The Great Leaders Series: Hugh Hefner, Founder of Playboy Enterprises
The quintessential pajama-clad entrepreneur, Hugh Hefner created Playboy magazine and, over decades, built it into the most successful men's magazine of all time.
Playboy's once-rocketing success might seem no surprise given the advertising truism: sex sells. But never before Hefner had sex sold quite so well. Starting in a decade known for propriety and restraint, Playboy titillated thousands of consumers. At the same time, it challenged federal anti-obscenity laws and brought about their reinterpretation. Despite his company's currently waning cultural cache and its cash hemorrhage, Hefner's vast influences on publishing and sexual culture are still highly tangible.
Born in Chicago in 1926 to strict Protestant parents, Hefner's interests as early as high school presaged his later career. He wrote stories and illustrated cartoons for newspapers through high school, his Army service, and college. While taking a semester of graduate sociology courses at Northwestern University, Hefner wrote a paper lauding the recently released Kinsey report, which advocated a more open discussion of sex in America.
Hefner took a series of copy writing jobs until he landed a gig at Esquire in 1951. When the magazine's headquarters migrated to New York, he asked for a $5 raise. When the request was denied, Hefner began to feel the entrepreneurial itch. After a failed attempt to raise the cash to launch a magazine, Hefner returned to the 9-to-5 grind to support his family. But by 1953 the entrepreneurial urge returned.
To launch Playboy, Hefner managed to gather $8,000 from friends, relatives and a bank loan (the classic yarn is that he used his furniture as collateral). In December of 1953, the first issue hit newsstands, its cover undated since publication of a second issue was such an uncertainty. Hefner anxiously trolled Chicago newsstands to monitor sales but, thanks to his savvy investment in a previously obscure calendar picture of Marilyn Monroe with "nothing but the radio on," nationwide sales of the first issue reached 50,000.
By the time Playboy Enterprises went public in 1971, the magazine was selling seven million copies per month, and the company's assets had grown to include book publishing, a limousine service, a record label, hotels, casinos , and a video production company. The company's other media offerings even diverged from the magazine's adult content; it produced movies such as Roman Polanski's Macbeth, Monty Python's And Now For Something Completely Different, and The Naked Ape, based on the classic sociobiology book of the same name.
The 1980s were a sour time for the company financially, which "Hef" attributes to the decade's conservatism. Though he suffered a stroke in 1985, Hefner didn't cede the position of chairman and CEO to his daughter Christie until three years later. The executive seat passed out of family hands in early 2009 when Christie stepped down, but Hefner continues to play an active role with the magazine. Even though it is still edited from a Chicago headquarters, and Hef's mansion has long since migrated to sunny California, he said in a recent New York Times profile that he approves "every Playmate, every cover, the cartoons and the letters." The same article aptly summarized Hefner's legacy by noting: "As a magazine publisher, he essentially did for sex what Ray Kroc did for roadside food: clean it up for a rising middle class."
Despite having attested in the past that he couldn't live without the magazine, the 83-year-old Hefner may be persuaded otherwise by the company's long streak of unsuccessful quarters. Once valued at more than $1 billion, the current market cap for Playboy Enterprises is roughly $96 million, about one-third of its asking price on the market.
A recent lawsuit by a company investor allegedly claims that while Playboy Enterprises sinks, Hefner has sabotaged deals to sell the company at a price that would be good for shareholders. News sources cite a letter from an investment company: "If you were Hugh Hefner, 81, would you give up the parade of busty blonds, the fancy mansion and the reality TV show for a payout?" The suit also claims that the newsstand price of a Playboy magazine is higher (at $5.99) than its stock (which hovers around the $3 mark).
But in his later years, from the midst of a maelstrom of Viagra, satin sheets, and platinum blonde girlfriends one quarter his age, Hefner is content to bask in a playboy's joy rather than an entrepreneur's angst. He maintains: "This is one of the very best times of my life. It's even better – richer – than people know."
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