There it is - AMI is now selling Muscle & Fitness and Flex Magazine. You don't think I am serious. Then check today's Wall Street Journal. This was leaked out. This will be the last year with AMI and the Olympia.
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NEW YORK (Reuters) - Publisher American Media Inc. said on Wednesday it is exploring the sale of five of its 16 magazine titles, including Muscle & Fitness, as part of a strategy to refocus on its celebrity weeklies and lifestyle magazines.
The publisher of celebrity-focused Star and The National Enquirer said it is looking to sell Flex, Muscle & Fitness, Muscle & Fitness Hers, Country Weekly and Mira!. American Media said it has hired JP Morgan Securities Inc. and Bear Stearns & Co Inc. as advisers.
The company said the five titles generated an estimated $84.0 million in revenue for the 12 months ended March 31, and operating income plus depreciation and amortization of $29.6 million.
Separately, American Media is likely to take a trademark impairment charge in its fiscal fourth quarter ended March 31, 2006 of about $134 million to $160 million, to reflect the declining value of its assets including The National Enquirer, it said in a filing.
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American Media to Sell
Five of Its Magazine Titles
By DENNIS K. BERMAN and SARAH ELLISON
June 14, 2006; Page B3
American Media Inc. is putting five of its 16 magazine titles on the auction block, as the publisher tries to find the right mix of businesses during months of tumultuous reorganization, people familiar with the matter said.
The titles for sale include Muscle & Fitness, Flex, Muscle & Fitness Hers, country-music magazine Country Weekly and Spanish-language celebrity title Mira! The five titles produced revenue of about $84 million in the 12 months ended in March, and operating income plus amortization of around $30 million.
New York-based American Media is hoping to fetch anywhere from 10 to 13 times the operating income, the people familiar with the matter said, giving the titles a target price of at least $300 million. J.P. Morgan Chase & Co. and Bear, Stearns & Co. are handling the sale, according to the people familiar with the matter.
Private-equity firms Evercore Partners and Thomas H. Lee Partners bought American Media in 1999 with an eye to transforming the tabloid publisher into a legitimate consumer media concern. Three years ago American Media and its chief executive, David Pecker, embarked on a strategy to diversify away from the National Enquirer and Star, its two big celebrity-focused magazines. The company spent $350 million to buy Weider Publications, owner of seven magazines, including Shape and Men's Fitness. At the time, Mr. Pecker called the move one that would "transform" American Media "into a major media company."
While American Media will retain Shape and Men's Fitness, it's clear that those ambitions are being throttled back amid tepid financial results. Earlier this year it shuttered three money-losing magazines and scrapped a plan to bring in a flock of London tabloid journalists to reinvigorate the National Enquirer. After delaying financial reports for accounting restatements, the company fell into technical default of lending agreements with banks.
In the six months ending in September 2005 -- the last for which public financial statements are available -- American Media reported a net loss of $13.2 million on revenue of $266 million. Long-term debt stands at around $862 million.
Ad revenue for the National Enquirer fell 15% in May versus a year ago. At Shape, ad revenue dropped 3.4%. Ad revenue was up 14% at Men's Fitness and up 4.4% at Country Weekly, according to data from Publisher's Information Bureau.
Among other problems, the 2002 takeover of Weider has been hampered by government crackdowns on the advertising of dietary supplements. Diet pills and other weight-loss remedies promised to be a major source of ad revenue for the health and fitness magazines but have been whittled away in recent years as the Federal Trade Commission has tightened its restrictions on the often outlandish claims diet companies make in ads. Maintaining an infrastructure for one Spanish-language title also proved costly.
American Media is hoping it can better cross-sell advertising among its remaining titles, which include Fit Pregnancy and Natural Health, according to people familiar with its thinking.
