Playboy business on sale for $500 m- but is there still fund in the bunny?

The erotic magazine has switched to a no-nudes policy but some analysts ensure the brand as overvalued: the reasons for its existence are no longer in place

What price a pair of bunny ears with a long history, an erotic publication with a faded pedigree, and a Hollywood mansion with an octogenarian sitting renter? Its a question media consolidations and acquisitions analysts are trying to answer after the private equity firm Rizvi Traverse set Playboy Enterprises up for sale last week.

While the sale of a media asset with roots in the fighting publish sector is not in itself surprising, the fact that Playboy has hung a $500 m asking price on the entire company while it is midway through a rebranding exercise has shocked some in the company.

Playboys bankers, Moelis& Co, have said they havent been approached by bidders and some executives see a sale as premature and would rather find the rebranding completed before a sale.

If a buyer can be found, it will be the second time the iconic brand has changed hands in four years; in 2011, the company was taken private and started transforming itself into a brand-management company.

The potential purchaser would be taking on a brand that is trying to escape decades of shoddy bargains that cheapened Playboys image. The company has extricated itself from unprofitable licensing bargains, regained control of its website now considered safe for access from a work environment and has, with much fanfare, revamped the magazine as a no-nude, mid-shelf mens mag.

But while the decision to fell nudity at the least of the knickers-off kind falls into line with the needs of mainstream advertisers, its created discord within the Hefner clan.

Patriarch Hugh Hefner , now 89, still retains a veto over content as well as a lifetime guarantee of residency at the famous Playboy mansion and a yearly stipend estimated at several million dollars a bargain that simulates one the late Penthouse pornographer Bob Guccione forged to live out his days at his Upper East Side mansion in New York.

While Hefner has run along with the managements no-nudes policy, his 24 -year-old son Cooper Hefner came out railing against the decision, accusing the management of sidelining him.

He disagreed with the decision to put the mansion, valued at $200 m, up for sale. My concern is making sure that there is a company that people care about in 15 years, he told Business Insider.

That anxiety is shared by Playboys private equity vendors; in 2014, the company refinanced $147 m of indebtednes with a single lender after its financial performance deteriorated further. Recent figures suggest it is losing$ 6m a year in the US, losses offset by licensing fees from 30 international editions.

The problem for Playboys management is familiar to all publish publishers and, separately, to pornographers: print is in sustained, apparently irreversible, decline; subscription porn like the Playboy channel, once profitable with revenue from hotel customers, has been supplanted by free web porn.

Despite high brand recognition Playboy does not appear to have a ready way to access a younger generation of consumers. Short of a foreign purchaser with a ready overseas marketplace looking to tap the Playboy lifestyle ideal, theres little to reflect it in contemporary cultural aspirations and ideals, says publishing analyst Samir Mr Magazine Husni.

The brand has no future because the reasons for its existence are no longer in place. Just the name is more of a liability than an asset. I doubt anybody will pay that much. Theyre living in a dream world.

Playboys circulation peaked in the 1970 s. Photo: Alamy

Husni believes that magazines are an accurate reflection of society and that Playboy has lost its reflection. Dozens of porn or soft porn titles that existed through the 60 s and 70 s have folded. Playboy has hung on longer thanks, in part, to its strong brand; a brand it is struggling to reposition for the millennial era.

In 2013, in preparation for its 60 th birthday, the company brought in a sex anthropologist to assistance stimulate the content more appealing to a new generation.

Playboy sold off its Spice channels and other Tv and digital properties to internet porn giant Manwin then reacquired control of the Playboy site in an attempt to take the brand upmarket with way deals, including one with Italian house Dolce& Gabbana. Apple also agreed to take Playboy content.

The potential sale of the brand comes as valuations of digital properties are reaching new highs. The German publisher Axel Springer paid $343 m for control of Business Insider last year, while Vice Media is now valued in excess of$ 4bn after receiving investments from Walt Disney and 21 st Century Fox.

But rival pornographer Larry Flynt doubts the company can refloat the Playboy vessel. He has called the no-nude scheme akin to rearranging deckchairs on the Titanic and mischievously indicated he might buy the mansion, replacing Playboy Bunny with Hustler Honeys.

I know hes getting old but I didnt know hed lost his mind, he told CNN. How can you take the most important point feature of your publication and drop it? What it became notorious for.

Playboy is no longer an appropriate channel for sexuality and sex advice, and nobody today refers to themselves as a Playboy man the designation no longer exists. It had a great life, a healthy life, and it served a great role but we should recognise that everything has a life cycle.

Still, under the new management, Playboy has shown signs of life.

While the publication itself is not published in China, Playboy-branded products from garb to shoes and accessories are sold in 3,500 retailers. Out of Playboys $1.5 bn in annual retail sales worldwide in 2013, more than $500 m come back here China, according to company figures. CEO Scott Flanders called the figures testament to the tremendous power of our brand.

Christie Hefner, daughter of Hugh Hefner, has pushed for change at Playboy. Photo: Katherine Anne Rose for the Observer

The magazine, meanwhile, reports that advertising page numbers have risen since it dropped nudity. But that may not be the same for sale. One newsstand vendor in Manhattan reported merely a handful of non-nude issue marketings a fraction of the last full nude issue featuring Baywatch star Pamela Anderson.

In its new incarnation, the photography is softer. The women tend to look more come-hither than post-coital; the tales less tales of masculine adventure than a more modern those who are interested in cultural and social issues.

The non-nude policy is a triumph for Hefners daughter Christie who had been advocating the change for decades as circulation fell from a peak of 5. 6m to less than a million today. Whether it runs or not she has pulled off a remarkable feat.

It was a standing joke within the industry that whatever changes the companys New York editorial team would institute, the publication would return from Los Angeles looking exactly as it has always done. A sense of deep sclerosis had set in.

On the occasion of the publications 50 th anniversary, a sad bunny told this reporter of her consternation that Hefner had chosen her least favorite colouring, amber, for her costume to match the background of her centrefold spread. Hefner would not be swayed by any quantity of imploring; policy was policy, she was informed , no changes.

The changes at Playboy are not being introduced without upset and pain. Scott Flanders has been accused of creating a difficult work environment. Following a party in 2011, Flanders was accused of failing to observe expected boundaries between a CEO and female employees and was sent for sensitivity train , according to the Wall Street Journal.

This, as much as anything, may explain why Playboy is in turmoil. The mansion, replete with jacuzzis and grottoes and lounges, was designed explicitly for boundary-challenging adventures the Playboy ideal or marketing illusion of an idealised heterosexual playground. But with the family battling management, management battling investors, the company laden with indebtednes and the global value of its bunny ears hard to establish, Playboy remains a proposition that seems stuck in an older, Mad Men, era.

The company clearly has value. The US licensing marketplace is untapped. The brand recognition is up with Coke and Apple, so it would seem to have potential, says one Playboy executive. Hef has veto rights and hes the de facto editor-in-chief but, at 89, obviously out of touch.

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