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Unlike Manwin, Larry Flynt’s LFP keeps a relatively low profile. But that all changed this week when Flynt virtually swept a deal out from under Manwin’s feet by acquiring New Frontier Media in an announcement no one saw coming.
Manwin Holding, which owns Playboy’s digital and entertainment assets, including Playboy TV, offered $24.3 million for New Frontier earlier this year. LFP, however, ended up purchasing the company for $33 million cash, despite New Frontier being chronically unprofitable.
New Frontier Media lost $3.5 million in 2012 on revenues of $41 million and sales were down from $49 million the year before.
New Frontier’s stock lost more than 78 percent of its value through the past five years — mainly due to increased competition from the internet.
Ken Boenish also resigned as president of New Frontier last August.
Boenish never gave a reason for his departure, but did walk away with a compensation package up to $948,700 along with $30,000 a month to consult for the company and a promise “not to reveal trade secrets, compete against New Frontier Media or solicit its employees to leave the company.”
Then in recent weeks Michael Weiner was fired as CEO of New Frontier and was paid $2.4 million. Everyone would like to get fired like that, but if you know anything about the company’s history, there’s enough skeletons in that closet to start a cemetery.
All these negatives are hardly compelling reasons for a company to get in a bidding war, so the question you have to be asking yourself is why did Flynt pay almost $9M more than what Manwin was ready to fork over?
The top job at New Frontier Media is being handled for the time being by New Frontier’s CFO, Chief Legal Officer, and Chief Technology Officer, Alan Isaacman. Isaacman represented Flynt in the 1988 Supreme Court case between Hustler Magazine and Jerry Falwell. In business, it helps to have powerful friends on the inside, but nostalgia and old times wouldn’t be enough to get Larry to part with that kind of cash.
Speculation is running high on the hillbilly gossip site that Flynt wants to go public with an IPO, which I don’t think is going to happen. Unless things have changed over at LFP and it doesn’t mind the SEC poking through its laundry looking for the secret money men.
More significantly, New Frontier’s TV programming services includes Penthouse TV and subscription websites. Flynt Productions currently owns TV networks, magazines, web sites, nightclubs and a casino.
“The acquisition of New Frontier Media fits perfectly with our strategic plan for the growth of our company,” said LFP president Michael Klein.
“The addition of these assets to our portfolio strengthens us significantly moving forward.”
More importantly, Flynt just showed that young whippersnapper Fabian who’s boss and it only cost him $9M.