singer, by American Media executives.
The scrutiny extended to Chatham, which was questioned by New Jersey officials over the matter. The firm also has come under review by securities regulators.
Unloading the Enquirer would shift American Media's focus toward fitness and lifestyle brands. In recent years, it acquired Us Weekly and Men's Journal, as well as Bauer Media's celebrity and teen brands.
A staple of supermarket checkout aisles for decades, the Enquirer has suffered a decline in circulation, along with a heavy debt load. American Media plans to use the deal to pay down its obligations. It expects to emerge from the transaction with about US$355 million of debt. Its interest expenses will go down by US$13 million a year.