Playboy CEO Exits as Magazine Explores Sale
May 31 2016 - 7:30PM
Dow Jones News
Playboy Enterprises Inc. Chief Executive Scott Flanders, who
orchestrated the storied magazine's move away from nudity, is
leaving as the company explores a sale.
Ben Kohn, managing partner at Rizvi Traverse Management, has
been named interim CEO, the company announced Tuesday. In 2011, the
private-equity firm took Playboy private alongside founder Hugh
Hefner, who holds a roughly one-third stake in the company,
according to people familiar with the matter.
Mr. Flanders, who replaced Mr. Hefner's daughter as the
company's top executive in 2009, is joining eHealth Inc., a private
health insurance exchange, as its CEO. He will remain on Playboy's
board of directors and retain an ownership stake in the company.
His stake in Playboy amounts to about 5% to 6%, according to a
person familiar with the matter, while Rizvi Traverse owns the
majority.
"Scott has expressed his desire to return to the helm of a
public company and this is an incredible opportunity for him," Mr.
Kohn said in a statement.
The executive shake-up comes shortly after The Wall Street
Journal reported in March that the famed magazine, a cornerstone of
hedonism for generations of American men, hired investment bank
Moelis & Co. to look into a possible sale. Last year, the
company generated $38 million from its media unit and $55 million
from its licensing business, according to a document reviewed by
the Journal.
People familiar with the sales process have said Playboy could
fetch more than $500 million if it is sold in its entirety,
including the Playboy Mansion. But the company is also looking into
a minority investment or selling smaller chunks of the company,
such as its licensing business or the mansion, which has been on
the market since earlier this year, according to a person familiar
with the matter. The deal to take the company private five years
ago valued Playboy at $207 million.
During his tenure, Mr. Flanders cut costs and retooled Playboy's
strategy away from its more unsavory roots, selling off some TV and
digital properties to an internet porn company and striking deals
with fashion companies.
Playboy's March issue was the first in its history to ditch
nudity, though the company's website has been nudity-free since
August 2014. Earlier this month, the company unveiled a slate of
web video series covering topics like tech, food and gaming, part
of a larger effort to make the brand more approachable for
advertisers.
Circulation for Playboy, which was founded in 1953, has dwindled
since its cultural zenith. The publication has a circulation of
about 800,000, down from its peak of 5.6 million in 1975, according
to the Alliance for Audited Media.
Write to Steven Perlberg at steven.perlberg@wsj.com
(END) Dow Jones Newswires
May 31, 2016 19:15 ET (23:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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