Jimmy Pattison, one of the wealthiest businessmen in Canada, is taking over American Media Inc.’s Distribution Services Inc. and merging it into a subsidiary of his News Group operation, The News Merchandising Group.
That means a new team will be in charge of the stocking of some of your favorite magazines inside supermarket checkout racks.
DSI had a range of outside clients in addition to the National Enquirer, Star and other AMI titles, but that business has shrunk over the years. Wenner Media pulled out in anger years ago when AMI CEO David Pecker poached one-time Us Weekly editor Bonnie Fuller to be his editorial director.
Sources said that Rodale — unhappy that Pecker hired David Zinczenko to reposition Men’s Fitness as a direct rival to Rodale’s Men’s Health — was considering dropping DSI when its contract expires at year end.
DSI still handles Bauer titles like Life & Style and In Touch as well as the Rodale titles.
While numbers are hard to come by, the DSI business accounted for around $20 to $25 million in annual revenue for AMI.
During the negotiations, AMI’s big concern was that its titles might get less attention from the merged company. That explains why Pecker pushed for a seat on the board of the new entity, which will be majority controlled by News Group executives and will operate under the TNG Merchandising banner.
John Swider, AMI executive vice president and DSI president, will be president of TNG Merchandising, reporting to David Parry, president TNG GP USA.
DSI had about 1,300 employees. The newly merged TNG Merchandising will have about 7,000 employees.
“We’ll have a minority stake in a larger entity,” said Pecker.