In a dizzying round of deal making, American Media Inc, owner of National Enquirer and Star magazine, landed Us Weekly, paying what sources told the Post said was $100 million.
As recently as Monday, the expectation was that Tronc, the owner of the Chicago Tribune and LA Times was going to pay $110 million for the glossy celebrity gossip magazine, beating out not only AMI, but a variety of other tire kickers from Time Inc. to the Daily Mail.
American Media announced the deal Wednesday afternoon, confirming Media Ink’s exclusive report Tuesday that it was a “done deal.”
One insider said US Weekly staffers “were in tears” upon hearing the news Wednesday afternoon. When Tronc appeared to be the winning suitor, insiders were being assured there would be no staff cuts.
Now, according to one insider, “It feels like we are on death row now — just waiting for the firing squad to arrive.”
The word circulating inside is that AMI already “has a list of who they are taking and there are 15 names on it which would mean layoffs exceeding 100 people. We have been told we will learn more on Friday.”
AMI declined to comment on any potential layoffs.
Tronc itself had looked the winning bidder only because the original $90 million deal to sell Us Weekly to AMI fell apart weeks earlier.
Michael Ferro, the executive chairman of Tronc, apparently ran into some stiff resistance from his board and suddenly the deal was off. Us Weekly has seen its newsstand sales plummet with the rest of the celebrilty category but still said to be making at least $17 million a year by mid-2016.
The magazine had a long and checkered history. It was started by the New York Times as a competitor to People in 1977. Wenner acquired it 1985 from Macfadden Publications and brought on Walt Disney as a joint venture partner when he moved to weekly.
Eventually, Wenner paid $300 million to buy out the Disney portion of the joint venture and still had a $59.1 million outstanding loan in mid-2016 from that deal.
AMI CEO David Pecker, who has yet to address the staff, was jubilant. “The addition of such a strong stand alone media brand like Us Weekly underscores AMI’s continued focus on our assertive strategy to expand our business and further establish our distinct advantages in today’s new media landscape,” he said in a statement.
Us Weekly staffers got the word on Wednesday when Us Weekly editor Michael Steel addressed the editorial staff and Gus Wenner, the company’s head of digital and son of Jann Wenner, sent a company wide email to staffers.
“People are bummed because Tronc said they were going to keep everyone’s jobs,” said one worried insider.
Wenner and Pecker are both known as mercurial bosses, but are on opposite sides of the political divide. Wenner Media is now down to 1.5 print magazines in its empire. It has a 51 percent stake in Rolling Stone, after selling 49 percent to Singapore-based investment firm Bandland Technolgies last year. Men’s Journal, the other print title, has been a perennial money bleeder at the company. Wenner Media also has a digital-only title, Glixel, started by Gus Wenner.
Us Weekly had a string of five consecutive Trump covers earlier this year and while some were positive, others pointed out problems within the family. The issue that hits later this week has J. Lo and A-Rod on the cover, so it does not appear that the weekly is pushing favorable Trump stories as way to impress the new boss.
Staffers are also worried about moving from Us Weekly to a more sensational environment with a smaller staff.
“There is a difference between sensational and accurate,” grumbled one insider.
Neither Pecker nor editorial director Dylan Howard had addressed the staff by close of business Wednesday.