When I was seated on his couch I asked, "Where do you get your cigars?"
"Mostly from Davidoff," he said, "but after the last couple of days I have enough cigars to last me for a year."
During those "last couple of days" Mr. Pecker had resigned as president-CEO of Hachette Filipacchi Magazines and with a couple of moneyed partners was buying the company that operates the two largest supermarket tabloids in the country, the near-legendary National Enquirer and the 25-year-old Rupert Murdoch creation, Star, for $300 million in cash and the assumption of another $467 million in debt, mainly to bondholders and banks. The bondholders, he said, will have their bonds called in and paid off.
"I made a speech to the editors and publishers and resigned. Daniel [Filipacchi] came over and said, 'This is my friend.' I heard from John Kennedy (who runs George for the company), and we had lunch. This is a very emotional experience for me at 47 years of age. I have great partners (financial whiz and former Treasury Department aide Roger Altman and Austin Beutner, founder of Evercore Capital Partners, the entity buying American Media, parent of the tabs) but it's wonderful to be a builder again. We have plans to acquire some newsstand titles already out there. They have a huge distribution company with 2,000 employees and we want to build on that. And to start other magazines."
But why bail out of a classy operation like HF (Elle, George, Premiere. Mirabella, Woman's Day and the like) to run a couple of downmarket tabloids, which, despite huge circulations, have never generated much quality advertising?
"Despite turndowns [the two tabloids are] still selling a combined 4.2 million copies a week," said David. "And with a readership of 20 million loyal readers, almost fanatically so. Eighty-five percent of the revenue comes from newsstands and subs and 15 percent from ads, with half of that direct mail."
So will he go upmarket with one or both?
"Steve Coz (who heads the Enquirer) has positioned National Enquirer with more hard news and more middle of the market already. He's a Harvard man and hired a lot of young editors from The Washington Post. You ought to see that operation (in Lantana, Fla.)
"Others think of the Star [going] a little softer. Or keeping the Star just where it is and coming out with a different magazine [something like Time Inc.'s InStyle?]. Anything is possible."
Then, with a laugh, "you know the difference between the tabloids and more mainstream American papers? The tabloids pay their stringers."
STAR MOVING TO MANHATTAN
Back to his plans and referring to Star as their "celebrity magazine" of the two, he will move its editorial operations from suburban Tarrytown into Manhattan, probably to share Madison Avenue offices with its ad operations. Pecker himself will relocate to Florida, spending seven months there and five in New York. "I bought a home in Palm Beach just over a year ago and it's about a half-hour drive to Lantana." His wife's family (no children) lives in Boca Raton and Miami, and she's all for the move.
The American Media folks, he said, "are not marketers. They didn't give Tony (Hoyt, former Cosmopolitan publisher) the tools to bring in the advertising. No editorial research, no MRI research. We're keeping Tony and we're giving him what he needs to do the job."
Since in 1974 I'd myself been editor of the National Star under Rupert Murdoch, David asked my take on the Fleet Street and Sydney buccaneers running it then and to an extent, still. So we swapped tales. He'd just met some of them for the first time up at Tarrytown: "Roger Wood (longtime confidant to Murdoch who will stay on), Mike Nevard, Phil Bunton, Richard Kaplan. That's some bunch. Afterwards we went to a bar and everyone told stories of Steve Dunleavy (the colorful Aussie now at the New York Post)."
While others may think of the Enquirer and Star as a corporate monolith, clearly Pecker understands there are two disparate cultures at work here, Harvard and the pubs.
We talked of his own past, when he was derided as a mere numbers cruncher by such as Steve Florio of Conde Nast Publications (these days Steve, the president-CEO, is not only cordial but respectful). How did he turn into this hotshot marketer? "In the late '80s as [chief financial officer], I was also responsible for the national sales network (of what was then CBS Magazines), and it was the worst of the worst, where you were sent instead of being terminated. But on the radio side, national sales was manned by the elite. In '89 (when the French took over), Hachette was not very popular here. I went to Daniel (Filipacchi) and said we've got to let our salespeople make decisions and close the deal on the sales call without calling back to check. Take the money right off the table.
'A BIG PARADIGM SHIFT'
"We put in a creative unit, a sales unit. I went to see Phil Guarascio [VP-general manager, marketing and advertising for North America Operations of general Motors Corp.] and Michael Browner [GM executive director-media operations, marketing and advertising]. I said, 'Tell me how to create a unit. What do I do?' Phil said, 'It has to be friendly to the advertiser.' We started with GM, then Ford, Chrysler, Philip Morris. A big paradigm shift, you have to spend money to make money. I knew nothing about fashion, about automotive. There are causes you have to support, you have to become socially involved.
"Sony called. They loved the way Elle looked. Could we publish a magazine for them? That launched our custom publishing division. Now it does $30 million."A soon-to-be-launched Enquirer daily TV show conjured up before he came on board? "Definitely a go. They've got clearances right across the country."
The words, the figures tumble out. I don't think you can fake enthusiasm, the riverboat gambler's mustashioed grin. So naturally I inquired, "Was George a mistake?"
"No. It's had its ups and downs. We have a five-year plan and with a couple years to go, we still have $14 million unspent." Will John Kennedy stay on? "Yes, he will."
What of that stink three years ago at Premiere when he killed a story critical of Planet Hollywood because Ron Perelman, then a half-owner of the mag, was a Planet investor, and the top editors walked? "Now that I look back, I think the way that I handled that was a mistake," he said.
The things he's most proud of? Elle and its spinoff Elle Decor are clearly among them. "Elle was 500 [ad] pages behind Harper's Bazaar. Now it's 600 pages ahead. Carl Portale was a great pickup."
As we spoke, "Gerard (de Roquemaurel, the big noise from Paris) is here interviewing the inside candidates and the outside candidates (to succeed David as boss). I'm confident they'll have someone in place by the time I leave (end of March)."
He sure looked pretty confident in his navy pinstripes, white shirt, yellow power tie, heavy gold cufflinks, black loafers and black socks just short enough to show an inch of shin. You run a big company and then buy another, you're entitled to be a little cocky; you aren't bashful about showing a little shin.