American Media Inc. (AMI), The National Enquirer’s parent company, has been suffering “ballooning debt, falling revenue and shrinking newsstand sales at its print magazines,” a Wall Street Journal report revealed on Thursday. However, that financial hardship didn’t affect its ability to pay alleged hush-money to individuals who reportedly had damaging information about President Trump.
According to the report, which cited “nonpublic AMI financial reports,” AMI experienced a decline of 9 percent from fiscal year 2016 to 2017, and a drop of 29 percent from 2014.
“Acquisitions of Us Weekly and Men’s Journal in 2017 helped increase revenue in the first three quarters of fiscal 2018 to $195.5 million, from $154 million in the year-earlier period, but they also added over $100 million in debt,” the report stated.
None of that has stopped AMI or The National Enquirer from making payments that effectively amounted to hush money, to keep at least two separate individuals from going public with information damaging to Trump, who is close friends with AMI CEO David Pecker and received the Enquirer’s endorsement during the 2016 election.
In August 2016, former Playboy model Karen McDougal received $150,000 from AMI for exclusive rights to her story about an affair she claims to have had with Trump from 2006 to 2007. The contract also prevented McDougal from speaking publicly about the alleged affair. The media company later claimed it had paid McDougal for a series of “fitness columns and magazine covers” and not for her account of the alleged affair.
AMI eventually spiked McDougal’s story, employing what is referred to in the publishing industry as “catch and kill,” a practice in which a publication purchases exclusive rights to a story and then buries it intentionally. AMI has routinely denied engaging in such practices.
The former model later claimed that she was misled about the nature of her contract with AMI and sued the company, arguing that her lawyer at the time, Keith Davidson, was more interested in serving the needs of Trump and his longtime attorney Michael Cohen — who was kept in the loop throughout AMI’s negotiations with McDougal — than her own. (Davidson also represented another woman who claims to have had a sexual relationship with Trump in 2006, adult film actress Stormy Daniels, and helped broker a deal between Cohen and Daniels for $130,000, weeks before the 2016 election. It prevented Daniels from speaking publicly about her alleged affair with Trump.)
On Wednesday, AMI settled with McDougal, allowing her to speak freely about her alleged 10-month long affair with Trump.
“[This settlement] restores to me the rights to my life story and frees me from this contract that I was misled into signing nearly two years ago,” McDougal said in a statement this week.
The settlement reportedly allows McDougal to retain the $150,000 she was paid in 2016. However, it also gives AMI “the rights to up to $75,000 for any future profits from her story about the relationship,” as well as “the rights to photographs of McDougal that it already has,” the Associated Press reported, meaning it may end up making money off of the former model’s account in the future, despite allegedly canning the story.
On April 12, the Associated Press also reported that a former doorman at one of Trump’s New York properties had signed a contract with the Enquirer at the end of 2015 — the height of the Republican presidential primary — to sell a story about an alleged affair between Trump and his former housekeeper at Trump World Tower, which produced a child. The doorman, Dino Sajudin, received $30,000 to sign over the rights, “in perpetuity,” to his story, which, like McDougal’s, never ran.
Sajudin was finally released from his contract with AMI in 2016 — after Trump had already won the presidential election.
AMI executive Dylan Howard, who currently serves as the chief content officer at the Enquirer, later claimed in an interview with Radar Online — which is also owned by AMI — that the Enquirer had decided not to move forward with Sajudin’s story because it lacked merit.
“Dino Sajudin is one fish that swam away,” Howard claimed, insisting the story would have sold “hundreds of thousands” of magazines.