The Florida-based American Media Inc., which owns the National Enquirer, announced plans to file for Chapter 11 bankruptcy in the next two weeks.
On Nov. 1 the media company, which also owns such publications as Star, Fit Pregnancy, Shape and Men’s Fitness, announced its plans to file for federal bankruptcy protection, however, no specifics to the company’s finances were disclosed.
According to sources, if American Media files the company will certainly not be alone as more than a dozen U.S. newspaper and magazine publishers have filed for bankruptcy since 2008. The blame for the downfall of print publications is being placed somewhere between struggling through a recession and trying to adapt to new technologies, which have taken readers and advertisers away from paid print advertisements and subscriptions to cheaper or even free ones on the internet.
Circulation is also down for American Media, as the company’s Web site claims to have had a circulation of 7.5 million magazines in 2008, which in 2010 is now down to 6.8 million.
And, according to a recent article in the Los Angeles Times, with so many other celebrity gossip publications like People and US Weekly, the National Enquirer finds itself constantly tracking Web sites like Time Warner’s TMZ.com, which often has breaking news about celebrities.
According to the Los Angeles Times, American Media said the goal is to get most of the company’s creditors to back its reorganization plan before the Chapter 11 filing.
The company reports, this reorganization plan would wipe out most of the company’s debt in exchange for the bondholders receiving ownership of the company. So far, about 80 percent of the American Media bondholders have shown support for the plan.
Source: The Los Angeles Times, “National Enquirer’s owner to file for bankruptcy,” 1 Nov 2010