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Playboy: ClubJenna Last Piece of the Puzzle

CHICAGO– Playboy Enterprises Inc. has headed deeper into hardcore adult entertainment with a deal to buy Club Jenna, a business founded by porn star Jenna Jameson, for an undisclosed sum.

The acquisition, which was announced after Thursday’s closing bell, brings Playboy Enterprises, Inc. a film production business, a video library, a group of Web sites and a DVD retail distribution deal.

Playboy Chief Executive Christie Hefner said Club Jenna is “skilled in the creation of narrative-based, long-form adult entertainment,” and will round out a company portfolio recently enhanced by the acquisition of online content and distribution firm ICS.

Starting about 10 years ago, Playboy moved away from its publishing base, aggressively expanding into television and the Internet as its ad sales and circulation at the flagship magazine that started it all fell into a prolonged slump.

“I think this is the last piece of the puzzle,” Hefner said.

Playboy already distributes hardcore adult entertainment via its Spice TV channel but the Club Jenna deal will give it the ability to produce its own — a key to Hefner’s strategy. She expects to rapidly ramp up film production, rolling out about 30 features in the first year and will use them not only for DVDs but to sell through TV channels, video-on-demand services and even mobile phones.

“It’s about wanting to own, rather than license, content,” she said.

Playboy declined to provide revenue, volume or margin figures for Club Jenna, although Hefner said the unit would immediately add to the company’s bottom line.

Phoenix-based Club Jenna has about 18 employees and is run by Jameson and her husband, Jay Grdina. Under the deal, they will retain rights to the merchandising and licensing of Jameson’s “persona,” but Playboy now has “oversight and approval” power and owns clubjenna.com, which sells branded merchandise.

Although Club Jenna’s work is known for being more explicit than Playboy fare, Hefner said the material is no different from what is already running on some channels owned by Playboy and competitors like New Frontier Media (NOOF :new frontier media inc com

Besides, “Jenna Jameson has clearly crossed over from being an adult star to being a mainstream star,” Hefner said. “I think the whole culture has crossed over.”

Shares of Playboy ended the regular session up 5 cents at $9.14. End of Story

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