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paidContent - Is There a Case for Playboy + Maxim?

This story was written by Rafat Ali.

We’ve been doing our channel checks for some time on the fates of two iconic brands in the men’s magazine industry. One is more troubled than the other, and both, in the end, will have a different owner, sooner rather than later. Both Playboy and Maxim have gone through inordinate amount of trouble in the last few years. Playboy Enterprises (NYSE: PLA) recently brought in a new CEO Scott Flanders, even as it continues to explore its strategic options; he is known as a cost-cutter, and trying to stabilize a much-pared-down print book. He has also been on a listening tour of the company since joining, and has been overseeing the closure of the company’s NYC offices.

Meanwhile, Maxim is a mess. It is now owned by Cerberus Capital, the PE firm that got it by default last month. Maxim’s shell parent is Alpha Media Group, which at one time included Blender magazine; the music mag closed down in March and is now online-only. Cerberus has no intention of keeping Maxim, and is looking to flip it for whatever it can get.

Both companies have been hit badly by the availability of racier and more hardcore adult content free online. At Playboy, the company started exploring strategic options earlier this year as Christie Hefner left her CEO post; it was reportedly asking for about $300 million, a price that would scare off any interested buyer in this market, particularly given its low visibility on the print side. Maxim has a younger-skewing audience, though, of course, much less then its heyday.

Both are strong brands internationally, and both have done various line extensions with varying degrees of success. Dressing them up together might help make a better case for a buyer, especially an international one (a Russian billionaire, perhaps?). That’s at least the sentiment among some of the execs I have spoken to inside and outside the two companies. No formal talks at this point, from what I understand, and Flanders needs more time to work through the options. My own sense is that nothing will come of it, but there’s enough potential there that some people have been thinking along these lines. And then, the bigger question is whether the non-free, softcore men’s entertainment market is doomed going ahead, in face of plenty of other options.

When asked, Playboy PR’s official comment: no comment.


By Rafat Ali
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