National Enquirer owner set for bankruptcy protection

The US publisher of The National Enquirer and Men’s Fitness has said it will file for bankruptcy protection within a fortnight.American Media (AM) announced that it will restructure during an expected two months in Chapter 11 protection.During this time, the company will operate as usual, it said.The publisher has already made one attempt to trim its debt after advertising revenue fell during the global economic downturn.Last year, AM, which is backed by private equity firms Evercore and Thomas H Lee Partners, cut its debt from $1.1bn (£685m) to $850m by exchanging AM’s bonds for equity.This does not appear to have been enough to avoid Chapter 11.The publisher, which also owns Star magazine, declined to say how much debt is left on its balance sheet.It said that 80% of bondholders support the Chapter 11 deal.Earlier this year, The National Enquirer tabloid newspaper was controversially nominated for the Pulitzer prize for its coverage of a presidential candidate’s extra-marital affair.’Business as usual'”For our advertisers, employees, customers and vendors, this short period will be business as usual, with considerable upside in the future,” said AM’s chief executive David Pecker.”It will provide us with the ability to compete even more aggressively with our peers in the industry.”In the year to the end of March, AM had revenues of $415m and earnings before interest, taxes, depreciation and amortisation of $114m.Many newspapers and magazines have struggled during the economic downturn as advertising revenues declined.Newsweek, the US weekly, was sold for just $1 – and $47.3m of debts – in August to stereo equipment magnate Sidney Harman and Harman Media – Bbc