CLIENT PROFILE: Sex appeal after 50? Playboy PR turns it up.

It isn't often that Playboy's PR department finds itself in agreement with feminist organizations, but when the magazine's Romanian edition recently ran a feature titled, 'How to Beat Your Wife ... Without Leaving Marks on Her Body,' the PR division leapt into action.

PR chief: Martha Lindeman, SVP, IR and corporate communications
Director of corporate communications: currently vacant
Divisions Entertainment (TV): Scott Barton, PR director; Frank Marchesini, PR manager
Publishing: Cindy Rakowitz, VP, public relations Playboy.com: Laura Sigman, PR manager
Casino Gaming: Bill Farley, PR director
Product Marketing (apparel): Noelle O'Connor, PR manager
External PR agencies: Brainerd Communications (IR); Smith PR (entertainment agency); Baker Winokur Ryder.

It isn't often that Playboy's PR department finds itself in agreement with feminist organizations, but when the magazine's Romanian edition recently ran a feature titled, 'How to Beat Your Wife ... Without Leaving Marks on Her Body,' the PR division leapt into action.

Cindy Rakowitz, who oversees the publishing division as VP of public relations, quickly put a release up on PRNewswire expressing chairman/CEO Christie Hefner's outrage over the article. She then told The New York Times that the women of Playboy were 'incensed and unhappy' about the story. Hefner apologized to Romanian women for the incident and dispatched the head of international editions to reprimand the editor, who claimed it was a joke.

The incident shows how easy it is to step outside the boundaries when you are dealing with sex. Eight-year company veteran Martha Lindeman runs the PR operations as SVP of IR and corporate communications and explains that Playboy is a challenging brand to work with.

To the eternal 'Is Playboy pornography?' question, Lindeman responds, 'People have these knee-jerk reactions. They have to determine what is porn on their own. Is nudity pornography? You have to re-educate people.'

The company is divided into six business groups: publishing, entertainment, product marketing, catalogs, casino gaming and playboy.com, with a separate PR manager for all but the catalog group. Scott Barton in LA looks after the cable TV channel, which falls under entertainment. Playboy magazine comes under Rakowitz, Noelle O'Connor looks after product marketing and Bill Farley oversees the gaming unit, which just announced the launch of a UK-based casino in a joint venture with Ladbrooks.

Holes left to fill

Lindeman is currently filling a number of holes in the PR lineup ever since director of corporate communications Rebecca Theim and the publishing division's director of corporate communications, Diane Stefani, both left for other ventures. To help fill the void, the magazine recently named Alison Raleigh to the newly created position of East Coast publicity director. In addition, Playboy Enterprises is recruiting a PR agency to help raise the profile of its online division and has decided to bring publicity for its infamous Playboy Mansion parties in-house.

Theim says that when she worked at Playboy, the most significant PR challenge was granting appropriate interview requests. She says a major cable news network wanted to do a focus on the adult entertainment industry, but Playboy declined to be included because it steers clear of stories about that category. '(Playboy is) entertainment for grown-ups. The phrase 'adult entertainment' is so loaded in today's marketplace,' she says.

Playboy Enterprises is currently preoccupied with flashing its goods to Wall Street in preparation for an IPO of Playboy.com, which garnered 112 million page views in January 2000. The company spun off the online unit in January 1998 and is looking to raise $50 million from the public offering, slated for June.

In preparation for the IPO, Playboy Enterprises hired Michael Bacco as senior vice president of sales and marketing in late April. Bacco will oversee the publicity activities of PR manager Laura Sigman, who joined in February, and the yet-to-be-hired PR agency.

Robert Routh, SVP of cable and entertainment media at investment bank Ladenburg Thalmann, likes what he sees: 'This is a company run by women; it is not exploitative in any way. They are good at positioning it as a lifestyle stock.' Analysts have said that the convergence of Playboy's cable and Web offerings has been slow but steady.

So far, losses at Playboy.com have dragged down Playboy Enterprises' stock. At press time the company was trading just above its 52-week low of $15 (it peaked at $35) on the NYSE. Playboy Enterprises' said 1999 profits fell 59% to $1.7 million, with the online business losing $9 million on revenues of $16 million.

But those figures don't worry Routh, who says Lindeman is one of the best IR executives in the entertainment industry. At the end of April, the company let Wall Street know that first quarter losses would increase as a result of increased investments in the online division. Routh says the IR team was up-front with its numbers: 'They put out the online losses ahead of earnings and they didn't need to do that. They are very straight and responsive.'

Routh dismisses the poor performance of the magazine, which shed 5.5% of its circulation in one year. He describes the title as nothing more than an ad campaign for the rest of the businesses. Playboy has featured interviews with everyone from Bill Gates to Cindy Crawford, but circulation dipped from 3.3 to 3.1 million between December 1998 and December 1999.

Lindeman hopes that upcoming covers of actress Bijou Phillips and supermodel Caprice will help boost figures.

Meanwhile, upstart lad magazine Maxim, also busy building a men's lifestyle portal, has seen circulation soar 126.7% over the same period, though its total circulation is about half that of Playboy.

The 'Maxim' problem

Kenneth Li, who has covered the rivalry between the two for The Industry Standard, says, 'Maxim is the new Playboy. I don't know if the Playboy reader exists anymore.' But he does praise the Playboy PR team, which he says has always been responsive and accessible. 'If you spend the time with them, they articulate their mission with the proper spin,' he says, adding, 'whether you believe it is another matter.' Li points out that while Playboy argues they are not in the porn business, the firm's acquisition of cable TV channel Spice - which shows more hard-core material - says otherwise.

The PR team is also sitting tight in anticipation of a Federal Communications Commission ruling about whether it has the right to broadcast its output during the day. Arguments for liberating cable laws were made in November and a judgment is expected shortly.

Lindeman has tremendous support from founder Hugh Hefner and daughter Christie. 'Hef was way ahead of his time in terms of PR,' Lindeman says.

'He was doing events and promotions in the 50s, like painting a huge white rabbit on a company plane at O'Hare. He always saw the value of having the press understand what he did.'

While Hef takes on most of the personality interviews, his daughter is tightly focused on the financial media and in the last few weeks has appeared on CNBC and CNNfn and has given interviews to Fortune, Forbes and BusinessWeek.

With the feminist movement in decline, Playboy has seen little in the way of direct opposition of late. But when Christie suggested to the Chicago City Council that a street be named after her father, there were still plenty of vociferous objectors. After a day of debate, she got her way and Hugh got his, at the corner of Michigan Avenue and Walton Street.

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