NEW YORK: Sex isn't selling for 70-year-old porn tycoon Bob Guccione. His company, Penthouse Magazine, is on the skids, mired in debts that threaten the future of the group.
In the company's annual report, filed last week, Grant Thornton, its auditor, says there is 'substantial doubt' that the company can keep going.
The threat to Guccione's empire comes despite the boom in internet pornography and the millions made by pornographers in video and DVD.
Twenty years ago General Media International, Penthouse's parent company, would have fetched half a billion dollars, say media analysts. But, since then, Guccione's empire has been in decline.
According to the latest financial statement posted with the Securities and Exchange Commission (SEC), General Media owes $51.5m and the company has pledged 'substantially all' its assets to pay that debt.
The loan is fixed at 15% a hefty rate for a corporate loan and it seems unlikely that it will be able to pay the money back.
According to the SEC filing, General Media?s liabilities exceeded its assets by $22.3m, as of December 31, 2001. Guccione, who has suffered throat cancer, said: 'Penthouse remains one of the world's best-recognised brand names, and we're confident in our business's long-term viability.'
He added that a number of steps had been taken to improve the company's position. Media analysts believe that General Media is looking to do a deal
with a rival. Guccione refused to comment.
Guccione has put his limestone mansion in Manhattan up for sale for a reported $40m. His estate agent says the move reflects Guccione's desire to live somewhere smaller, rather than any financial pressure.
Guccione uses the 27,000 sqft house to entertain clients, and his company has been paying up to $600,000 a year on its upkeep. The sum is in addition to Guccione's $1.7m annual salary.
The house also contains a $2m art collection, which has been put up as collateral against loan payments. General Media has been dragged down by falling sales and rising debts.
The company lost $10m last year, compared with a $12m profit in the previous year. Debt covenants stop the company from increasing its loans. (The Sunday Times)
In the company's annual report, filed last week, Grant Thornton, its auditor, says there is 'substantial doubt' that the company can keep going.
The threat to Guccione's empire comes despite the boom in internet pornography and the millions made by pornographers in video and DVD.
Twenty years ago General Media International, Penthouse's parent company, would have fetched half a billion dollars, say media analysts. But, since then, Guccione's empire has been in decline.
According to the latest financial statement posted with the Securities and Exchange Commission (SEC), General Media owes $51.5m and the company has pledged 'substantially all' its assets to pay that debt.
The loan is fixed at 15% a hefty rate for a corporate loan and it seems unlikely that it will be able to pay the money back.
According to the SEC filing, General Media?s liabilities exceeded its assets by $22.3m, as of December 31, 2001. Guccione, who has suffered throat cancer, said: 'Penthouse remains one of the world's best-recognised brand names, and we're confident in our business's long-term viability.'
He added that a number of steps had been taken to improve the company's position. Media analysts believe that General Media is looking to do a deal
with a rival. Guccione refused to comment.
Guccione has put his limestone mansion in Manhattan up for sale for a reported $40m. His estate agent says the move reflects Guccione's desire to live somewhere smaller, rather than any financial pressure.
Guccione uses the 27,000 sqft house to entertain clients, and his company has been paying up to $600,000 a year on its upkeep. The sum is in addition to Guccione's $1.7m annual salary.
The house also contains a $2m art collection, which has been put up as collateral against loan payments. General Media has been dragged down by falling sales and rising debts.
The company lost $10m last year, compared with a $12m profit in the previous year. Debt covenants stop the company from increasing its loans. (The Sunday Times)
