Hugh Hefner has a plan for keeping his majority stake in Playboy Enterprises all in the family.
But it will take time, and he’s worried time may be running short.
At age 82, “Hef” has every reason to think about succession. His 56-year-old daughter, Christie, announced her resignation this week after 20 years as Playboy’s chief executive, prompting speculation that his empire could go up for sale any day now.
Yet Christie wasn’t in line to become the new Hef. He has been counting on his teenage sons, Marston and Cooper, who stand to inherit his 70 percent ownership of Playboy’s voting stock through a trust arrangement.
Hef still wants his sons to get the stock “if it is possible,” he said in an interview. “That is the original plan. I can’t say anything with certainty about that now because of the change in the economy.”
At Playboy, making money takes a back seat to changing the world, according to its founder, who ushered in the sexual revolution of yore.
These days, however, Playboy needs to make money, or there may be nothing left of it for Hef’s youthful offspring to inherit. The stock has plunged from more than $28 a share earlier this decade to $2.07, a market value of not quite $70 million—”a real beating,” in Hef’s words.
“All I’m saying is there are ‘unknowables,’ ” he said. “I don’t know what my own economic situation will be. I can’t look that far into the future because of the economy. I want to look out for the company as well as for the boys.”
Pressed to be more specific about his financial concerns, Hef took note of the bankruptcy filing by Tribune Co., publisher of this newspaper. “And you are asking me?” he said with a laugh. “I think you answered your own question. We share a common set of circumstances.”
Playboy watchers have long theorized that a deep-pocketed buyer could make much more of the global brand than the family-controlled company has done so far. Playboy could launch its own casinos, cruise lines and clubs, if it only had the money, the thinking goes.
But Playboy always has faced intense competition in all its businesses, and technological change is turning the adult entertainment industry upside-down yet again.
Playboy’s famous magazine has lost money for years, and it plays a declining role at the firm. Adult-only TV programs and movies have been its mainstay. Free and pirated content available on the Internet is undermining that business.
“It’s a tough time for the industry, from Playboy to hard-core smut and everything in between,” complains Bill Asher of Vivid Entertainment Group, a Dartmouth College graduate turned adult filmmaker who once worked for Playboy. “You have free stuff given away. You have people stealing your stuff and giving it away.”
Licensing has been Playboy’s savior. Apparel and jewelry with the bunny logo has become a hot seller. The company also has moved—slowly, with experienced partners—back into clubs and gaming. Those were big businesses for the firm during Hef’s heyday decades ago.
Hef sees opportunity. “It is a lifestyle media brand that now has global implications,” he said. “We have special promise.”
Even without him, he said, Playboy will endure: “I think the brand is now globally more powerful, so it doesn’t really need me.”