American Media (Flex Magazine) in huge debt

[FrenchFrie]

well there's a reason why ALL papers mags worldwide are going online and losing money on their paper formulas..

[Benny B]

paper mags are useless, soon anyone with have a handled phone/internet browser/gps/mp3/vid player in the pocket with an internet conexion...paper is a thing of the past.

And people felt television would destroy the radio industry too. 

There will always be a use for newspapers and magazines. They will simply need to adjust to lower profit margins.

[Special Ed]

I disagree... have you tried reading online versionf os magazines?  It's kinda a pain in the ass.  Sometimes you just wanna stretch out and read without sitting at a computer.  And there's always the need to read in the bathroom... can never replace mags for that.

It's called the Mac Airbook and it's lighter than a copy of MD or Flex. It fits right on your lap and you can post on Getbig while taking a crap. In addition to Youtube, Redtube, and YouPorn, you can even watch 'Entourage' right from your toilet!

[dantelis]

It's called the Mac Airbook and it's lighter than a copy of MD or Flex. It fits right on your lap and you can post on Getbig while taking a crap. In addition to Youtube, Redtube, and YouPorn, you can even watch 'Entourage' right from your toilet!

But god forbid you drop it in the toilet by accident.

[Stark]

But god forbid you drop it in the toilet by accident.

god forbid you drop it anywhere

[Ron]

No matter what - magazines, books and newspapers will still be around.  We still get 'Entertainment Magazine' as well as a myriad of bodybuilding magazines, even with the age of the internet. But yes, when cable came along, many said the papers would go. When the internet came along, many said television would be gone. When the DVDs and video tapes came along, many said the movies would go down.  All can adapt.

[Purge_WTF]

Shawn Ray breaks the bad news on American Media through an email.

March 12, 2008 -- IT'S a race against the clock for American Media, publisher of the Star, the National Enquirer, Shape and Men's Fitness, following a downgrade by Moody's yesterday on the publisher's approximate $1.08 billion in debt.   The downgrade was prompted by "heightened concern that American Media's liquidity profile and weak free cash flow prospects will likely be insufficient to repay the company's maturing debt in 2009," according to Moody's   Although over $400 million of the debt isn't due until early next year, a lot is riding on the current fiscal quarter, because the mountain of debt has now moved to "current" debt.    If the company has not figured out a way to solve its looming debt load then it could be forced into a default. The ideal way out, would be if American Media CEO David Pecker and Ron Burkle, the billionaire supermarket magnate behind Source Interlink Companies, finally figure out a way to complete the long-discussed merger of the two concerns.  On that front, the banks are demanding that the two sides come up with more cash to complete a deal, because banks are skittish about lending to such a debt-heavy concern.  A combined company would carry debt of over $2 billion.

While Pecker and Burkle are still said to be talking and to be interested in getting a deal done, not all of the financial partners are convinced of its merits.  The two sides still need to find a way to come up with about $200 million more in cash, according to one source.  But what if the merger doesn't happen?  "They'll have to cut a deal with their banks and senior lenders before they file their next 10K," said the source.   The 10K contains the annual financial results for the fiscal year ending March 31 - just over two weeks away.   The report won't have to be filed until late June - but it is drawing near.   If there is no agreement in place, the independent auditors would have to insert a note warning of pending doom.   As one bondholder noted, "It becomes a kind of a domino effect."   Bondholders ultimately could roll over and issue the company more junk bonds, postponing the due date.   But to do that, American Media will have to offer another one-time "sweetener," usually a seven-figure fee to the bondholders.   If American Media gets new junk bonds, they could carry even higher interest rates than the 10.25 percent due on the current notes.   

Moody's new rating for the company has sunk to Caa2 from Caa1. To make matters worse, Moody's placed all American Media ratings under review for further downgrades.   But one analyst said despite the down grade, bondholders aren't in a panic.   "Operationally, they are doing better lately," said one bondholder. "We'll see what happens."   Said another source with knowledge of the situation, "They are going to be making news in the next three months, one way or another."   An analyst said, American Media "can play chicken with bondholders to get them to ex tend."   In that scenario, the alternative is to issue new bonds due in 2011 or a "messy bankrupt company with bonds much lower."   Said the analyst, "Bondholders probably blink and take the rollover bond."

  Hi, Romano.

[HTexan]

No matter what - magazines, books and newspapers will still be around.  We still get 'Entertainment Magazine' as well as a myriad of bodybuilding magazines, even with the age of the internet. But yes, when cable came along, many said the papers would go. When the internet came along, many said television would be gone. When the DVDs and video tapes came along, many said the movies would go down.  All can adapt.

plus books and mags are easier on the eyes to read.

[HowieW]

Flex rocks.

I subscribe to both FLEX and MD. they seem to sum up the BB scene pretty well. I am fan of bodybuilding and don't follow major team sports , period. I also enjoy track and field.
I hope FLEX does fine, it is a major BB mag and if you like BB you want the main mags to make it.
Howard

[G o a t b o y]

This is a finance issue that has little to do with whether the publications are making an operating profit or not...  it's just a reflection of some bonehead fuccking up the proforma, overvaluing the mags, and paying too much for them largely with debt.

Sucks for the current owners, but if the mags are making an operating profit, they will continue to exist, whether they end up merged, spun off, or sold off in a bankruptcy liquidation.

Winner = Joe Weider

Loser = Pecker and his investors.

Collateral damage = Flex staff who likely have to deal with shrinking budgets and enormous pressure to meet AMI's unrealistic expectations.



Now, whether paper magazines have any future in the long run or not...  that's a separate conversation.

[Matt C]

.

[G o a t b o y]

Joe Weider and his typically in this situation does not define him as a winner.  He is a parasite for leaving AMI high and dry like this. 

 


You lead a pretty sheltered life, dontcha, Matt?

I wouldn't doubt if he cooked the books before selling his magazine portfolio too.

What is Weider's racial background again...?

While he probably fed Pecker a wildly optimistic view of the mags' potential, I doubt he colored outside the lines...  he simply played off Pecker's greed and desire to get a deal done.  He Jewed him.  Happens every day...  welcome to the business world! 

[Matt C]

.

[G o a t b o y]

Oh, you mean the Jew owned corporate world?  Yeah, the "dog eat dog" (Jew eat white European) world of business?

Yeah, manipulation is a virtue. 

Whatever happened to honesty?  If genes for manipulation didn't exist, people wouldn't need to be so cautious when taking financial risks.  It's the scum who make us so protective of our assets.

Those who end up on the wrong side of these types of deals have no one to blame but themselves.  They don't do their homework, and they "force" the numbers to work even when it would be obvious to a third grader they don't because they are high on greed, emotion, or both. 

This isn't a shady contractor selling a little old lady a bad roof...  it's guys in the big leagues who should know better.  Caveat emptor.

[JohnnyVegas]

Those who end up on the wrong side of these types of deals have no one to blame but themselves.  They don't do their homework, and they "force" the numbers to work even when it would be obvious to a third grader they don't because they are high on greed, emotion, or both. 

This isn't a shady contractor selling a little old lady a bad roof...  it's guys in the big leagues who should know better.  Caveat emptor.

NO ONE pays $350 million FOR ANYTHING  without doing a full proof due diligence check.

The fact is Peckerhead over paid Weider for the mags like the Texas Rangers overpaid for A-Rod.

NO ONE was going to pay Weider $350 million, except some bonehead, and that bonehead was Peckerhead.

[Matt C]

Those who end up on the wrong side of these types of deals have no one to blame but themselves.  They don't do their homework, and they "force" the numbers to work even when it would be obvious to a third grader they don't because they are high on greed, emotion, or both. 

This isn't a shady contractor selling a little old lady a bad roof...  it's guys in the big leagues who should know better.  Caveat emptor.

True enough, but I imagine that Weider had the foresight to know Pecker would ultimately end up in a bad spot after the deal.  I couldn't personally live with that.  That comes down to IQ, intent, and GENES.

As Woten said:

Europeans may have been the most fearsome race of conquerors in history, but we did it all with some class. For every sin, ten virtues. For every prison, ten cathedrals. For every massacre, ten universities. For every depredation, a thousand acts of kindness.

http://forum.bodybuildingpro.com/showthread.php?t=3496

People by and large will eventually revolt against manipulative tactics.

But hey, Rome rose and fell.  People do make wrong decisions when driven by the exact qualities you described.  Ultimately Pecker does need to live with the consequences of his actions, which were his alone.

[G o a t b o y]

True enough, but I imagine that Weider had the foresight to know Pecker would ultimately end up in a bad spot after the deal.  I couldn't personally live with that.  That comes down to IQ, intent, and GENES.

Not Weider's problem.  If Pecker valued the mags at $350M, who is Weider to question it?  If you sold your house to someone at the height of the California housing bubble at the then market price, then a year later it was worth 25% less, should you feel bad even though you and any idiot out there (except the idiot buyers at the time) could have seen it coming?

[G o a t b o y]

If this case is really so simple, then you are correct.  I'm saying that Weider likely cooked the books using a Jewish recipe. 

If he falsified the financials, then he would be guilty of fraud and could be held accountable criminally and in civil court.  But I doubt that's the case.  In all probability, it was as I said and Pecker's crew simply forced the numbers and used the most wildly optimistic scenarios, all at a time when the publishing industry was undergoing a fundamental change for the worse.  Again, this kind of thing happens all the time.