Cincinnati- Dan Staton, a former No. 2 executive of Duke Realty Corp. and a major downtown Cincinnati real estate investor, is selling his share in Penthouse magazine. He plans to share some of the profits with a yet-to-be-named Cincinnati charity.
Staton is part of a triumvirate that purchased control of the famed adult magazine through bankruptcy court in New York. He and his partners are working to sell control of Penthouse to a Mexican entrepreneur.
“That’s my plan,” Staton said this week. “Let’s keep our fingers crossed that this deal goes through.”
Staton, who now lives in Del Ray Beach, Fla., said he became aware of the Penthouse deal last fall while attempting to launch a new real estate investment group.
He joined Internet wunderkind Marc Bell of Boca Raton, Fla., in a partnership known as PET Capital Partners. Staton, Bell and a third unnamed partner last November acquired 75 percent of the Penthouse parent General Media’s preferred stock and 89 percent of the company’s secured debt.
Under a deal struck April 15, Luis Enrique Fernando Molina spent nearly $10.3 million to buy the preferred stock from Staton and his partners. Molina has until Aug. 6 to pay more than $50 million for the debt from Staton’s group or risk killing the deal. A bankruptcy court judge in New York also must approve details in a June 15 hearing, Staton said.
“They will pay this enormous profit, and we will walk away and say thank you very much,” Staton said. “If they don’t close, they will pay us a substantial breakup fee.”
Even with a controlling interest in Penthouse, Staton said he and his partners have exerted little influence over day-to-day operations. Staton and Bell chatted about plans to tailor the magazine to a more mainstream clientele instead of the hardcore edge it has embraced in recent years.
Penthouse and other similar magazines have suffered with the proliferation of other adult-oriented outlets such as the Internet, mail order, cable TV and satellite dishes.
Phil Burress, president of the group Citizens for Community Values in Cincinnati, believes more vigilant prosecution of obscenity laws is a factor in the circulation drop of adult magazines.
Penthouse founder Robert Guccione “thought he needed to go more sexually explicit, and he found fewer and fewer people were willing to sell it,” Burress said.
Under the deal struck by Molina, Guccione remains as chairman of General Media and editor-in-chief of Penthouse. Molina even agreed to purchase Guccione’s Manhattan townhouse to halt an eviction.
During a dozen trips to Penthouse’s New York offices, Staton said he found the magazine didn’t have the “party time” atmosphere he expected.
“I had this vision of dancing girls,” Staton said. “If you walked into it, you’d think you were in an insurance company.”
Staton was a major figure in Cincinnati’s real estate scene in the 1980s and early 1990s before he retired as chief operating officer of Duke.
He was a key figure in downtown development plans such as Fountain Square West and 312 Elm St.