Wednesday, July 14, 2010
Playboy Not Looking for Friends
The old man wants to keep it alive, if he doesn't, then he dies. Or so it seems. In its heyday, Playboy Magazine, with a circulation of 7 million, was the leader in men's magazines. Always a classy act in terms of its photo presentations, sales suffered as competitors such as Penthouse and Hustler increased the raunch factor. The stake in the heart for all magazines, both soft and hard porn, has been the internet. Everything a person could imagine is available within just a few key strokes. Just like the US Postal Service, Playboy's Hugh Hefner, is having trouble swallowing the reality of increasing uselessness.
Mr. Hefner, an icon in pajamas and smoking jackets, is a curiosity. An 84 year old gentleman presenting himself as sexually vital, surrounding himself with women eligible to be his great grand daughters, stretches the imagination. When the company is analyzed, it turns out the profit center is its licensing of the Playboy name and logo. Playboy slot machines remain popular.
70% of the class A and 28% of the class B shares of Playboy are owned by Mr. Hefner. While he feels the pressure of a takeover, he has offered to take the company private. He is offering $122 million for the shares he does not own. With this offer, he forced the share price from $3.94 to the $5.50 range. Penthouse, an old rival and nemesis, is going to try to wrest Playboy from Mr. Hefner's control. Penthouse Enterprises was market savvy in 2007, when it purchased FriendFinder. FF is an internet holding company, in control of several online services. Cleverly Penthouse, once it bought FF, changed its name to FriendFinder.
The Playboy takeover portends to be interesting, especially to the more mature crowd, who lived at a time when the monthly editions of Playboy were eagerly anticipated. Playboy's real problem is that their essential product, pictures of naked women, is supplied in a better and more facile manner by other sellers. Some would say Mr. Hefner should give up the dream, cash out, and enjoy what he has left. But, others would argue that Don Quixote never gave up and that Mr. Hefner, a first amendment champion, should fight to live out his dream. FriendFinder is planning to do something, soon. So it goes.