Is The National Enquirer in Its Final ‘Death Spiral’? 1

Swashbuckling tabloid editor Iain Calder—a top executive at the National Enquirer when it dominated the lowbrow media landscape, and the popular culture writ large, with Elvis in his coffin, Gary Hart and Donna Rice aboard the Monkey Business, and O.J. Simpson’s Bruno Magli shoes—can’t bring himself to read it these days.

“I can’t pick it up without thinking, what has this become now? It’s a rag,” Calder told The Daily Beast, speaking from his West Palm Beach home with a trademark Scottish burr that he has refused to shed after more than 50 years in the United States. “I haven’t read the Enquirer in probably 15 years. It just upset me.”

There are, of course, countless reasons why the once golden fortunes of the Enquirer and American Media Inc., the weekly tabloid’s parent company for the past two decades under the thrall of accountant-turned-celebrity publisher David Pecker, have suffered their painful reversal.

“Now, given the importance of newsstand sales for AMI, the impact of the virus has got to be disastrous,” said media consultant Peter Kreisky, who has known the 68-year-old Pecker since they worked together at CBS’s now-defunct magazine group in the 1980s. “This is a plague that is devastating the publishing industry.”

As for the Enquirer, among other AMI titles, “I don’t hold out much hope for its long-term survival, frankly,” Kreisky said. Indeed, a supposed $100 million sale of the Enquirer to Hudson News impresario Jimmy Cohen—announced with great fanfare more than a year ago—has yet to happen, and many industry observers are skeptical that it will.

“It’s the last of the dinosaurs,” Kreisky said. “It’s past its sell-by date—not only from the point of view of its content but also its style, which is a throwback to the past. So the question is, is it a dinosaur or a cockroach—a cockroach that will survive the end of time?”

Billionaire hedge fund manager Leon Cooperman—like Pecker, a minority AMI owner, but “way under” the 10 percent he’s reported to own, he said—told The Daily Beast: “It’s a difficult business, and they’ve been hurt. A lot of the shit they sell [is] at airports—and at airports the traffic is way down.”

Meanwhile, Pecker’s insistence in 2015 and 2016 that the nominally apolitical Enquirer endorse his long-time friend Donald Trump for president and trash Trump’s campaign opponents—the first such endorsement in the supermarket tabloid’s 68-year history since Generoso Pope Jr. became the owner—didn’t help.

Nor did the Enquirer’s February 2019 dust-up with Amazon billionaire Jeff Bezos—one of Trump’s designated enemies as the owner of The Washington Post—after Bezos publicly accused then-AMI executive Dylan Howard of blackmail and threatening to publish intimate photos of his genitals. In an essay for Medium, titled “How David Pecker Ruined the National Enquirer,” former Enquirer staffer Tony Brenna wrote: “It turns my stomach, daily seeing Pecker’s face grinning moronically from the TV screen as reporters expose his journalistic corruption.” 

“You’re nuts to take a political position because you’re basically alienating half your audience,” Calder said, insisting that he was making a general observation about the Enquirer’s readership—which included men and especially women of all persuasions, notably a readership that was disproportionately African-American—and not specifically criticizing Pecker. “If you want to think about a number of things about insanity, that’s insanity. We would never ever have wanted to appear pro-Democrat or pro-Republican. It made no sense to us.”

Under “Gene” Pope, who died in 1988, “if one of our daughters had married a guy who was running for president, nobody buying the Enquirer would have known whose side we were on,” Calder added.

Enquirer veteran Steve Coz, Calder’s successor as editor-in-chief until he and Pecker had a falling-out in 2003, is perfectly happy to slam his former boss, especially for weaponizing the flagship tabloid and various other AMI publications in the service of Trump’s political and personal interests.

“Can the Enquirer survive? My answer to that is no, because they betrayed the readers,” Coz told The Daily Beast. “The Enquirer had the largest emotional bond to its readers. We got so much mail that the Post Office gave us our own zip code. We had readers that loved the publication, that were incredibly loyal to the publication, and when Pecker did this pro-Trump, bash-Hillary thing for a full year, all those readers felt betrayed.”

Coz added: “So you watched the circulation start diving, and there’s no way to get those readers back.”

Documentary filmmaker Mark Landsman, the director of Scandalous: The Untold Story of the National Enquirer—which is making its television debut Sunday night on CNN—told The Daily Beast: “What we’re seeing now, the death spiral of AMI, is kind of in its DNA. The Enquirer positioned itself as a master manipulator really from its inception, and as a result was brokering really nefarious deals in the entertainment industry for a long time”—a pursuit that ultimately extended to politics, as Landman’s movie details.

Pecker’s adventure in pro-Trump politics definitely has had its down side. Pecker and his now-ousted deputy, Australian import Dylan Howard, ended up under federal investigation for their role in paying $150,000 in alleged hush money to a former Playboy model who’d claimed to have had a long-term extramarital affair in 2006 with the future president.

Pecker and Howard worked closely with Trump fixer (now convicted felon) Michael Cohen to cover up for the then-candidate’s alleged sexual indiscretions. In 2018 Pecker and Howard struck an immunity deal with prosecutors in exchange for their cooperation in their investigation of Cohen’s criminal violation of campaign finance laws and Trump’s alleged role in the crimes.

In a June 2017 New Yorker profile, Pecker was shameless about his fealty to Trump, noting to writer Jeffrey Toobin that when he paid ex-Playboy model Karen McDougal, ostensibly to be a columnist for AMI’s lifestyle titles, he imposed an important condition: “Once she’s part of the company, then on the outside she can’t be bashing Trump and American Media.”

Toobin writes: “I pointed out that bashing Trump was not the same as bashing American Media. ‘To me it is,’ Pecker replied. ‘The guy’s a personal friend of mine.’”

Peter Kreisky, for his part, recalled having a friendly lunch with Pecker a few years ago. “He’s had a singular lack of success with upscale luxury advertisers,” Kreisky said. “He told me, ‘Can you help me? I just don’t understand why up-market advertisers don’t want to advertise in our titles.’ I couldn’t believe he was saying that. But he’s very Trump-like and believes whatever he says is true. And if it isn’t true now, if he asserts it strongly enough, it will be true.”

Even before the global coronavirus pandemic severely damaged the media biz in general—and has been especially destructive to newsprint-dependent enterprises like AMI—the privately-held company had been struggling through changes of ownership and ensuing cost-cutting, forced debt restructurings, a bankruptcy, expensive acquisitions and difficult divestments. AMI’s publication in 2018 of a glossy 102-page magazine to celebrate Saudi Crown Prince Mohammed bin Salman—an apparent bid for Saudi investments—by most accounts didn’t shake loose any cash.

Late last year—according to sources—AMI was unable to pay its seven-figure printing bill, and was saved only when the company’s 80-percent majority owner, the Chatham Asset Management hedge fund, reluctantly advanced the money. (Chatham spokesman Jonathan Gasthalter didn’t respond to multiple requests from The Daily Beast.)

In the 1970s and 1980s, when Iain Calder was running the Enquirer under Pope’s watchful and demanding eye, he had a virtually unlimited editorial budget to pay more than 60 newsroom staffers and hundreds of spies and Hollywood sources; the tabloid, which spent $30 million a year on television advertising alone (“Enquiring minds want to know,” was the famous tagline), boasted a paid newsstand circulation of 4.5 million.

The decline since then has been breathtaking.

The average of single copy sales for the second half of 2019 was a distressingly anemic 118,228, according to the Alliance for Audited Media. Indeed, the Enquirer’s glory days—and those of other AMI tabloid titles such as Star and Globe and the company’s gossip, celeb and entertainment weeklies such as In Touch, Ok! and Us—are long gone.

AMI’s pre-pandemic circulation performance has been, at best, alarming—marginally worse than the industry as a whole. According to a person who closely follows AMI’s ebbs and flows, circulation figures from the second half of 2018, compared to the same period for 2019, showed a 28.4 drop overall suffered by the company’s titles. Us Weekly plunged 28 percent; In Touch, 34 percent; the Enquirer 24 percent;  Star, 24 percent; Globe, 24 percent; Life & Style, 35 percent; and OK! Weekly, 27 percent. A knowledgeable AMI source didn’t dispute these numbers.

On a Saturday in late March, Pecker sent a staff-wide email to AMI employees announcing that their salaries were being slashed by 23 percent across the board. Since April 1, when the pay cuts went into effect, many employees have been struggling to pay rent and even put food on the table for their families.

Multiple staffers told The Daily Beast that they fear layoffs could soon hit AMI, which is still awaiting an emergency $5 million to $6 million Payroll Protection Program loan from the Trump administration, and that there is heightened talk internally of consolidating the staffs of different publications to save money. Employees complain that management isn’t telling them what is actually going on.

One employee said they had hired a lawyer ahead of an expected “reckoning” that would involve staffers being fired and “screwed” on severance pay.

“When it comes to Pecker and money and how he treats staff it’s the wild, wild west,” the long-time staffer said. “So I hired an attorney to protect myself.” This person said other AMI colleagues were also seeking legal advice after AMI suddenly altered the terms of severance for employees of Men’s Journal—which moved operations to California, reduced its frequency from 10 to six times a year, and laid off the entire East Coast staff, around 20 employees. Instead of receiving two weeks’ pay for every year of service—the expected arrangement—AMI reduced the severance package to one week’s pay per year.

In his late-March email to AMI’s staff, Pecker claimed: “I have made significant decreases to my compensation since January when the first signs of the crisis began, and we have made many other concessions since then.”

“What exactly did David sacrifice weeks ago on his pay package?” Steve Coz mused, recalling an incident in October 2001 after the anthrax attack that killed photo editor Bob Stevens and forced the staff to evacuate Pecker’s refurbished headquarters building in Boca Raton.

“Because I remember when the anthrax hit—and it pisses me off to this day—we were all stuffed into this giant garage, we’re at tables, everyone bumping elbows, and he pulls up in a brand spanking new BMW convertible Z-8, the really expensive one. And he comes in and goes, ‘Hey guys, do you wanna see my new car?’”

Pecker declined an interview request from The Daily Beast.

“Mr. Pecker and his executive team have worked tirelessly in an effort to avoid laying off any staff during this time,” an AMI spokesperson responded to Coz. “Mr. Pecker has reduced his compensation materially and executives at the company have taken significant cuts to avoid layoffs and ensure that all staff maintains more than 70 percent of their salary and their full health benefits during this crisis. Mr. Pecker remains committed to the health and safety of his staff as he did during previous crises including the anthrax attack and Hurricane Sandy.”

Apparently Pecker’s concern for his employees’ wellbeing is not universally accepted as gospel within AMI. Pecker, a collector of luxury cars, famously ordered the installation of a surveillance camera aimed at his parking space in the company garage after he’d discovered that his vintage black Corvette had been keyed—presumably by a disgruntled underling.

Pecker’s philosophy of tabloid journalism and his disdain for readers—which he distilled to the New Yorker’s Toobin during a discussion of why readers enjoyed the Enquirer’s coverage of Tiger Woods’ scandalous downfall—seems, with the benefit of hindsight, to apply ironically to himself.

“Do they care about Tiger Woods? No,” Pecker told Toobin. “Do they play golf? No. But do they want to read about his indiscretions? Yes. Do they want to read that someone who is that successful is now failing? Yes. These are people that live their life failing, so they want to read negative things about people who have gone up and then come down.”