Playboy Magazine Outsources Business Operations

By Jake Guidry in News on Nov 24, 2009 9:40PM

The Tribune reported earlier today that Playboy Enterprises, amidst considerable profit losses, will outsource most of its business operations to the company that publishes National Enquirer, Men's Fitness, Star, Muscle & Fitness and other high-profile periodicals. The company, American Media Inc., will take over Playboy's print edition with the exception of editorial content in a five-year deal that Playboy hopes will return the magazine to profitability by the end of 2011.

Playboy has hit the skids during the economic recession, losing roughly $13 million last year and an expected $8 million this year. The outsourcing comes at a critical time for the company which needs to curtail its continued losses. The terms of the agreement, which covers sales, marketing, subscriptions, etc. were not available, but Playboy's cost "would be based in part on ad sales, which AMI now will handle," the Tribune said. Additionally, "most of the 30 full-time Playboy employees working in areas AMI is taking over will be let go, although a few will offered positions with AMI."

The move by Playboy may very well only be the tip of the iceberg. Last week Bloomberg reported Playboy was entertaining sales offers, most notably with London-based Iconix Brand Group Inc., owner of the London Fog clothing line.