Penthouse Sold (again)

Gordon3 · June 6th, 2018, 05:47 AM

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

Gordon3 · September 27th, 2018, 04:42 AM

Not to bump this thread, but some documents have just been released to the public record, on free legal sites, that paint a sobering picture about the adult industry's current state, and Penthouse's status in January; very depressing to see PH begging a lawyer for $200 for still camera film

(from https://www.scribd.com/document/3704...72-00000-1-pdf). There's a bunch of interesting detail in that PDF, if you're into that sort of thing.

I have included a simplified balance sheet, showing what PH looked like back in January.

Boy, the thing that sticks out is...GET RID OF THE MAGAZINE!

Also, the comments from still-in-charge Kelly Holland was that International licensing was disappointing, an understatement, indeed.

In my comment above, I thought the web site was a bigger drag than it is; it actually has a trivial amount of equity.

Their overseas cable does well, certainly versus US-cable (which appeared to be lumped in with the web site). The argument, for us long-time fans who would like to see PH hang around in some form, would be for PH to go to where the new media is, and by that, I don't mean just another pay-for-porn web site.

For example, SiriusXM just paid a shade under $4 billion for Pandora this week (I think the number is correct). Now I knew that Pandora, having lost to Spotify, et.al., in streaming audio, was looking for an exit, but who knew that SXM had that much money & equity to buy Pandora, even if taking on debt to do it? They're desperate for streaming audio content, to build a portfolio of offerings for the music streaming & podcasting crowd, and willing to pay for it...do you hear me, Penthouse?

astronight · October 3rd, 2018, 10:49 AM

I like this Info but to think that Sabrina West Pet of Feb 1996...She had it to make this whole corporation be successful..she was and is perfect! Do not buy her photos to put in your magazine, pay her her perfection worth, her toenails alone are centerfold material.

**Reclaimedwg** · October 3rd, 2018, 03:02 PM

One of Penthouse's mistakes is they went hardcore (in their monthly periodical) which drove up their circulation sales and then they decided to go back to softcore.

**steamjon** · October 3rd, 2018, 11:33 PM

Going back to soft core. Well that sucked

Gordon3 · October 4th, 2018, 03:33 AM

Quote:

Originally Posted by wildtig2013

One of Penthouse's mistakes is they went hardcore (in their monthly periodical) which drove up their circulation sales and then they decided to go back to softcore.

I had always heard over the years that, while newsstand sales went up slightly when they went hardcore, the subscription numbers dropped to more than make up for it. The second issue with going hardcore wasn't just the Hustler-style pictorials, but the peeing, so much peeing.

It was too much at once for many subscribers, and they never came back.

Gordon3 · October 8th, 2018, 11:28 PM

Quick correction, SiriusXM bought Pandora for $3.5 billion, a bigger difference than "a shade under" $4 billion.

ShutUpLutz! · October 9th, 2018, 01:18 AM

Quote:

Originally Posted by Gordon3

I had always heard over the years that, while newsstand sales went up slightly when they went hardcore, the subscription numbers dropped to more than make up for it. The second issue with going hardcore wasn't just the Hustler-style pictorials, but the peeing, so much peeing.

It was too much at once for many subscribers, and they never came back.

I was going to start a thread about just that topic, the peeing, but now I don't have to.

I did have a subscription for a year when I first went to college, then picked up cover free copies when I worked at B&N.

So, what the hell was the deal with the pissing? I know Guccione Senior was known to sleep with many of the Pets,while warning his son to stay the hell away from them, but never got the idea he was into peeing/watersports. Was it a choice to he made to try and keep up with Hustler's increasing raunchiness? I know it got really extreme with at least one layout where every pic had pissing, and that was where I stepped back.

Gordon3 · October 9th, 2018, 04:58 AM

Quote:

Originally Posted by ShutUpLutz!

I was going to start a thread about just that topic, the peeing, but now I don't have to.

I did have a subscription for a year when I first went to college, then picked up cover free copies when I worked at B&N.

So, what the hell was the deal with the pissing? I know Guccione Senior was known to sleep with many of the Pets,while warning his son to stay the hell away from them, but never got the idea he was into peeing/watersports. Was it a choice to he made to try and keep up with Hustler's increasing raunchiness? I know it got really extreme with at least one layout where every pic had pissing, and that was where I stepped back.

1. Heard the same thing about Guccione sleeping with Pets. Also heard a story over the years that a lot of prominent models, during the boom years of the 80's & early 90's, having been approached by both PB & PH, made their decision on which magazine to pose in, not based on how much skin they had to show, or what "potential" they would have after posing, but on whom they preferred to sleep with, Hefner or Guccione.

I guess Guccione warned his son off because he wanted them for himself.

2. The peeing thing: I actually prescribe that to a bit of insanity on Guccione's part. Hustler (from the few issues I've seen from that era) didn't have watersports, just the hardcore sex photos, formatted similarly to VHS porn of that time. On the other hand, Guccione's health wasn't that good and he was well on his way to bankruptcy by that time, so I don't think he was in his right mind. But that move did certainly cement his fate.

(BTW, my B&N contact says that PH Letters is still around, of which they only get a few copies, but they move.

)

skippy1729 · January 1st, 2019, 11:26 PM

I haven't bought PH in years; the peeing and HC turned me off. Have the new, new owners changed the format again? Is Kelly Holland still in charge of operations or is she gone after the buyout?

June 6th, 2018, 05:47 AM	#1
Gordon3 Senior Member Join Date: Dec 2015 Posts: 458 Thanks: 2,479 Thanked 5,237 Times in 446 Posts	Penthouse Sold (again) 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

October 3rd, 2018, 10:49 AM	#3
astronight Senior Member Join Date: Oct 2008 Posts: 214 Thanks: 139 Thanked 2,994 Times in 200 Posts	I like this Info but to think that Sabrina West Pet of Feb 1996...She had it to make this whole corporation be successful..she was and is perfect! Do not buy her photos to put in your magazine, pay her her perfection worth, her toenails alone are centerfold material. __________________ To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.

September 27th, 2018, 04:42 AM	#2
Gordon3 Senior Member Join Date: Dec 2015 Posts: 458 Thanks: 2,479 Thanked 5,237 Times in 446 Posts	Not to bump this thread, but some documents have just been released to the public record, on free legal sites, that paint a sobering picture about the adult industry's current state, and Penthouse's status in January; very depressing to see PH begging a lawyer for $200 for still camera film (from https://www.scribd.com/document/3704...72-00000-1-pdf). There's a bunch of interesting detail in that PDF, if you're into that sort of thing. I have included a simplified balance sheet, showing what PH looked like back in January. Boy, the thing that sticks out is...GET RID OF THE MAGAZINE! Also, the comments from still-in-charge Kelly Holland was that International licensing was disappointing, an understatement, indeed. In my comment above, I thought the web site was a bigger drag than it is; it actually has a trivial amount of equity. Their overseas cable does well, certainly versus US-cable (which appeared to be lumped in with the web site). The argument, for us long-time fans who would like to see PH hang around in some form, would be for PH to go to where the new media is, and by that, I don't mean just another pay-for-porn web site. For example, SiriusXM just paid a shade under $4 billion for Pandora this week (I think the number is correct). Now I knew that Pandora, having lost to Spotify, et.al., in streaming audio, was looking for an exit, but who knew that SXM had that much money & equity to buy Pandora, even if taking on debt to do it? They're desperate for streaming audio content, to build a portfolio of offerings for the music streaming & podcasting crowd, and willing to pay for it...do you hear me, Penthouse?

October 3rd, 2018, 03:02 PM	#4
Reclaimedwg Vintage Member Join Date: May 2011 Posts: 3,414 Thanks: 7,709 Thanked 26,946 Times in 3,089 Posts	One of Penthouse's mistakes is they went hardcore (in their monthly periodical) which drove up their circulation sales and then they decided to go back to softcore.

October 3rd, 2018, 11:33 PM	#5
steamjon Vintage Member Join Date: Feb 2008 Posts: 1,109 Thanks: 6,188 Thanked 22,399 Times in 1,260 Posts	Going back to soft core. Well that sucked

October 8th, 2018, 11:28 PM	#7
Gordon3 Senior Member Join Date: Dec 2015 Posts: 458 Thanks: 2,479 Thanked 5,237 Times in 446 Posts	Quick correction, SiriusXM bought Pandora for $3.5 billion, a bigger difference than "a shade under" $4 billion.

January 1st, 2019, 11:26 PM	#10
skippy1729 Senior Member Join Date: Jun 2008 Posts: 285 Thanks: 1,313 Thanked 2,908 Times in 261 Posts	I haven't bought PH in years; the peeing and HC turned me off. Have the new, new owners changed the format again? Is Kelly Holland still in charge of operations or is she gone after the buyout?