Hugh Hefner is taking Playboy Enterprises private again, 40 years after he relinquished some power over the company he founded by selling stock to the public. Hefner already controls 69.5 percent of Playboy shares — now, through a partnership he controls, he'll buy back the rest, paying a premium of 18 percent over the stock's Friday closing price. Playboy has been losing readers and advertisers to online adult-entertainment competition for years, but Hefner, who created Playboy magazine in 1953, said the move would help restore the business to its former glory. Will Hef really be able to turn around his struggling company, or is this just a desperate attempt to save a dying empire? (Watch an AP report about the buyout)
This might be Playboy's best shot at recovery: Playboy certainly needs a "savior," says Melly Alazraki in Daily Finance, after suffering through years of declining sales and earnings. It's still "one of the most recognized and popular consumer brands in the world," but it needs flexibility to chart a comeback course. The consensus seems to be that making Playboy a private company — and focusing on selling nightclubs and others the right to use its bunny-ear brand — is the best way to save it.
"Playboy going private in Hefner-backed buyout"
Hefner is taking a huge risk: "Playboy's magazine and television businesses have lately been in free fall, undercut by competition from the internet," says Martin Peers in The Wall Street Journal. Hefner and his financial backers are putting up a lot of money here — their $6.15-a-share buyout suggests the enterprise is worth nearly $300 million. To earn a "decent return" on such a large investment will take years, and "an expansion of Playboy's brand-licensing efforts." It might work, but it's "risky."
"Playboy it again, Hef"
Going private will not save Playboy: This deal will keep Playboy out of the hands of the owner of rival Penthouse, which tried to outbid Hefner, says Hamilton Nolan in Gawker. And it probably puts to rest the rumors that Hefner will have to sell the Playboy Mansion to keep his empire afloat. The deal might mean that Hefner, who's 84 years old, "can live out the remainder of his days as the king of Playboy," but it doesn't change the fact that Playboy is a terrible business that can no longer compete.
"Hugh Hefner taking Playboy private (heh)"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- After Ferguson: Stop deferring to the cops
- 43 TV shows to watch in 2014
- Ferguson riots were terrible — but this racist reaction was worse
- Is it now OK to have sex with animals?
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- The hilarious hypocrisy of Republicans complaining about the imperial presidency
- 7 grammar rules you really should pay attention to
- Hey, scolds: Stop telling us to enjoy a healthy Thanksgiving
- Don't argue about politics this Thanksgiving. Just don't.
- The real story behind Deliver Us From Evil
Subscribe to the Week