from www.esquire.com – There have been dramatic structural changes at Playboy Enterprises in recent years that have been both essential and painful. The 2008 recession, combined with tectonic shifts in the publishing industry, nearly saw Playboy go under.

The company’s stock plummeted — it had gone public in 1971 — and the New York Stock Exchange threatened to delist it. Circulation of the magazine collapsed to 1.5 million from its peak of more than 7 million in the 1970s. The clubs had long since been closed. Christie Hefner, who had taken over as CEO in 1988, finally resigned in December 2008, having reached her personal limit.

“I had run out of things I could do for the company,” she says today. “There’s this expression in business, ‘Don’t bet the ranch.’ Our equivalent was ‘We cannot bet the Mansion.’ We cannot make a bet financially that, if it doesn’t work, I have to call my father and tell him I’ve found a lovely one bedroom in Westwood.”

Christie Hefner was replaced by a self-described change agent named Scott Flanders. “This needed a new set of eyes,” he says. He spent the first three months of his tenure reviewing the company’s books before he made a startling announcement to Hefner and the board: Playboy wasn’t going to make money as a media company anymore.

There were too many other ways for American men to find what Playboy alone had once offered them. But the company could still make money as a brand. Playboy’s value was in the name and the white rabbit and the images it still evoked for 97 percent of people around the world. The magazine, which even now loses millions of dollars a year, might still exist as a kind of engine, as the narrative that sells the products, but it was in global licensing agreements — in T-shirts in the Czech Republic and a beer in Brazil, in bath products and bottled water — that it would find its profit. Flanders was surprised when Hefner and the board agreed.

Even more significantly, Playboy went private in 2011. Flanders swears that the move was Hefner’s idea; Hefner says it was, too, but he can’t remember the seeds of it. The hitch was that Hefner didn’t have enough money to buy the company from its shareholders on his own.

He needed a partner with deeper pockets, and he found one in a private-equity firm, Rizvi Traverse Management. A prolonged series of negotiations ended with Hefner owning only a minority stake in the company he’d founded — 34 percent against Rizvi’s 60 — but with contractual control over the twin pillars of his existence, the magazine and the Mansion.

However necessary the move was, it was the sort of compromise that nobody could ever have imagined Hefner making. He suddenly had become an employee of his own company, earning $1 million a year for his editing and ambassadorship, and a tenant in his own home, paying an annual rent of $100. The new company either licensed or auctioned off its TV channels, satellite radio station, and digital outlets.

Its venerable Chicago offices were closed, hundreds of employees were laid off — but none at the Mansion — and remaining staff were moved into new, spare concrete-and-glass offices in Beverly Hills. The dozen or so original LeRoy Neiman paintings were shipped across the country and hung on the walls, but little else of the original Playboy remains.

There is only Hefner, and his magazine, and his Mansion. “I’m a very successful businessman, but I don’t really give a shit about business,” he says. “Those were the only things I ever cared about.” The rest of Playboy is now just an idea, available for a fee.

Cooper Hefner [pictured], the spitting image of his father, has emerged as a possible successor; just the mention of his name causes Hugh Hefner to smile. For Cooper, Playboy is in the midst of a much-needed internal revolution that he would like to help see through. “This is my family’s legacy,” he says, even sounding like his dad.

“I should be the toughest critic. I was sitting upstairs looking at the Marilyn Monroe issue and the Bree Olson issue [from August 2011], and I was thinking, How did we come to this? What we were is not what we are today.” Cooper — still in college, a senior at Chapman University, south of Los Angeles — has pored over the scrapbooks, and he has sometimes stopped in amazement, staring at a photo of his father standing shoulder to shoulder with Bill Clinton or John Lennon or Malcolm X.

He knows that Playboy was once more than a magazine, the company more than a white rabbit. It was an electrical current. It was brave, and he wants it to be that way again. “I don’t want us to be afraid anymore,” he says.