Staffers across American Media are getting a drastic pay reduction as company leadership cites economic pressure caused by the coronavirus.
The company, owned and operated by David Pecker and seemingly struggling for the last year or more with dipping circulation numbers, a presidential scandal and executive scandal, and now an apparently stalled sale, told staff they will be receiving a pay cut of 23 percent starting April 1 because of pressure on the business caused by the coronavirus. American Media, which last year went from being incorporated to an LLC, is best known for its celebrity news and gossip titles like The Enquirer, Us Weekly and InTouch, among others.
Becca Strassberg, a senior editor at Us Weekly, wrote of the pay cut on Twitter, saying she and everyone else with the company was notified without warning by e-mail on Saturday afternoon. She estimated that the cut would mean a reduction in salary of at least $15,000 for AM workers, “putting us well below the New York state minimum.” The minimum pay for full-time salaried work in New York City is $58,500 for companies with 11 or more employees, after the Department of Labor increased wages last year. However, it’s understood that the company does intend to maintain minimum wage standards for employees, depending on their location and residence.
Nevertheless, Strassberg said, “The e-mail doesn’t tell us when, if ever, our salaries will be restored.”
A company spokesman said: “American Media is committed to doing everything we can during the COVID-19 crisis to ensure our staff maintain their employment and health benefits.”
In February, AMI laid off the entire New York staff of Men’s Journal, as WWD first reported, and cut the magazine’s print schedule to six issues a year from 10. The company was said to be moving all operations for the title to Carlsbad, Calif., combining it with operations of the Adventures Sports Network, which has a few publications dedicated to nontraditional sports, like biking and snowboarding. AMI acquired that publisher early last year.
Around that same time, Jeff Bezos, Amazon founder and chief executive officer and separately the owner of The Washington Post, publicly accused Pecker’s company of “extortion” in its attempt to gain leverage over him through its discovery of an extra-marital affair the billionaire was having. Bezos linked it to coverage by the Post around American Media’s payouts to women who had had affairs with President Trump, affairs that were at risk of coming to light during his presidential campaign.
Not long after these accusations by Bezos, American Media said it was selling The National Enquirer for $100 million to Hudson Media, operated by James Cohen, part of the family that founded Hudson News Distributors. The deal included the U.S. and U.K. versions of the title, as well as other gossip titles The Globe and National Examiner, and American Media said at the time the titles collectively pull in $30 million in revenue annually.
But that sale is, a year later, is still yet to close. According to a report in The Daily Beast, Saturday’s pay cut has staff on guard for worse things to come. A former editor for The National Enquirer told The Daily Beast that the publication was already “on a ventilator.”
The coronavirus is expected to take a sizable bite this year out of advertising spend in media, from newspapers and magazines to TV, as marketing spend tends to be the first thing brands pull back on when financial difficulties arise. Already Buzzfeed has enacted a pay cut for its employees, but on a sliding scale based on income (with their remaining in effect reviewed monthly), and Playboy magazine has ceased to print, as WWD first reported — both companies cited immediate effects of the coronavirus on business.
Despite most online news operations seeing a huge uptick in traffic as people in the U.S. and elsewhere are ordered to stay indoors and all nonessential work halted to prevent the further, it is not translating to an increase in ad sales for anyone, not even advertising giants like Google and Facebook. Both companies have advised that their advertising revenue will decrease, at least in the near term.
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