American Media IPO will fatten Fuller's paycheck

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Forget the $1 million-plus package-the real payday for Bonnie Fuller at American Media will come when Chairman-CEO David Pecker realizes his ambition to take the company public.

"My goal, in the next 18 to 24 months" is to take American Media public, Mr. Pecker said. As such, Ms. Fuller's upside as exec VP-chief editorial officer is the potential for a considerable compensation big-bang at that point. That would come atop a current package that an executive familiar with it said entailed over $1 million in salary, an equity stake in American Media and incentives for hitting certain targets. (A person close to Ms. Fuller said with the targets she hit at Us Weekly, her total compensation was around $2 million.)

Ms. Fuller, Advertising Age's Editor of the Year in 2002, was en route to a vacation celebrating her 20th wedding anniversary and did not respond to messages left at her home. She informed Jann Wenner, chairman of Wenner Media, of her departure at a June 24 meeting. Mr. Wenner characterized his reaction as "surprise. And I got pissed off."

Mr. Wenner, not Ms. Fuller, informed Us Weekly staffers of her departure, persons familiar with the situation said. "We had what I thought was a binding agreement," Mr. Wenner said. "It's for the lawyers to discuss." (Mr. Pecker said Ms. Fuller told him her contract expired in March.)

Ms. Fuller's departure means Wenner loses the lead architect of Us Weekly's success. She created a new, sugar-buzz take on a celebrity magazine and made newsstand sales soar. (She also put herself back on the magazine world A-list after a clouded-over exit from Conde Nast Publications' Glamour in May 2001.)

Kent Brownridge, Wenner's general manager, said the company would file figures with Audit Bureau of Circulations showing circulation at around 1,150,000 for the first half of 2003, with newsstand sales around 506,000. That would make for a 7.9% overall gain and a 24.7% newsstand leap-in a period when publishing executives are bracing for widespread weakness in newsstand sales, no less. In the comparable period prior to Ms. Fuller's arrival, Us's newsstand sales were 311,691.

sales erosion

At American Media, Ms. Fuller is in a position to leverage her unquestioned strengths at making newsstand sales pop for the company's tabloids, National Enquirer and The Star, which have seen serious circulation erosion.

Despite American Media's $350 million acquisition of Weider Publications last November, the tabloids make up the biggest single source of revenue in the company's $600 million portfolio, and executives familiar with the deal market said showing good news for the tabloids will be crucial in attracting investment bankers' (and investors') support. (An executive familiar with American Media's financials said the company was tracking to post around $182 million in earnings before interest, taxes, depreciation and amortization on revenue of around $600 million this year.)

business-side equivalent

For his part, Mr. Pecker said he needs to get the company to $1 billion in revenue before taking it public.

"I feel we are one or two [acquisitions] away," he said. Ms. Fuller, he added, would be involved in reviewing potential acquisitions in her new role.

Mr. Pecker also said that he now seeks a business-side equivalent to Ms. Fuller to oversee all publishing and ad-sales efforts.

American Media has made more moves toward expansion after winning Weider, organizing a division to oversee Spanish-language media earlier this year and recapitalizing the company in a move that Mr. Pecker said freed up $1 billion for acquisitions.

The short list for Ms. Fuller's replacement at Us Weekly essentially contains one name: Janice Min, who's worked closely with Ms. Fuller as her executive editor.

Ms. Min cut short her vacation in Italy and was flying back to the U.S. at press time and could not be reached, but it's expected she will be named as Ms. Fuller's successor. A Wenner spokesman declined to comment on Ms. Min's status. (Read more: QwikFIND aao81a)

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