Cash-strapped American Media Inc., which, under chief executive David Pecker, armed the National applicant to serve Donald Trump’s presidential campaign, then admitted violating federal campaign laws by paying $150,000 in hush money to alleged Trump mistress, applies for taxpayer-backed Paycheck Protection Program loan .
The company on Tuesday declined to disclose the amount of the loan request, but a knowledgeable media industry source told The Daily Beast that AMI had its hand for between $5 million and $6 million in government money, much of which can be forgiven under the emergency PPP legislation if the company maintains its current payroll for at least eight weeks.
“American Media has made the decision to seek PPP support in an effort to secure hundreds of jobs that could have been lost as we and other publishers continue to navigate the current economic climate created by the Covid-19 pandemic. 19,” AMI said in a statement. to The Daily Beast.
In addition to refusing to disclose the amount of money it is requesting, AMI also declined to identify the corporate bank that is applying for the PPP loan from the Small Business Administration on the company’s behalf. A person familiar with the situation said AMI Banks along with JP Morgan Chase, which is a major tenant in the same downtown Manhattan office building as the tabloid publisher, along with Citibank and Bank of America.
The PPP loan request sparked outrage among several AMI employees.
“If they get the money, they should be called to the mat,” an AMI staffer told The Daily Beast, requesting anonymity for fear of reprisal.
“Their courage is breathtaking. It’s not fair — they would take money away from a small business that really needs it. It doesn’t surprise me that Pecker is trying this because he’s desperate, but getting money from the government and Trump after all they’ve done is sickening.
This person noted how Pecker repeatedly tried to secure money for his struggling empire from Saudi Crown Prince Mohammad bin Salman and the Saudi regime, even trying to curry favor – and funding – by producing a 102-page special publication entitled The New Empire timed for MBS’ 2018 US tour. The glossy magazine special was widely seen as flattering propaganda to entice the Saudi leader – who would later be implicated in the murder of journalist Jamal Khashoggi – to dip into his deep pockets and pour into AMI.
It did not work.
“We are not a small company,” another AMI staffer told The Daily Beast. “I don’t see how we qualify for this. People are currently working harder for less money and there is a lot of anger towards Pecker. The atmosphere is gloomy. »
News of the AMI’s plea for help comes just over a month after Pecker informed the company’s roughly 450 employees – which, because there are fewer than 500, qualifies the company for a PPP loan – that it reduced their pay across the board by 23 percent. The drastic cut came as AMI was already facing potential bankruptcy as it entered what was expected to be a disastrous 2020 financial year, and left many staff deeply concerned about their finances and their ability to pay their rent and food expenses.
In the email to all of Pecker’s staff, launched without warning on a Saturday in March, he claimed he too was taking an unspecified chunk of his estimated seven-figure compensation package.
At the time, several AMI veterans said Pecker’s email boded ill for a media company apparently on life support from its majority owner, hedge fund Chatham Asset Management. A sale ordered by Chatham of the National applicant for $100 million to Hudson News mogul Jimmy Cohen — announced to much fanfare over a year ago — still hasn’t closed, and media industry watchers now doubt that’s the case.
Jonathan Gasthalter, a Chatham spokesman, did not respond to repeated requests for comment.
“It’s on a Fan”, former Applicant editor Steve Coz said of the company that his former boss, Pecker, was cutting employee salaries.
Pecker’s right-hand man and loyal lieutenant, Dylan Howard, was ousted from the company at the end of March, ending a tumultuous era where the hot-headed Australian found himself embroiled in silent money deals and a agreed to an immunity deal with Pecker to avoid the feds. Southern District of New York lawsuits.
In a deal brokered by Trump’s attorney at the time, convicted felon Michael Cohen, shortly before the 2016 presidential election, AMI paid $150,000 in a “catch and put” deal. to death” with the former Playboy her playmate Karen McDougal, who claimed to have had a long-term extramarital affair with then-candidate Trump and signed a limited lifetime rights agreement giving AMI sole ownership of any relationship she ever has had with a “then-married man”. The publication never ran her story, and McDougal later sued to be released from the deal and the case was settled, releasing McDougal from the contract.
Howard, who depended on AMI for his green card, was also accused by Jeff Bezos of blackmail and helped collect information on victims of Harvey Weinstein’s sexual assaults.
The celebrity-focused tabloid society, whose gossip posts also include American weekly, In touchthe Worldthe Star, OKAY! Magazine, Closerand Way of life— suffered significant losses in ad revenue during the COVID-19 pandemic, and newsstand sales fell to near zero.
Employees were privately furious at the company’s decision to cut wages for all employees. While other media executives have lost pay or taken bigger pay cuts than their lower-paid staff, AMI has implemented a percentage pay cut affecting all staff. As The Daily Beast first reported last month, Pecker cut employee pay by 23% as his already precarious financial situation became more serious due to the coronavirus outbreak.
AMI is one of many US media companies to apply for government small business loans in recent months. Local newspapers including Seattle weather as well as digital media companies, including Bustle Digital Group, have successfully applied for and obtained PPP loans.
Venture capital-backed political and financial site Axios announced last month that it had received a multimillion-dollar PPP loan. While the company initially defended its decision to apply for the loan despite possible ethical issues and a lack of funds for other small businesses, the publication backtracked after a week, saying it would return the money.
“The program has become divisive, morphing into a public debate about the value of specific industries or companies,” founder Jim VandeHei wrote on the site. “While applying for the loan seemed like the right and prudent thing to do a month ago to protect our 190 employees, if we knew then what we know now, we would have dumped it and hoped for the best.”