I found this as well ..
Penthouse raises $48 mn to battle Playboy
Penthouse Media Group Inc., publisher of the men’s magazine, raised $48 million in part to fund an adult entertainment broadcast network that would compete with Playboy Enterprises Inc.’s Spice and New Frontier Media Inc.’s Erotic.
Penthouse raised $15 million in preferred stock and $33 million in bonds, according to a private-placement notice filed September 6 with the US Securities and Exchange Commission. The company will use $26.2 million to repay debt, including money owed to Chief Executive Officer Mark Bell’s buyout firm in Boca Raton, Florida. It will devote $11.5 million to developing the new network.
New York based Penthouse Media has been changing the focus of its magazine from pornography to less-racy men’s lifestyle articles. Television is another leg of Bell’s strategy to turn around the closely held company, which his firm bought out of bankruptcy protection.
“The goal is to make high quality, very different types of movies from what people see now,’’ Bell said in an interview. “We are trying to differentiate ourselves from the Spice network at a competitive price.’’
The network would distribute programming to viewers via video-on-demand, pay-per-view and cable channels, said Bell, 38. The network is still in development and the company hasn’t decided how much it would charge for the services.
Swiss Hedge Fund
Absolute Return Europe Fund, a hedge fund with offices in Zurich, Switzerland, invested in some of the securities sold through the private placement, according to the SEC filing.
Florian Homm, a German money manager who has worked with Bell on other transactions, runs the hedge fund.
Bell’s buyout firm acquired Penthouse through a bankruptcy proceeding in October 2004 after buying up 89 per cent of the bonds issued by the publisher’s former owner, General Media Inc. Bell’s firm foreclosed on the company after failing to find a buyer for its General Media bonds.
Penthouse founder Bob Guccione first published the magazine in London in 1965 and in the US in 1969. The magazine’s circulation rose to 4.7 million as it published more-explicit photos than rival Playboy.
That strategy later backfired as some newsstands, on which Penthouse relied for the bulk of its sales, stopped carrying the magazine. At the same time, other men’s magazines began offering even more explicit material.
Beginning of End
“A proliferation of highly explicit magazines hit the
shelves and that was the beginning of the decline of Penthouse,’’ said Robert Routh, a media analyst at the brokerage Jefferies & Co. “It never recovered in terms of overall circulation.’’
Monthly circulation stands at 350,000, Bell said. Now that Penthouse is geared toward men’s lifestyle, which involves less nudity and more emphasis on editorial content, “subscriptions are finally going in the right direction,’’ he said. The magazine has recovered lost space on newsstands, Bell said.
Advertisers prefer men’s lifestyle to adult entertainment, said James Kobak, a magazine analyst who says he served as a consultant to both Guccione and Playboy founder Hugh Hefner.
Switching from one to the other isn’t easy, he said.
“The people who are going to buy it think of Penthouse as the way it has been for the last 40 years,’’ Kobak said. “It’s hard to tone it down.’’
http://www.financialexpress.com/late...tent_id=102298