Hefner Uncovers His Skinflint Side

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Legendary playboy Hugh Hefner is pinching pennies and looking for extra cash under the pillows at his Holmby Hills mansion.

The Playboy magazine editor-in-chief has been eyeing his household staff and other asistants for possible cutbacks, sources said.

More surprising: In the last few months he’s resorted to selling tickets to his private parties at the Gothic Tudor estate, according to a person close to Hefner.

The mansion’s hedonistic grounds have long been rented out for corporate events, but Hefner’s private parties have been free to those invited. Now, John and Jane Q. Public can buy their way in to some of those events albeit for a hefty price. Tickets to parties hosted by Hefner sell for $5,000 to $25,000, depending on the event and celebrity guest list.

Tickets to this year’s Halloween party, for example, which in the past has drawn celebrities such as Paris Hilton, are starting at $10,000.

Little known beyond the walls of his estate, the man who founded Playboy in 1953 has never owned the 26,000-square-foot mansion. His company, Playboy Enterprises Inc., purchased it in 1971 for an estimated $1.05 million and leased it to Hefner. He pays $700,000 annual rent.

Now with his company losing money and its stock trading at under $3.50 a share late last week one-third of its value compared with a year ago Hefner has had to cut back in his golden years. The swinger turned 82 in April.

London’s Telegram reported last week that Hef was teetering on bankruptcy and that he is being forced to send some of his resident bunnies packing. Those reports have been swirling around Hollywood for the past several months, but Playboy executives shrug them off as unfounded.

Martha Lindeman, Playboy Enterprises’ senior vice president, said that reports about Hef possibly filing for bankruptcy were “absolutely untrue and absurd.”

Others close to Hefner said that while there have been cutbacks at the mansion, the bunnies were staying.

“They’re not even on the payroll. So, they would be the last to go,” said a person close to Hefner. “The mansion, Hefner and the bunnies are a world-famous brand that could never be duplicated. Nobody’s going anywhere.”

However, some support staff, including maids, gardeners and the like, have been laid off or may be soon, although it is unclear how many are imperiled.

Lindeman would not comment on the matter.


Flagging sales

Still, Playboy Enterprises has been struggling. The Chicago-based company, run by Hefner’s daughter Christie, has reported losses totaling $6.3 million in three out of the last four quarters. That’s due to the poor performance of its DVD, cable TV and print publication divisions.

The company’s flagship U.S. magazine has lost millions of readers and now has a monthly circulation of only 2.6 million. At the same time, its Playboy.com Web site has hardly been a smashing success, drawing just 1.3 million unique visitors who stay for fewer than five minutes, according to Forbes.

In a cost-cutting move, the company shuttered its Glendale-based film and television studios last year, laying off 28 employees and saving the company about $1 million in annual operating costs.

And while the company is not in any danger of going under as of June it had $26.5 million in cash on hand times have been tough for old-line adult entertainment companies as brash hardcore Web sites make millions.

Hefner’s longtime rival and Penthouse magazine founder Bob Guccione lost control of his company, as well as his lavish Manhattan mansion a few years ago. Penthouse, which had a circulation of 5 million at its peak, was down to 320,000 readers at the time.

In an effort to reduce costs and boost revenues, Playboy has outsourced its e-commerce operations and invested in additional online revenue generators such as PlayboyGaming.com, a Playboy-branded online casino and poker site, among other ventures.

“Similar to many other companies in the entertainment and publishing industries, we have witnessed the migration of advertising to other forms of media such as online or to sponsorship of sports franchises like NASCAR,” Lindeman said.

The Playboy name generated roughly $800,000 last year in clothing and other licensing deals, and the company is likely to open a casino or license its name to a casino in booming Macau.

Still, several Wall Street analysts are placing their bets on Playboy as a value stock.

“I’ve place a ‘buy’ on Playboy because I believe that the stock price has hit rock bottom,” said Anderson & Strudwick analyst Steven Marascia. “I’m suggesting that investors get in and ride it out until the economy turns around and men open up their wallets again.”

Meanwhile, Hef, despite any financial troubles and his advanced age, has seen his pop culture star rise.

The first peek into the private goings-on at the mansion came with E! cable television series “The Girls Next Door,” featuring Hef’s handpicked group of gals.

The hit series focuses on the lives of Hefner’s three girlfriends, who live with him at the Playboy Mansion: Holly Madison, Bridget Marquardt and Kendra Wilkinson. Hefner is often on the show along with various Playmates and other celebrities.

And now that the cameras have intruded into the private lives of Hef and his girlfriends, selling tickets to the pajama parties is a natural extension of the media circus that the mansion has become.