The death of Hugh Hefner might also bring the death of Playboy’s print magazine, according to Playboy Enterprises interim CEO Ben Kohn.
Instead, the magazine’s parent company might shift its focus on brand partnerships and licensing deals –think that famous bunny logo– and forgo its editorial branch, according to The Wall Street Journal.
“We plan to spend 2018 transitioning it from a media business to a brand-management company,” Kohn said in May 2016.
Following Hefner’s death, private-equity firm Rizvi has been trying to secure the 35 percent stake the founder left in his estate. If successful, Rizvi’s acquisition would accelerate any major business changes.
Playboy Enterprises currently receives at least half of its annual revenue from such sponsorship schemes.
Rizvi Traverse helped Hugh Hefner take Playboy private in 2011 and received control of nearly two-thirds of the company. As part of the deal, Rizvi Traverse agreed to keep publishing the magazine for as long as Hefner lived.
Famous for its racy images of naked women, the magazine launched Hefner’s Beverly Hills-based publishing and entertainment empire. But Hefner’s death has triggered a process that will shift ownership of the company from his family to the largest shareholder, private equity firm Rizvi Traverse, the Wall Street Journal reported Tuesday.
The private equity firm now is in talks to acquire the 35% stake Hefner left in trust to his heirs, the Journal said, quoting an unnamed person familiar with the matter.
Playboy wants to raise $25 million to $100 million early this year to help buy back the shares and fund future partnership deals, the person told the Journal.
Ben Kohn, a managing partner at Rizvi who is Playboy Enterprises’ chief executive, wants to shift the company’s emphasis to brand partnerships and licensing deals.
“We want to focus on what we call the ‘World of Playboy’ which is so much larger than a small, legacy print publication,” Kohn told the Journal. “We plan to spend 2018 transitioning it from a media business to a brand-management company.”
That shift involves seriously considering ending the print magazine, which began in 1953. U.S. circulation has dropped to less than 500,000 an issue from a peak of 5.6 million in 1975 amid struggles in the broader print magazine industry.
The Journal said Playboy’s print magazine, which now publishes six issues a year, has lost as much as $7 million annually in recent years.
“Historically, we could justify the losses because of the marketing value, but you also have to be forward thinking,” Kohn said. “I’m not sure that print is necessarily the best way to communicate to our consumer.”
John Vlautin, a spokesman for Playboy Enterprises, declined to comment Tuesday. A spokesman for Rizvi Traverse did not immediately respond to a request for comment.
In 2016, Playboy stopped publishing fully nude photos of women as part of a redesign of the print magazine that reflected the widespread availability of such imagery online. But last year, naked women were back in Playboy, and Cooper Hefner — the founder’s son and the company’s chief creative officer — said the ban was a mistake.
“Nudity was never the problem because nudity isn’t a problem,” Cooper Hefner wrote on Twitter at the time. “Today we’re taking our identity back and reclaiming who we are.”
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