The latest guessing game in the publishing world is trying to figure out the source of Jimmy Cohen’s funding to buy the troubled National Enquirer, and two smaller sister titles, the Globe and the National Examiner, from American Media for $100 million.
“This deal does not feel like a real transaction,” said one industry veteran. “It feels like a ‘parked’ transaction” in which Cohen takes over the company as a favor to his pal, AMI chief David Pecker.
Another executive familiar with American Media said he suspected that Chatham Asset Management was somehow involved in arranging the financing.
Chathman boss Anthony Melchiore was said to be upset by the reporting techniques that was behind the feud between the Enquirer and Amazon boss Jeff Bezos.
Bezos infamously accused the tabloid of a blackmail scheme over his affair with Lauren Sanchez following their Jan. 9 publication of the alleged infidelities — and the threat to publish even more salacious photos.
The Washington Post reported on April 18 that Cohen agreed to buy the tabloids. But few believe Cohen will fund the deal himself.
“Nobody knows the newsstand market better than Jimmy Cohen,” offered one executive. “There’ s no way he’s putting his own money in.”
Cohen’s wealth comes from selling the retail portion of Hudson News kiosks to a hedge fund that controlled the duty-free shop operation Dufry.
He kept the delivery portion of the Hudson News wholesale operation that gets periodicals from printers to retailers and remains its CEO.
Chatham owns 80 percent of the American Media equity and is also a lender who helped arrange a refinancing of some $425 million in long-term debt for Pecker.
American Media had said earlier that it planned to use the $100 million it expects to receive to cut its debt to $325 million — which would mean Chatham would likely benefit by early payment on its loan.
In addition, Cohen said he would pay American Media to manage a lot of the back shop operations even after a sale.
“From the outside it looks like the whole thing could be a big circle,” said one source familiar with previous AMI deals.
Officials from Chatham did not return calls. American Media declined to comment.
Cohen texted: “Financing is fully in place and is not an issue, but is all under a confidentiality agreement and therefore equity/debt issues cannot be discussed or disclosed.”