The National Enquirer’s parent company, American Media Inc., has said the tabloid’s plentiful and positive coverage of President Donald Trump has been good for business.
If so, it hasn’t been enough to boost the company’s overall performance.
Nonpublic AMI financial reports reviewed by The Wall Street Journal reveal a company with ballooning debt, falling revenue and shrinking newsstand sales at its print magazines, including the flagship Enquirer as well as OK! and Star.
Revenue for the fiscal year that ended in March 2017 was $203.8 million, down 9% from the prior year and 29% from 2014, when the company completed a substantial restructuring. Its outstanding debt load stood at $920 million at the end of December. Acquisitions of Us Weekly and Men’s Journal in 2017 helped increase revenue in the first three quarters of fiscal 2018 to $195.5 million, from $154 million in the year-earlier period, but they also added more than $100 million in debt.
Aggressive cost-cutting has kept AMI hovering around profitability on an operating basis, but the company has routinely booked quarterly and annual losses in the tens of millions of dollars due to amortization costs related to its debt, the financial reports show.
AMI Chief Executive David Pecker has sought to turn the company around, in part by pursuing acquisitions. Earlier this year, the company bid $325 million to acquire several former Time Inc. publications from Meredith Corp. , but was rejected, according to people familiar with the matter. The move was partly aimed at bolstering AMI’s digital strategy, the people said.
AMI isn’t alone in struggling as younger readers shift away from print. The decline in newsstand sales the company has experienced is in line with its competitors.
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