American Media, Inc. - Company Profile, Information, Business Description, History, Background Information on American Media, Inc.

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At AMI, we take pride in being always in tune with today's fast paced times and constantly changing tastes. With annual revenues in excess of $500 million, AMI will continue to grow, pursuing strategic acquisitions and maintaining its leadership role in the markets we serve.

History of American Media, Inc.

American Media, Inc., (AMI) was incorporated as The Enquirer/Star Group, Inc., in 1991 to serve as a holding company for the best-selling supermarket tabloids in the United States. Since then the company has acquired its main tabloid rival, the Globe. A line of mini-magazines rounds out the company's supermarket checkout offerings.

Tabloids are not the whole story at AMI, however. The company has amassed a number of top-selling consumer magazines relating to active lifestyles. AMI claimed a monthly readership of more than 35 million even after the proposed sale of five special interest titles in 2006. A number of mainstream publishers use the company's Distribution Service Inc. (DSI) subsidiary to get their magazines into supermarkets.

New York Origins

The National Enquirer, the Group's flagship publication, traces its history to 1926, when newspaper magnate William Randolph Hearst lent his protégé William Griffin money to found the New York Evening Enquirer. This Sunday afternoon paper was distributed throughout New York City. As partial payment of his loan, Hearst asked to use the Enquirer as an experimenting ground for new ideas. Hearst used the good ideas in his successful publications; the less successful ideas stayed with the Enquirer, and as a result the Enquirer's sales never soared. They were further undercut during World War II, when Griffin wrote such fiery editorials against U.S. military involvement in the war that he was indicted for subverting the morale of U.S. troops. (Charges were later dropped.) By 1952, circulation had dropped to 17,000 copies.

In 1952, Generoso Pope, Jr., son of the founder of New York's Italian language daily newspaper Il Progresso, purchased the Enquirer for $75,000 (financed by the Mafia, his son later said). Pope planned to gradually change the format of the paper to that of a national news-feature weekly. He dropped the paper's Democratic partisanship, increased its staff, and added a new, anonymously written "world-wide intelligence column." Although Pope initially said the newspaper would not convert to the tabloid format, the paper became a tabloid in 1953.

The greatest change Pope instituted, however, was in the paper's editorial content. Gory stories of murder and mutilation became regular features. Confessions such as "I'm sorry I killed my mother, but I'm glad I killed my father," appeared. Headlines declared: "I say 'no' to passionate potentate and he has his half-men beat me into submission!" The Enquirer's content was so salacious that New York City Mayor Wagner frequently voiced his displeasure, which eventually led to Pope's resignation from the city's Board of Higher Education in 1954. At that time, Pope also announced that he was handing control of the publication over to former general manager Roy Moriarity, although he did not disclose whether he still owned all or part of the paper.

In 1957, the paper was renamed the National Enquirer. Pope broadened its focus to include national stories of sex and sadism and also expanded its distribution. Sales grew steadily, despite content so offensive that the Chicago Transit Authority temporarily banned its sale at station newsstands. By 1966, however, sales had reached a plateau at 1 million copies per week, prompting Pope (who had once again taken control of the publication) to clean up the paper's image. "There are only so many libertines and neurotics," he told Newsweek in 1969. In defense of his earlier editorial choices he declared, "Every publication starts out by being sensational. I intended to make it a quality paper all along."

Finding a Place in the Supermarket

Analysts cited the declining number of newsstands as the real reason for the paper's stagnation. As mom and pop grocery stores and corner newsstands were gradually replaced by supermarket chains, outlets for the National Enquirer diminished. Pope sought to clean up the paper's image in order to tap into the enormous market of women who frequented supermarket check-out lines. He hired seasoned journalists, paying them some of the best salaries in the business. In keeping with the publication's new pristine image, company headquarters were moved from New York to Lantana, Florida (population 8,000), where the Enquirer soon gained acceptance in the community by sponsoring Little League teams and purchasing a new ambulance for the local fire station.

Pope also hired a vice-president for corporate planning and a public relations firm to broadcast the paper's new content. Stories such as "Poor Italian Immigrant's Son Starts Chinese Food Business in a Bathtub" were more zany than distasteful. The new Enquirer also began covering politics, albeit with its own special bent. Senator Edward Kennedy's much-publicized accident at Chappaquiddick, in which he survived a watery car crash that killed his female companion, received thorough coverage in the Enquirer. The paper even went so far as to hire clairvoyant Jeane Dixon to foretell the Senator's future.

Despite its improved image, supermarkets were initially reluctant to sell the Enquirer. Pope courted them by promising the supermarkets 22 percent of the cover price. Free subscriptions were given to wives of supermarket executives, and endorsements from Hubert Humphrey, Barry Goldwater, and Joan Crawford were made into a promotional film narrated by a well-known newscaster. When that did not work, Pope claims that he enlisted the help of a friend, Melvin Laird, Secretary of Defense during the Nixon administration, who took supermarket executives on a private tour of the White House and allowed them to meet with the President for half an hour.

Within three years, the Enquirer was available in most supermarket chains across the United States. By 1969, circulation had climbed to 1.2 million copies per week, and the National Enquirer ousted Reader's Digest from the newsdealer's top-five bestseller's list. Sales continued growing to just below 4 million a week by 1974. Gross revenues in 1973 were $17 million; the next year they hit $41 million. Advertising sales were so good that the company allegedly turned down accounts, and analysts were calling the publication "outrageously successful."

In 1978 circulation reached 5.7 million copies, but slid to just under 4.6 million by 1981. The decline was attributed to the growing number of competing supermarket tabloids, including one created by Pope. In 1979, Pope launched Weekly World News, a black-and-white tabloid that published unusual stories similar to those found in the early days of the Enquirer, printed at the Enquirer's printing plant in Pompano Beach, Florida. Within two years of its debut, Weekly World News began making a profit, with a circulation of over 700,000. By 1984, Australian media mogul Rupert Murdoch introduced the Star, a four-color gossip sheet, to take advantage of consumer desire for naughty news.

Wooing Corporate Advertisers

In 1982, Pope raised the Enquirer's cover price by 20 cents, to 65 cents an issue. Circulation, fueled by an enormous advertising campaign, rose by 11 percent. Gross revenues climbed 54 percent to $140 million. Pope also sought to improve the bottom line by luring blue-chip companies such as General Motors, Procter & Gamble, and Sears to purchase advertising space in the paper. Until the early 1980s, approximately 12 percent of revenues came from advertising. Most were small, mail-order companies offering everything from biorhythm charts to seeds for growing six-pound tomatoes. Calculating that revenues could increase by 25 percent if these small ads were replaced by full-page ads from major corporations, Pope began an all-out effort to woo advertisers, using the tag line, "You may not like the Enquirer, but 14 million people do."

Luring respectable advertisers prompted another change in editorial content, as Pope directed cutbacks in the gossip columns in an attempt to become "a service and entertainment publication for middle America." Pope used the same strategy he developed to get the Enquirer into supermarkets, giving free subscriptions to the wives of advertising executives, recording celebrity endorsements, and courting the approval of decision-makers. His strategy worked. By 1986, color ads for cigarettes, clothing, brand-name foods, and household products had replaced many of the smaller ads. Advertising revenues for 1985 were $31.1 million, up from $29.2 million in 1984.

New Ownership in 1989

Generoso Pope, Jr., passed away in October, 1988. Several of the world's leading publishing companies bid for the family-owned business, including Diamond Communications, Maxwell Communications Corp., and Hachette S.A. In June, 1989, GP Group Acquisition Limited Partnership (a partnership created by Boston Ventures Limited Partnerships III and IIIA and Macfadden Holdings, L.P.) purchased the operations for $413 million in cash.

GP Group Acquisitions instituted a number of reforms to boost revenues and cut costs. The Enquirer's outmoded printing plant in Pompano Beach, Florida, was closed, television advertising was discontinued, and editorial expenditures were reduced. In addition, mail order and classified advertising rates were increased substantially and the cover price of the National Enquirer was boosted to 85 cents in the United States, and 89 cents in Canada.

In early 1990, GP Group purchased the Star, National Enquirer's rival publication, from Rupert Murdoch's New America Publishing Inc. for $400 million in cash and stocks. At the time of purchase, the Star's 3.6 million weekly circulation was just below National Enquirer's weekly circulation of 4.1 million. That year, the company took the name Enquirer/Star Group, Inc. The Enquirer/Star Group went public in July 1991, with an initial offering of 13 million shares of Class A Stock. Also that year, the group launched Soap Opera Magazine, a weekly publication that provided in-depth coverage of daytime soap opera and was sold at supermarket checkout lines for $1.19 in the United States and $1.29 in Canada. Distribution of the National Enquirer and Weekly World News soon spread to the United Kingdom, Europe, and Asia.

Circulation declined across the publishing industry in the early 1990s, due to increased competition from television celebrity news programs. The Enquirer/Star Group responded by expanding its overseas market. The Group also entered into a number of other ventures in the early 1990s, including trademark licensing, story syndication, and the launch of What People Are Wearing, a monthly spin-off of the Star devoted to celebrity fashion and beauty. In 1993, the company entered into a joint venture with Brandon Tartikoff (former chairman of Paramount Studios) to begin production of a one-hour television program produced by the staff of the Weekly World News to be aired on network television. Stories on the one hour pilot included the usual Weekly World News fare, including a faith healer/mechanic who fixed cars by laying his hands on them and photos proving "beyond a doubt" that humans lived on Mars.

Although the Enquirer/Star Group churned out some questionable stories, the company's bottom line remained solid. Net income grew by 15 percent to $19.4 million in 1993. With a strong cash flow and bold expansion strategies, Enquirer/Star Group's future as the world's primary news source on alien sightings and celebrity romances seemed strong.

New Name in 1995

The owners of GP Group, which held 53 percent of Enquirer/Star's common stock, proposed buying out the remainder and taking the company private again in 1994. However, the offer was withdrawn as a number of major tabloid stories helped push the company's share price far beyond the price suggested for the buyout. Instead, Enquirer/Star underwent a recapitalization, issuing $200 million in junk bonds to reward its shareholders with a $7 per share dividend. The company's name was changed to American Media, Inc., (AMI) in 1995.

The largest celebrity story of the day was the O.J. Simpson trial, and AMI's National Enquirer covered it closely. Some of its exclusives were grudgingly acknowledged in the mainstream media, conferring, some said, a new level of respectability on the tabloid. This did not stop the Enquirer's circulation by slipping by a third, to about two million readers, from 1994 to 1999. At the same time, mainstream magazines were devoting increasing attention to celebrity gossip stories.

Private Again in 1999

A group led by David Pecker, including the investment firm Evercore Partners, acquired AMI in May 1999 for $850 million. Pecker, an accountant by training, had previously tried to buy Enquirer/Star as CEO of Hachette Filipacchi Magazines but was outbid by GP Group. One of Pecker's first projects after acquiring AMI was to buy its nearby rival Globe Communications Corp., which published the Globe, National Examiner, and the Sun, for $105 million. The Star was relocated from New York to the Globe's Boca Raton offices; AMI soon moved its own headquarters nearby. At the same time, the Enquirer and Star were given makeovers and bolstered by a $50 million TV campaign. In fiscal 1999 AMI had revenues of $275 million, the bulk of which came from newsstand sales rather than advertising.

2001 Anthrax Crisis

AMI was one of the news outlets targeted by anonymous letters containing anthrax in 2001. The spores killed a photo editor and sickened another employee. AMI had to evacuate its 63,000-square-foot headquarters near Boca Raton following the incident, and ultimately abandoned the building--and an archive of five million photographs collected over 50 years (it was able to save many that had been scanned into digital files).

The company's papers were in a sales slump. By 2003, the Enquirer, Star, and Globe combined were selling fewer than three million copies a week. In a move to broaden its consumer base, AMI bought Weider Publications from Weider Health & Fitness for $350 million. Weider's health-oriented magazines included Muscle & Fitness, which dated back to 1940, and Shape. About one-fifth of Weider Publications' 400-strong workforce was cut after the buy. The acquisition helped lift AMI's revenues from $315 million $515 million in fiscal 2004.

A new partner was brought in to AMI in 2003. Thomas H. Lee Partners invested $250 million as AMI's was valued at $1.5 billion. Evercore Partners participated in the restructuring with a new fund. AMI's revenues were up to $375 million for the year.

Hiring a Star Editor in 2003

Also in 2003, Star magazine was relocated back to New York. To lead it, Pecker hired editor Bonnie Fuller away from the celebrity-oriented US Weekly she had helped revitalize. (Her resumé also included the editor's spot at Cosmopolitan and Marie Claire.) The next year, Star was relaunched as a glossy magazine. AMI had also moved its mini-magazine business, valued at $40 million a year, to New York, where it was easier to recruit staff and meet advertisers.

Other titles, including the Enquirer, and Men's Health, were being retooled. The company also tested new concepts, such as magazines produced with Sylvester Stallone and Latina singer Thalia Sodi. A shelter magazine called Happy Home was aimed at young women. Looking Good Now was a cut-price health and fitness title originally distributed exclusively at Wal-Mart.

In June 2006, AMI announced it was selling off a handful of specialty magazines to focus on celebrity weeklies and active lifestyle magazines. The titles for sale were Muscle & Fitness, Flex, Muscle & Fitness Hers, Country Weekly, and the Spanish-language celebrity magazine Mira! Together, they represented sales of $84 million a year. AMI was keeping Shape magazine and Men's Fitness.

AMI's remaining titles had a total monthly readership of 35 million. Pecker told Business Week the company was expecting revenues of $560 million for 2006. The Star was being moved back to Florida yet again in the name of cutting costs.

Principal Subsidiaries

American Media Operations, Inc.; Distribution Services, Inc.

Principal Divisions

Celebrity Journalism; Health & Fitness; New Media/Brand Development; Distribution Services Inc.

Principal Competitors

Bauer Publishing USA; Rodale Inc.; Time Inc.; Wenner Media LLC.


  • Key Dates
  • 1926 New York Evening Enquirer is formed by William Griffin, protégé of William Randolph Hearst.
  • 1952 The Enquirer is acquired by Generoso Pope, Jr., for $75,000.
  • 1957 The increasingly sensationalistic paper is renamed the National Enquirer.
  • 1966 The Enquirer has weekly sales of one million copies.
  • 1969 The Enquirer is available in most supermarket chains.
  • 1971 Headquarters are relocated from New York to Lantana, Florida.
  • 1974 Annual revenues reach $41 million in a sales boom.
  • 1975 Star rival tabloid is formed in New York by Rupert Murdoch's News Corp.
  • 1978 The Enquirer's circulation reaches 5.7 million copies.
  • 1979 Pope launches Weekly World News.
  • 1982 An advertising campaign and a price increase help lift revenues 54 percent to $140 million.
  • 1989 GP Group Acquisition LP buys Pope's business for $413 million following his death.
  • 1990 GP Group buys the rival, Star, in a $400 million deal.
  • 1991 The Enquirer/Star Group, Inc., holding company is formed and soon goes public.
  • 1993 Weekly World News TV show debuts.
  • 1995 The Enquirer/Star Group is renamed American Media, Inc. (AMI).
  • 1999 A group led by David Pecker acquires AMI for $850 million.
  • 2001 AMI is among the media organizations targeted by anthrax letters; the company relocates to Boca Raton.
  • 2006 AMI announces it is selling off five specialty magazines to focus on celebrity weeklies and active lifestyle magazines.

Additional Details

  • Private Company
  • Incorporated: 1991 as Enquirer/Star Group, Inc.
  • Employees: 2,181
  • Sales: $560 million (2006 est.)
  • NAIC: 511120 Periodical Publishers

Further Reference

  • Abrams, Bill, "National Enquirer Starts Drive to Lure Big-Time Advertisers," Wall Street Journal, March 18, 1982.
  • Byrne, John A., "Slugging It Out in the Supermarkets," Forbes, March 14, 1983.
  • Calder, Ian, The Untold Story: My 20 Years Running the National Enquirer, New York: Miramax Books, 2004.
  • Carr, David, "A Tabloid King Looks Beyond Elvis," New York Times, Bus. Sec., June 30, 2003, p. 1.
  • ----, "Tabloid King Seeks Makeover from Sassy to Stable," New York Times, Bus. Sec., April 19, 2004, p. 1.
  • Case, Tony, "Check-Point Bonnie," American Demographics, October 1, 2003, p. 22.
  • Donaton, Scott, "'Enquirer-Star' Team to Bring Both Clout," Advertising Age, April 2, 1990, p. 2.
  • "Enquirer/Star Junk Bond Deal Reminds Some of 1980s Excess," Mergers & Acquisitions Report, November 21, 1994.
  • Fine, Jon, "Inquiring Minds Want Results; Times are Tougher for David Pecker's Empire," BusinessWeek, October 3, 2005, p. 28.
  • "From Worse to Bad," Newsweek, September 8, 1969, p. 79.
  • Goodnaugh, Abby, "Exclusive: It's Doom for Tabloid Archives!" New York Times, August 21, 2003, p. A14.
  • Hopkins, Brent, "Weider Staff in Local Office Is Cut by 60; Move Comes After Purchase," Los Angeles Daily News, January 30, 2003, p. B1.
  • Leonard, Devin, "The Tabloid King's Dilemma: Can David Pecker, Publisher of the National Enquirer and Star, Turn His Company Into a Glossy-Magazine Bigfoot?," Fortune, November 1, 2004, p. 164.
  • Lunsford, Darcie, "Taming the Tabloids," American Journalism Review, September 2000, p. 52.
  • Macintyre, Ben, "Mafia 'Bankrolled' Paper's Founder," Times (London), November 11, 1999.
  • Melcher, Charles, Valerie Virga, and David A. Keeps, eds., The National Enquirer: Thirty Years of Unforgettable Images, New York: Talk Miramax Books, 2001.
  • Meyer, Meghan, "'Enquirer' to Jettison New York for Boca," Palm Beach Post, April 6, 2006, p. 1A.
  • Pappu, Sridhar, "Argh! Pecker the Pirate," New York Observer, August 4, 2003, p. 1.
  • Peer, Elizabeth, "The Enquirer: Up Front Smut," Newsweek, April 25, 1975.
  • Pondel, Evan, "American Media to Buy Woodland Hills, Calif.-Based Weider Publications," Knight-Ridder Tribune Business News, November 28, 2002.
  • "Pope Quits Board of City Colleges," New York Times, September 28, 1954, p. 26.
  • Rose, Matthew, "Evercore Revamps American Media--Lee Invests $250 Million as Co-Owner of Publisher Now Valued at $1.5 Billion," Wall Street Journal, February 25, 2003, p. B13.
  • Sheridan, Terry, "AMI Building Would Be a Tough Sell If Abandoned," Broward Daily Business Review, October 11, 2001.
  • Sheridan, Terry and Anika Myers, "Sticking Around," Broward Daily Business Review, October 18, 2001.
  • "Tabloid Publisher Moving Mini-Mag Operations to New York," Associated Press Newswires, December 24, 2003.
  • Tartakoff, Joseph M., "Makeover Has 'Star' Publisher Shining," Palm Beach Post, August 28, 2005, p. 1F.
  • Washburn, Mark, "Schlock Value? With the O.J. Simpson Case, the National Enquirer Is Earning Some New Respect," Knight-Ridder Newspapers, January 28, 1995, p. 5.
  • Wayne, Leslie, "Market Place," New York Times, May 3, 1993, p. C4.
  • Wyatt, Edward A., "Tabloid Account," Barron's, June 13, 1994, p. 17.
  • ------, "Tabloid Turnabout: Why Investors Withdrew Bid for Enquirer/Star Group," Barron's, July 18, 1994.

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