Choose Your Own Centerfold: Playboy on Sale for $300M

May 25, 2009— -- Ever wanted to pick your own Playboy centerfold?

Now might be your chance. It appears that the iconic magazine is being shopped around, with potential bidders being asked around $300 million for the publication. The market capitalization of the company's stock is hovering around $100 million.

Several giant players in the private equity field have been approached, including Apollo Capital Partners and Providence Equity Partners, which both refused to pay such a high premium, unnamed sources told the New York Post.

But a bidder might also come from overseas: Virgin Media, the U.K. cell phone, Internet and television giant. (The company licenses the popular Virgin name and logo from Sir Richard Branson.) The Daily Mail said Virgin's name has been "raised as a potential buyer by speculators," but that nothing solid has yet to materialize.

It seems that even porn isn't immune from the recession. Playboy, probably the most famous adult magazine, is struggling to stay alive and is about to undertake "radical changes" in what many see as a last-ditch effort to continue publishing.

Click Here to See Playboy Covers Through the Years

Options being considered including publishing less often, reducing circulation and raising prices.

"It is clear that this company cannot continue to sustain significant losses in a business that now comprises less than one-quarter of the company's revenue base," Jerome Kern, interim chief executive for Playboy Enterprises said during an analyst conference earlier this month.

So, does that signal the end for the magazine, which first started in 1953?

"The magazine will never fold as long as Hugh Hefner is alive," said Samir Husni, the chair of the journalism department at the University of Mississippi.

And even then, it might not make sense to close the publication. Husni said a money-losing magazine can still help profits at other Playboy ventures, such as online content and video.

In the last three decades, Husni said, Playboy has lost its relevancy and has had to compete with an increasing tide of porn that has made its magazine "look like Sesame Street for kids."

"It lost on the intellectual side for people who actually bought Playboy to read it. And it lost on the other side for people who just bought Playboy to look at the pictures because there were plenty of pictures now everywhere," he said. "As much as you shake the magazine, it doesn't move the same way it moves on the Internet."

Joe Francis, founder of the Girls Gone Wild video empire, said he has tried to purchase Playboy in the past and now doesn't consider the business salvageable.

"Their overhead is astronomical. They have no core business that's attractive," Francis said.

He blames the demise on Hefner, 83, who he said "refuses to change and evolve the brand" because of ego.

Still, Francis acknowledges the groundbreaking role Playboy has had on American and world culture.

Girls Gone Wild

"If Playboy hadn't existed, Girls Gone Wild wouldn't exist because I most certainly saw my first naked woman in a Playboy magazine," he said.

Francis said that while he wouldn't try to buy Playboy today, a friend of his -- who he wouldn't name -- is seriously looking at it.

"There's something to be said for an older guy to own Playboy because it means something for you," he said.

Martha Lindeman, a spokeswoman for Playboy, would not comment about any sale. She said earlier this month that decisions had yet to be made about specifically how the magazine would be changed.

Playboy has seen better days. This month, the company reported a first-quarter loss of $13.7 million. The company's revenue fell 21.5 percent to $61.6 million for the period. Losses would have been worse if the company hadn't been already implementing deep cost-cutting efforts, including closing its New York office and reducing headcount by 25 percent since October.

Stephen Yagielowicz, senior editor of XBIZ, an adult entertainment industry trade publication, said Playboy has a lot of competition from companies that are smaller and more nimble.

"I think the glory days of that brand -- that was my father's brand -- are done," Yagielowicz said. "Will the bunny live? Yeah, It's a cute logo and you will always see it on jewelry and such. But will you buy the magazine at Barnes and Noble or be able to visit the Web site? That's up in the air now. And it's all kind of sad."

"For so many years, we made money without having to try," he added. "Money just fell out of the sky. Now it's a real business."

David Standish spent 10 years as an editor at Playboy, leaving the magazine in 1978. For decades, he said, the magazine held an important place in American culture and helped shape the national agenda.

"Playboy, when it came along in the 50s, was really a socially useful instrument for people and it was part of the rebellion against the uniformity and boredom of the Eisenhower years," Standish said.

Political Stands

The magazine took strong stands on civil rights, drug laws and the Vietnam War.

"By the time I got there in the late 60s and was there through the 70s, it was a major cultural force in a way that it no longer seems to be," Standish said. "It was a place where the very best writers appeared with great regularity."

Standish, now a professor at Northwestern University's Medill School of Journalism, said that since then, the magazine's importance has diminished with each passing year.

"As time went by, the role it was playing in the culture was supplanted by many other outlets," he said.

After the magazine's articles lost relevance, all that was left were the pictures. But Playboy faced competition there from the proliferation of pornography through home video and the Internet.

"Hefner was a child of the 40s and his idea of sexy pictures were 40s pinups. He has never really pushed further beyond that," Standish said. "There is much raunchier material available on newsstands -- and has been since the 70s -- and on the Internet is all the pornography you could want."

The magazine lost about 600,000 readers between 2002 and 2008, finishing with an average circulation of 2.5 million in the last six months of the year, according to the Audit Bureau of Circulations. But it is struggling with advertising and the massive costs associated with delivering that many issues.

"Not only is advertising down but the quality of advertising is way down," Standish said. "It reminds me of what happened to Life magazine. It got so expensive for them to physically produce the magazine."