Playboy Enterprises: Worthless, Part 3

3. Club Jenna is Worthless.

If you remember far enough back to 2007, when it was announced that Playboy was going to buy out Jenna, there were all these wild speculations...what was the company worth...her name alone was worth $30MM...the talk of all the "prefilmed" movies of her and Jay so that she would never have to shoot new content. You would think this purchase was something that was really going to revive the business. Well, then it was all said and done, the deal went like this: Club Jenna owners got about $17MM in cash over 4 years, PLUS they would get even more if the company met some sales goals.

Anybody want to guess how much Playboy has had to pay in additional royalties for the past few years? That's right, absolutely nothing. Now, on one hand, you could say, Well, they don't have to pay for any new content. True, except now they are the de facto owners of the company. They have to pay for all the expenses, such as hiring the whores, paying for production space, etc. Playboy thinks so highly of Club Jenna now, they mentioned it exactly twice by name in their 2008 annual report, itself almost ninety pages long.

Twice.

Of course, the exact results are buried in with a bunch of other business units--they aren't ready to make that knowledge public. All the same, it's not hard to figure out why the enterprise isn't paying off like they envisioned: Jenna got her money, and like any other two-bit whore, ran away as fast as she can so she could squeeze out some MMA-babies and live like a queen for another decade or so. The current list of whores at CJ is pretty depressing: Sophia Rossi, Jill Kelly, Ashton Moore...women with plastic faces and overstuffed tits. Well, I suppose for a magazine that purchases photo retouching ink by the gallon, maybe it's not such a stretch. Just imagine paying your fired CEO Christie Hefner $2MM to go away quietly after spending $17MM two years ago, and then having to include this line in your financial report about it, "No earnout payments have been made through December 31, 2008, and no future earnouts are expected as we are exiting the DVD business."

Find PLA's annual report here: http://www.sec.gov/Archives/edgar/data/1072341/000116923209001548/d76389_10-k.txt