TRUTH OR DARE: David Pecker has been talking up the fortunes of American Media, but the company’s most recent filing with the Securities and Exchange Commission shows there’s a long way to go.

AMI’s net profits fell 90 percent in the quarter ended Dec. 29, plummeting from $6.9 million to just $692,000. Advertising revenues at the company’s tabloids actually fell more than $2 million in the quarter and newsstand sales fell 9.7 percent. It wasn’t an isolated incident, either — over the last nine months, advertising revenue at the tabloids was flat while the company’s net profits fell by $10 million because AMI’s $1 billion debt grew faster than the profits needed to repay it.

This story first appeared in the February 20, 2004 issue of WWD. Subscribe Today.

Pecker’s investors can blame the Weider acquisition for that. Adding Weider’s body-building magazines such as Muscle & Fitness and Flex, along with more mainstream titles such as Shape and Men’s Fitness, boosted revenues tremendously but forced AMI to swallow large amounts of debt. While Pecker and editorial director Bonnie Fuller tinker with the stalled tabloids — especially the total overhaul and relaunch of the Star in April — they’re depending on the Weider magazines to throw off the cash needed to keep up on the debt repayments. But those muscle titles look like the next piece of AMI’s empire to sag.

The Weider books (with the exception of the very mainstream Shape) have traditionally depended on advertising for supplements such as the now-banned ephedra, and considering President Bush has declared war on steroids (while Major League Baseball currently grapples with its own supplement scandal), those ads, the publisher admits, have begun to dry up. Instead of one shaky division, AMI now has two.

“Between the muscle supplement business that is the bread and butter of the Weider Publications — that Pecker clearly bought at a premium — and the slow start toward building advertising pages in a much more expensively produced Star, the overall plan for American Media has to be looked at with some concern,” said a source familiar with AMI’s financials.

But it’s already taken care of, said an AMI spokesman. Shape and Men’s Fitness are adding ad pages faster than Flex can shed them, he said. — Greg Lindsay

CHILD’S PLAY: While New York magazine’s readers are fretting over whether they’re feeding their kids too much (this week’s cover subject), Time Out New York’s would rather know the best restaurants at which to feed theirs. Or that’s the premise, anyway, behind TONY Kids, which debuts March 1. Currently slated to be published four times a year as a stand-alone title with its own subscribers and weekly listing updates online, TONY Kids is an intermediate step on the way to world domination, with Time Out Chicago launching in the fall.

TONY’s London cousin tried a kids’ edition (now discontinued) a while back, but TONY president Cyndi Stivers, said her version is an outgrowth of the magazine’s apparently popular “Kids” page (which the childless never notice while flipping to the Music section). “We’ve been waiting for the technology to catch up with the audience. It’s finally acceptable to have a sort of mixed print-and-online magazine. Parents are now used to getting a lot of information about their kids online, from schools, etc. Our core audience when we launched was Gen X, and now they’re having kids.” — G.L.

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