Source Interlink, American Media set licensing deal for Soap Opera Weekly, other titles

Source Interlink is shedding staff and turning its struggling soap opera titles, along with a handful of other magazines, to American Media Inc.

Soap Opera Weekly, Soap Opera Digest, young teen title Pixie and supermarket puzzle books will be taken over and produced by AMI under a licensing agreement. No upfront cash changed hands. About 60 people are expected to be laid off.

Mike Sullivan, the CEO of Source Interlink did not return calls but was said to have told staff of the changes today.

AMI will assume responsibility for the editorial, distribution, circulation, marketing and other back-shop operations. Last year it took over back-shop operations of Playboy and it has actively been trying to land other clients, sources said.

Both AMI and Source Interlink have shed debt after going through pre-packaged bankruptcies in the past year. In each case, debt was exchanged for an equity stake in the reorganized company.