Update: 30 minutes later, WSJ is also reporting along similar lines on outsourcing of print/publishing to AMI, though it doesn’t have anything on the sale. Edit will remain with Playboy (NYSE: PLA), while rest of the functions, including ad sales and distribution, will now be managed by AMI, it quotes CEO Scott Flanders (damn you Playboy PR, I asked you the exact same question earlier today). Flanders told WSJ the five-year partnership will help return the mag to profitability by the end of 2011. Playboy has about 30 full-time employees working in biz ops and most would lose their jobs as a result. Flanders said he is open to outsourcing other parts of the biz, which in media context means someone else also taking over online and TV, not part of the AMI deal.
Our original post, slightly premature: The Playboy Enterprises deal is about to close, paidContent has learned, and the front runner is still Iconix Brand Group, the London-based owner of London Fog, Joe Boxer, Ecko Unltd and others. What isn’t clear is the structure of the deal, whether it is a full buyout — or if Playboy will be retaining any stake. The interesting part is the fate of the publishing assets: American Media Inc, the publisher of National Enquirer, Star and Shape, will be taking over the business operations of the magazine, including distribution and ad sales, we have learned.
Even if the sale was not to happen, our sources say, AMI would still have been managing it, though the edit would have stayed under Hugh Hefner, according to the backup plan.
What’s not in the AMI deal: online and TV, which makes things a bit confusing if Iconix, which has no experience in either, manages it (unless Playboy retains that stake as we mentioned above). AMI narrowly missed bankruptcy earlier this year, after coming to a last minute agreement with its lenders and shareholders. Playboy PR had no comment when reached this evening.
Playboy has said since February that it would be open to offers for a buyout. The company had reportedly reached out to several PE firms, although they balked at the company’s $300 million asking price. At one point, Virgin Group was also said to have been interested, although it later denied those reports.
While Playboy CEO Scott Flanders has said that the company’s iconic magazine will remain its “flagship,” he has also said that a big goal is to “accelerate the growth” of the company’s licensing business, which currently accounts for the vast majority of its profits.