Playboy Goes Public

Ever since Playboy invented its formula of sex and pop hedonism in the 1950s, moneymen have wondered just how much cash the magazine and its many offshoots have earned for Hugh Hefner. The answer came last week as Playboy Enterprises, Inc. prepared to make its first public stock offering and filed required financial statements with the Securities and Exchange Commission. The underwriter, Loeb, Rhoades & Co., set a "maximum offering price" of $25, meaning that the stock will probably go on the market in November for that amount or slightly less. If it is close to $25, Playboy's creator and chief stockholder will have a paper worth of about $168 million. That makes Hefner, at 45, one of the half a dozen or so richest self-made men in America.

Meanwhile, at the Mansion. Of the 1,159,562 shares that Playboy Enterprises plans to sell, 300,000 come from Hefner's personal portfolio. He will still retain some 6,700,000 shares, or 71.9% of the total. The tiny 11¾¢ annual dividend on each share provides Hefner with about $800,000 a year to go with his salary of $303,847. As chairman, president, editor and publisher, he has another $372,924 tucked away in his profit-sharing account. In addition, his mansions in Chicago and suburban Los Angeles are owned by the corporation and used for "promotional activities."

The prospectus shows that Playboy is still the most profitable part of Hefner's expanding empire. The magazine accounted for more than half the corporation's $132 million revenue last year, and for most of its $9,200,000 net income. Playboy Enterprises' other divisions are not doing nearly so well. Pretax profits from the 17 key clubs dropped slightly last year from $3,400,000 to $3,200,000. The company's hotel operations dipped into the red and showed a loss of $1,700,000 in 1970; a $2,200,000 deficit at the Playboy Plaza in Miami more than offset profits from the company's other resort hotels. Hefner's newest venture, a plush resort hotel in northern New Jersey 50 miles from downtown New York, is scheduled to be completed in December. Its cost, originally estimated at $21 million, is now figured in the Playboy prospectus at $29.5 million.

The high costs of the New Jersey resort have not slowed Hefner down. His company started a music-publishing and phonograph-record division last month. Hefner has also plowed more than $3,000,000 into financing Director Roman Polanski's film version of Macbeth, and is looking for other movies to bankroll. Next year Playboy will go international, starting European editions in French, Italian and German under the guidance of Playboy executive and long-TIME Staffer Michael Demarest. About two-thirds of the material and most of the nudes will be from the U.S. Playboy, although Hefner says that he intends to tap European talent as well.

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