Playboy Enterprises Inc. could be aiming to end its print magazine to focus on the company’s branding and licensing, according to The Wall Street Journal.
“We want to focus on what we call the ‘World of Playboy,’ which is so much larger than a small, legacy print publication. We plan to spend 2018 transitioning it from a media business to a brand-management company,” said Ben Kohn, a managing partner at private-equity firm Rizvi Traverse, the company’s controlling shareholder.
“I’m not sure that print is necessarily the best way to communicate to our consumer going forward,” Kohn said in The Journal’s report.
The shareholder is looking to gain the 35-percent stake that founder Hugh Hefner left in trust to his heirs, a person familiar with the matter told The Journal.
Rizvi Traverse had agreed to keep the print magazine going while Hefner was alive, and that deal granted Hefner the ability to approve or deny some deals, an ability that does not pass to his heirs, the report said.
Since 2011, the company has focused on licensing deals, placing its name on such businesses as nightclubs in India and casinos in London, but has had mixed results. Two nightclubs in Macau closed quickly due to failure to obtain gaming licenses, and local resistance led to an Indian beach resort never opening.
Other licensing deals such as a fragrance line, a Sunset Strip lounge, and licensing in China — where the magazine does not exist — have been successful, the report said.
Kohn said more focus would now be on equity partnerships, including moving parties from the Playboy mansion to Las Vegas nightclubs, where they generate income instead of being magazine marketing expenses, The Journal report said.
Hefner’s heirs have an option in the Rizvi Traverse deal that allows the heirs to force the firm to acquire their shares, and both sides are negotiating on the company’s value, The Journal reported.
The company’s revenue was around $90 million in 2017, split between media and licensing. Kohn said the company is not for sale, and projected a revenue growth of 20 percent for 2018, the report said.
Hefner’s trust requires his beneficiaries — four children and widow Crystal Harris — to stay sober or be removed from the trust.
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