They won’t be able to hold extravagant parties at the Playboy Mansion. But longtime entertainment execs Jeff Sagansky and Harry Sloan soon might own what’s left of the Playboy Enterprises empire that Hugh Hefner created.
They’re in advanced talks with Rizvi Traverse about a deal that would include Playboy and possibly other assets the private-equity firm owns. It picked up a majority stake in the company in 2011 as part of a $207.3 million buyout, leaving Hefner with about a third of the equity.
Rizvi Traverse recently bought 3D technology company RealD and has stakes in Twitter, Snapchat, music rights company SESAC, SpaceX and Square Inc.
Playboy has been struggling. The operation publishes Playboy magazine and digital enterprises and licenses the brand for products and venues in more than 180 countries. In 2013, when it sought to refinance $185 million of its debt, Standard & Poor’s gave it a CCC+ rating — a designation that means it comes with substantial risk.
Last year the magazine said it would stop running nude photos, in part to help focus attention on its journalism. Many believe it also was designed to help the website to attract visitors from social networks that bar links to porn.
Rizvi Traverse put Playboy on the block early this year. In August it sold the Playboy Mansion in Los Angeles for $100 million — though Hefner continues to live there.
Sagansky and Sloan have an incentive to negotiate. They have less than a year left to do something with the $500 million they raised last year at Double Eagle, a special-purpose acquisition company (or SPAC). Investors can get their money back in September 2017 if Double Eagle hasn’t used it.
Backers are betting that Sagansky, the former TV exec at CBS and Sony, and Sloan, former CEO of MGM, can find underperforming assets and then use their managerial and dealmaking skills to improve them.
With the funds they raised, plus debt, they potentially could pay about $1.5 billion for a property — and more if they enlist partners.
Reuters first reported the talks with Sagansky and Sloan.