Penthouse Sold (again)

[Gordon3]

Just two years ago, porn producer Kelly Holland bought PH from FriendFinder, borrowing about $10 million to do it. PH filed for bankruptcy in January and was auctioned yesterday, for $11.2 million, to the holding company that owns BangBros.

Boy, the numbers are hard to square up, primarily, the smallness of them all, and the lost opportunity:

$10 million of annual revenue claimed,

$5 million of which is those Asian soft adult cable channels & US pay-per-view,
so $5 other million is print, digital, & licensing.

But, they only owe $10 million?

And were only sold for $11.2 million? There's no way a company sells for 1.1x annual revenue!

As one article said, the company hid accounting losses, and were being sued for missing debt payments. So, revenue had to be misstated, clearly. But, a lot of licensing deals must have also fell through (one of Holland's original goals). In addition, even if Penthouse.com had 10,000 subscribers (a number I saw claimed, I believe, somewhere on avn.com, but I can't find it again), that's $3 million a year, so that was overstated, and must have been a money loser.

Just anecdotally, at Barnes & Noble, which still carries Penthouse, they get a lot of copies (a few dozen according to an employee I know), and only send a few covers back, but nationally that's only good for about 30,000 copies (at the current roster of ~600 stores). A glossy like PH can't get by on ~50K circulation. The Forum/Letters magazine, I believe, has been discontinued.

This seems like a missed opportunity...the magazine has been positioning itself for the last several months as being more friendly to women readers, who have always been a "hidden" readership. Maybe this idea is too late in the Internet age, but branding Penthouse media products as a version of Cosmopolitan, but sexier, and still embracing the history, as well documented here at VEF, seems like it would have had potential, for at least 7 figures of revenue...Hell, there are C-list YouTubers & Twitch streamers who make that much.

Unfortunately, as documented by Mike South and others, Holland made some big mistakes:

1. Not paying some consultants who worked on the original buyout.
2. Strangely, Holland is still in the process of being sued by some male PH employees, for sexual harassment (questioning their manhood, et.al.). She's known as being a feminist, but maybe there is such a thing as being in porn too long.

If you're leveraged, and scraping for revenue, additional, dumb mistakes that increase your liabilities, and thus, your effective debt, turns a difficult situation into an impossible one.

Sorry for the rant, but this depresses me, for some reason.

Other news stories referenced:
https://avn.com/business/articles/le...er-779541.html
https://theblast.com/bangbros-buys-p...tion-millions/
http://www.latimes.com/business/holl...112-story.html
https://www.bloomberg.com/news/artic...-in-california
http://www.latimes.com/business/holl...423-story.html