Playboy Magazine Outsources Business Duties

An iconic Chicago magazine is seemingly in its death throes

Red Light Night

Playboy Enterprises Inc. has agreed to outsource most of the business operations of its namesake magazine, as it seeks to stem losses and restore the cachet that helped embed the brand in the popular culture.

Under the deal, reached last week, Playboy will turn over all the magazine’s operations except the editorial ones to American Media Inc. AMI, of Boca Raton, Fla., publishes more than a dozen titles, including Star and Men’s Fitness. The five-year partnership will help return the magazine to profitability by the end of 2011, said Scott Flanders, chief executive officer of Playboy Enterprises.

Playboy and AMI wouldn’t disclose the financial terms of the deal. What it costs Playboy will be based in part on advertising sales, which AMI is taking over. But the partnership will significantly reduce Playboy’s costs, Mr. Flanders said. Playboy has roughly 30 full-time employees working in these areas, and while some will be offered jobs at AMI, most will be let go.

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Doesn’t bode well for those who read Playboy “just for the articles”, editorial operations will be the next to be downsized.

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