Penthouse magazine's 2001 Pet of the Year Celebration in a Man-hattan nightclub last month was, to all intents and purposes, business as usual. A crowd of previous pets, sports stars and at least one cast member of The Sopranos joined proprietor Bob Guccione to celebrate Zdenka Podkapova, a "brainy Czech who likes Einstein," according to a press release.
Zdenka, we learned, would like to be reincarnated as a chihuahua "because they are such small, lovely and friendly creatures who never harm anybody, are cuddled and caressed by everyone." But caresses are one thing Penthouse's publisher, General Media, is not enjoying much of these days.
The fate of the privately owned, junk-bond-indebted company best known for publishing areas of the female anatomy that its rival Playboy is shy to visit is a saga that the New York financial media loves to revisit.
Often derided as Mr Macho Man, the original gold-chain-and-hairy-chest swinger, Guccione is, the New York Observer claimed last week, no closer to arresting the decline of a troubled skin-trade empire that is besieged by creditors.
In the latest chapter, Guccione has been forced to sell two plots of land in gambling mecca Atlantic City to help pay off a reported US$28 million of debts. The sale of the plots after creditors threatened to come after his art-filled New York house came as a further signal of trouble.
Two decades ago, Guccione began construction of a US$200 million Penthouse casino, but got only as far as a four-storey steel structure before running out of money. The frame sat rusting ingloriously for years before being torn down.
The once-proud company, with its magazine holdings of Penthouse, Girls of Penthouse and Forum, has fallen on hard times. Circulation of Penthouse, which hit 3.5 million in the 1980s, has fallen to 850,000 as younger semi-pornographic men's mags such as Maxim and FHM have soared.
"Young kids don't need the same erotica any more," says magazine analyst Martin Walker. "The changes in sexual mores in this country mean they have access to the real thing. The magazines that appeal to the market Playboy and Penthouse once owned are lad magazines that are less erotic with no real nudity."
Guccione's company, which brought crotch shots and phone-sex ads to American newsstands, has seen a collapse in revenues. Advertising income now accounts for less than US$9 million a year, versus nearly twice that much five years ago.
According to the NY Observer, General Media's US$56 million in liabilities exceed its assets by more than two to one.
Five years ago, the company showed balance-sheet assets of US$50 million. As of March 31, nearly half of those assets are gone.
Cash reserves, at US$4.8 million, are down 25 percent in just the past three months. Moreover, US$50 million in junk-bond debts that were due at the end of last year were rolled over for a further three on condition the yield would double to 15 percent, after the company auditor warned there was substantial doubt about its ability to stay in business.
According to reports, Guccione has come close to hocking his art collection, sometimes valued as high as US$200 million, which includes paintings by Botticelli, Modigliani and Matisse, to raise capital.
Still, it has been a long, strange trip for the 70-year-old. Born in Brooklyn, New York, Guccione began his career as a painter in Paris -- he recently had a career retrospective of his Impressionist-style work in Las Vegas -- and started Penthouse in London in 1965.
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