Penthouse busts out an $11.2M sale deal
THE owner of Bang Bros won the auction for Penthouse on June 4, agreeing to pay $11.2 million for the publishing, broadcasting, digital and licensing rights.
The owner of more than 43 porn sites, including Bangbros.com, is WGCZ Ltd S.R.O., which beat out underbidder Pornhub as well as Larry Flynt’s Hustler and Adam Levin’s Dream Media.
The mystery owner takes over on June 11.
Levin’s company had submitted what is known as a stalking horse bid of $3 million after first picking up the defaulted $10 million loan note from ExWorks Capital for an undisclosed amount.
Hamid Rafatjoo, an attorney representing the unsecured credi- tors committee, said, “To go from $3 million to $11.2 million, I think is a great result. We’re looking forward to monetizing the other assets and wrapping this thing up.”
Still to be liquidated is a digital coin company, Vice Industry Tokken, that Penthouse Global Media invested in.
The assets of Penthouse Global Media include all the back content of the X-rated magazine, whose most recent cover featured Stormy Daniels (right), the adult-film actress.
The assets also includes the cult classic film “Caligula,” which Penthouse founder Bob Guccione Sr. made in 1979 starring Helen Mirren, Malcolm McDowell and Peter O’Toole, among others. Guccione lost control of the publishing firm and died in 2010.
Penthouse Clubs, which operate in nine cities under a licensing deal, were sold off earlier for $1.2 million to the group that owns the license.
Rafatjoo said that there are probably $3 million to $5 million in unsecured creditors. “I don’t think they will be paid in full.”
He said that the time frame for unsecured creditors to come forward has not yet closed and he hopes the final sale of other assets brings in several million dollars more.
Penthouse Global Media had declared Chapter 11 bankruptcy in January, a little more than two years after a group headed by Chief Executive Kelly Holland had bought the title and resurrected the print edition of the 53-year-old magazine that was founded originally to be a more explicit hard-core version of Hugh Hefner’s Playboy. At its peak, Penthouse sold more than 5 million copies a month to Playboy’s peak of 7 million.
Holland said she is “extremely happy with the outcome.”
She told Media Ink that she is staying on under the new owners.
“With the company debt-free, we are ready to grow,” she said.
“The new owners are committed to maintaining the four business units — publishing, broadcast, licensing and digital,” she added.
Overnight star
Author Lara Prescott has turned into an overnight millionaire after her debut novel, “We Were Never Here” — a fictionalized account surrounding the writing of the book “Dr. Zhivago” — triggered a spirited auction that fetched her an advance estimated to be close at close to $2 million.
The auction, run by Folio Literary Management, attracted interest from 21 different imprints, and the Knopf imprint of Penguin Random House eventually landed the highly sought-after complete manuscript.
Sources told Publishers Weekly that the agency left some of the money on the table in deciding to go with the Knopf imprint, because it was not the highest bidder for ther work.
“It was a good advance, but not enough to buy a Fabergé egg,” warned Knopf spokesman Paul Bogaards.
Jeff Kleinman at Folio Literary was also tight-lipped when it came to the size of the advance. “It’s a beautifully written book and she’s a lovely writer.” The book was also sold to 11 overseas markets with auctions for another six still underway at press time on Thursday. Knopf was the original publisher of “Dr. Zhivago.” Prescott’s novel centers around the CIA efforts to translate the book into Russian and smuggle it into the country, hoping it would paint a harsh picture of communism. It’s the second high-stakes auction in the book world in recent weeks. Sources said that just before the Memorial Day break, the Flatiron imprint of Macmillan agreed to pay a $1 million advance for “American Dirt” by Jeanine Cummins, a novel about a mother and son crossing the US border from Mexico in an effort to flee violent drug gangs in their native land.