POTUS Allies Dave Pecker and Leon Cooperman team up with Trump’s social media “guru” to run the world’s largest tabloid — with the help of a mystery $500 million investment

- 2013 — American Media Inc. (AMI) — a failing tabloid print publisher — nears bankruptcy amid mounting debt obligations

- 2014 — Chatham Asset Management invests over $500 million in nearly twice bankrupt AMI

- 2014 — Billionaire investor and Trump ally Leon Cooperman joins as an investor

- 2014–2016 — AMI pays off all existing bondholders, and becomes sole holder of 100% of its own debt — ceases reporting to the SEC just months before the 2016 Presidential Election

- 2017 — Trump Social Media “Guru” Justin McConney joins AMI — McConney is credited with Trump’s grassroots social media strategy (he has since left)

It’s been a rough couple decades for print media. From 2000–2015, print ad revenue fell from $60 billion to $20 billion — down 15% at Gannett and 16% at McClatchy according to Politico. “The collapse of advertising is across the board, affecting just about every broadsheet and tabloid,” but apparently there is always an exception to the rule.

The year is 2013, and American Media Inc. (AMI) had their backs against the wall. AMI is ran by Trump ally and tabloid CEO Dave Pecker — who has been in the news lately regarding his National Enquirer’s coverage of Trump. In addition to the shrinking print ad business, AMI was carrying a massive debt load for an operation of its size — and they were losing tens of millions of dollars. The company publishes some of the popular tabloids you see at the supermarket every day — and maybe skim through — but rarely purchase. Titles include National Enquirer, Us Weekly, Star and others.

According to SEC filings, as of March 31, 2013, AMI had a debt load of over $500 million — paying annual interest expense of almost $60 million. In 2013, the company lost over $56 million — in line with results of the industry. Fast forward to February 24, 2014 — AMI released an investor presentation “to use…in connection with presentations to investors”. That’s typically a negative sign for investors, bond holders, and analysts. The slides reveal a struggling print business in a digital world. Unfortunately for AMI, only 7% of their revenues came from the internet — which is a problem for a company operating in 2014.

In the following months, several AMI board members resigned — as the company looked for a solution to their financial woes. American Media Inc.’s problems came to a head on May 28, 2014 (SEC filing from June 3, 2014) when they announced that their print primary distributor had decided to cease sending to a major wholesaler — which represented 14% of total revenues-due to non-payment of bills. This is especially detrimental to a company that generates 93% of their revenue from print ads and sales — and already had extremely strained cash flows. They expected this to cause a $5-$10 million decrease in cash flows. Actual decreases were closer to $15-$20 million. The company likely would run out of cash within the quarter.

Then everything changed. By July 3, 2014, American Media Inc. had a merger offer on the table — and by July 15, 2014 they had entered into a Material Definitive Agreement to “merge” (press release used “merge” — the investors purchased 100% of company). Again, this is a very peculiar transaction in the finance world given the size of the investment — over $500 million — as well as the speed at which AMI was able to find an investor that would solve all of their problems. In just over one month’s time, the company went from being ready to close the doors to receiving half a billion dollars in a fresh capital injection — a huge red flag.

The official merger announcement came on August 15, 2014 — whereas Chatham Asset Management, LLC and Omega Charitable Partnership, LLC (the “Investors”) purchased 100% of the company. Omega is owned by billionaire investor Leon Cooperman — a close Trump ally that dines at the White House. The press release discloses a $2 million purchase price “to be paid for AMI’s common stock” — and mentions that the “Investors” would assume the $513 million in debt. The debt piece is key — as it was held by multiple investors through Notes that had been issued over the years. The investor group, led by Chatham owning about 90% -purchased all of the outstanding debt between 2014 and 2016 — thus eliminating the need to disclose financials to the SEC. The new capital structure also gave the impression that the purchase price was only $2 million — while leaving hundreds of millions in debt on the balance sheet. The trick is that the “Investors” also own the debt — so essentially they owed themselves $500 million. The “investors” also repurchased the outstanding debt over time — which gives the impression that there are several small transactions — instead of one large transaction for over $500 million. To put this in perspective, Jeff Bezos spent $250 on the Washington Post.

Let’s take a step back and recap — someone invested over half a billion dollars in print media, specifically tabloid print media, at a time when newspapers were closing left and right.

The new ownership includes majority investor Chatham Wealth Management — and minority shareholders Leon Cooperman and Dave Pecker. Chatham is run by Anthony Melchiorre who has a history of working with Cooperman — but the source of the funds is unknown.

AMI’s final SEC filing comes on August 26, 2016 — announcing that the “Investors” had acquired all of the outstanding Notes — bringing their total investment to well over $500 million. This would be the last SEC filing — as they would no longer be required to disclose their financials. The filing comes just over 2 months before the presidential election

Leon Cooperman and Dave Pecker’s involvement (both Trump allies) can be considered a coincidence — but things get even more complex. In the October 2017, Trump Campaign “Director of New Media” Justin McConney joined AMI’s team as “Audience Development Director”. McConney is attributed to managing Trump’s social media dating back to 2011 with the Trump Organization. He is touted as the mastermind behind the grassroots Trump social media ad campaign. Former Trumer adviser Sam Nunberg praised Mcconney in a 2016 Fortune article, saying he “has his ear to the social media world, and he’s ahead of the curve” and that he is “innovative, well-connected and always thinking about how to push the envelope.” McConney was in charge of all of Trump’s content creation — and AMI is a content creation company — so a logical step.

In an October 26, 2017 AMI Press Release — right around the time McConney joined the company — AMI announced Dylan Howard as Chief Content Officer — which coincided with James Heidenry leaving the company. Weeks later, Heidenry became Editor of In Touch and broke the Stormy Daniels story. This shake up in content leadership — and new push of Pro-Trump articles raises questions surrounding AMI’s financial motives and business strategy going forward. It is also important to note that McConney’s father — Jeffrey McConney — has been the controller at the Trump Organization for nearly 3 decades. Justin McConney is no longer with AMI.

The question remains, what content is AMI publishing. Since their financials are no longer public, it is hard to tell. I reviewed www.nationalenquirer.com (AMI went digital) — one of AMI’s more popular publications that has gained attention for their glowing coverage of the President. I took a deeper dive into the Enquirer’s website. The company uses Godaddy.com as registrar (manages and maintains domains) — which is typically used by “do it yourself” web developers with a modest budget. Corporations typically use a registrar such as Network Solutions, which is more costly — but also more complex. It would be very strange to utilize something like godaddy.com for an entity that recently had over $500 million dollars invested.

While I acknowledge the full story is still unknown, there are a lot of signs that point to American Media Inc. and Justin McConney being involved in the publication and promotion of click-bait content — meant to flood social media and overwhelm the voting public. This content is all about volume, rather than quality — very similar to tactics bots are taking online to rapidly promote political material.

While not specifically promoting AMI’s “brand companies”, online bots are pushing divisive, conservative websites — in an attempt to drown out real opinions. For example, the bots’ favorite site to promote is TruePundit.com — with nearly 3x the online mentions of any other site across 1,500 bot accounts monitored by Botcheck.me. TruePundit.com is constructed very similarly to many of AMI’s websites and follows a similar promotion model — and even uses GoDaddy.com as registrar.

Whether their intention or not, AMI — led byDave Pecker and Justin McConney and backed by investor Leon Cooperman — has created a content machine that is producing more pro-Trump and conservative content by the day. The question remains- who is the mystery investor behind the $500 million that saved the company.