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Kelly: Pecker Under Tremendous Pressure To Produce Profits

Keith Kelly, who reports for the New York Post on the city's publishing industry, says this week that America Media Inc. president David Pecker is under renewed pressure to produce profits.  With the addition of two new members to the company's board of directors--both from equity investors in AMI--Pecker's high-profile management style will come under greater scrutiny, as will his company's financials.  Kelly lays out a series of problems that confront AMI at this time: Celebrity Living, its newest weekly, is not exactly kicking butt; The Star, the company's flagship publication, has produced a disappointing string of "embarrassing" covers; and the company's editorial director, Bonnie Fuller, has not yet signed a contract extension, perhaps because she's been busy promoting her new book, The Joys of Much Too Much.  Worse, according to Kelly, is that AMI is under a tremendous financial burden, and it needs to keep the cash incoming: "Under a deal reached March 17, AMI had to pay bondholders $5.5 million within [several] days, according to a filing with the Securities and Exchange Commission. AMI has $550 million in bonds outstanding, and a total debt load of $1 billion. AMI will also have to meet tighter cash flow debt ratios, and begin lowering its cash flow to debt ratio over the next two years. If it fails to do so, it will incur penalties over $15 million." Observers of the AMI saga will be watching carefully to see if Pecker--widely regarded as a tough leader but smart newsstand guy--can pull this one out of the fire.




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