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Penthouse (General Media)

From Invertopedia, the encyclopedia of how things fail

Entry 104. An analysis built from the public record, not an insider account. Spot an error? Tell us.

Penthouse was an adult magazine that, at its peak, sold about 5 million copies a month, a figure that had slumped to about half a million by 2004[1]. Its publisher, General Media, put itself into Chapter 11 on August 12, 2003[2]. It was bought out of that bankruptcy by FriendFinder in 2004[4], whose publisher went bankrupt in September 2013, and in 2016 its owner announced a move from print to digital[4][5].

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Contents
  1. 1What happened
  2. 2The kill shot
  3. 3References

What happened

Before 2003The publisher spends heavily outside the core title: an Atlantic City casino that never opened ($160 million) and the magazines Omni and Longevity (about $100 million).[3]
Aug 12, 2003General Media, Inc. closes a $5 million debtor-in-possession credit line with a select group of its secured bondholders.[2]
2004FriendFinder buys Penthouse after the bankruptcy.[4]
Sep 17, 2013FriendFinder Networks, which owns Penthouse, files for bankruptcy.[4][5]
Jan 2016Penthouse says it is giving up its print edition.[4]

The kill shot

The Guardian's account blamed a publisher who moved from one misconceived project to another while the magazine that paid for them lost most of its buyers.

The Atlantic City casino was stillborn, partly because one homeowner on the site would not sell, and the loss was $160 million[3]. Omni and Longevity lost about $100 million between them[3]. CNBC noted that adult magazines on the whole had largely been relegated to the sidelines[4].

References

  1. ^ “Boom and bust”. The Guardian (The Observer), Feb 1, 2004. Peak and 2004 circulation.
  2. ^ “Form 8-K, Penthouse International, Inc.”. SEC filing, Aug 12, 2003. The Chapter 11 filing.
  3. ^ “Boom and bust (part two)”. The Guardian (The Observer), Feb 1, 2004. Casino, Omni and Longevity losses.
  4. ^ “Penthouse to shutter print magazine, go all digital”. CNBC, Jan 15, 2016. FriendFinder purchase, 2013 bankruptcy, move to digital.
  5. ^ “Penthouse magazine owner files for bankruptcy”. Los Angeles Times, Sep 17, 2013. FriendFinder's 2013 filing.
Categories: Corporate · Magazine publisher · Chapter 11 in 2003 · Cause of death: diversification · From the public record