BOCA RATON, Fla.—American Media Inc., the parent company of the once-recession-proof National Enquirer and Star magazines, has filed for Chapter 11 bankruptcy protection while reorganizing under a previously negotiated plan. American Media also is responsible for all non-editorial functions related to Playboy magazine.
“The Boca Raton, Florida-based publisher listed assets of less than $50,000 and debt of as much as $1 billion in its Chapter 11 filing today in U.S. Bankruptcy Court in Manhattan,” reported Bloomberg. “A separate petition of operating subsidiary American Media Operations Inc.’s lists assets of $100 million to $500 million and debt of more than $1 billion.”
The company, which will attempt to emerge from court protection against creditors in 60 days or less, “terminated a previously proposed debt-exchange offer and announced on Nov. 1 that it would undertake a pre-packaged Chapter 11 filing,” said Bloomberg, adding that holders of notes and bank debt would receive cash, new notes or stock.
David Pecker, the chairman and chief executive of American Media, said in a statement that the company “is engaging in this strategy from a position of financial strength and confidence.”
The total circulation for American media titles is 6.8 million. In addition to popular tabloid fare such as National Enquirer (circ. 695,000) and Star (circ. 940,000), the company also publishes Men’s Fitness and Shape, which leads the company in circulation at 1.65 million.
American Media also took over operations for Playboy magazine in 2009 in a deal that gave the publisher control over all the operations of the magazine—including production, circulation, advertising sales, marketing and other support services—but left editorial control in the hands of the Chicago-based lifestyle brand.
As reported last week, "Playboy magazine saw a slight uptick in sales during Q3, from $9.4 million last year to $10 million. Circulation revenues increased by 20 percent year to year, as the company published three issues during the third quarter, compared with two last year."