Paul Quatrochi offered Guccione $20 million for his Picasso in the late eighties. He turned the offer down, saying the painting was worth $40 million. Poor timing. The bills for the excesses had been piling in, and Sotheby’s repossessed the canvas in 1992, selling it to Jafri, the brother of the sultan of Brunei, for $9 million. “It was a fantastic investment!” Guccione says with defensive ebullience. All the modern art went. The Degas too. “I miss that the most,” he says.
It is widely believed that it was the deluge of porn on the Internet that scuppered Penthouse. Not so, says Guccione. “In 1992, I had colossal tax problems. I had to borrow $80 million. And I had never borrowed a dime in my life,” he says. “I paid the interest every year without fail. I never missed a payment. I reduced it to $50 million.”
A couple of years ago, the company agreed to start paying off the principal as well as the interest. Guccione claims that he was incapacitated with cancer at the time and wasn’t party to the negotiations.
“Those bond-holders literally strangled us,” he says. “They sucked every penny out of the company. I was paying something like $12 million a year. It became too much.”
Could he have survived Internet porn?
“Sure. We were doing very well on the Internet ourselves. What I was doing was diversifying in my own industry to allow for these things that were harming us in terms of lost sales. We were expanding in some areas. Like clubs. Gentlemen’s clubs.”
Guccione’s other strategy to combat the new hard-core has been more questionable. In the later nineties, he decided to up the ante. “Pees on Earth,” the title of a double-page spread in December 1996, is self-explanatory. Urination, fetishwear, and “facials” have been on the menu monthly.
“That’s Mr. Guccione,” Lainie Speiser, the magazine’s director of promotions, says. “He likes to move it forwards. He thinks he’s taken it to the next level.” Tony Guccione says, “He loves to push the envelope. He’s a very defiant, aggressive person.”
Shortly before his departure, Tony Guccione advised a makeover for the magazine, a strategic toning down. Others agreed.
“It’s disgusting! I would say, ‘Bob, do we really need these pictures? They’re all about humiliation!’ ” says a former executive.
“He’d say, ‘That’s what readers want!’
“We would say that it wasn’t what the readers wanted, and it certainly wasn’t what the advertisers wanted.
“Bob would say, ‘When people tell me I’m wrong—that’s when I know I’m right.’ ”
The result was catastrophic. Bill Clinton, of all people, had Penthouse tossed from military stores. And it is even possible that the publisher didn’t take much pleasure in executing the strategy himself. He used to shoot a few pictorials every year but had not done so for six or seven years.
Why, I ask?
“I got tired of it,” he says, barely audibly.
Penthouse declared bankruptcy in August. Those circling around the property included the inevitable Larry Flynt, Jenna Jameson, and a Mexican property developer, who announced plans to build a Penthouse-themed resort. All wanted to keep Guccione in a prominent role.
Two weeks before Christmas, a hitherto unheard-of investors group, PET (as in Penthouse Pet) Capital Partners, who had been snapping up most of General Media’s bonds since late November, attended the bankruptcy-court hearing. “We appeared out of nowhere. This is a group of people I have worked with before,” says Marc Bell, a 36-year-old New York entrepreneur, now based in Boca Raton, who headed up the group. General Media had worked out a reorganization plan. Marc Bell’s group is prepared to pony up $50 million. They will learn if they’ve prevailed on February 26.
Bell is no stranger to media. In the early nineties, he published a health-and-fitness magazine, Vertex, and two giveaways, New York Weekly, which he describes as “the largest free-circulation newspaper on the Upper East and West Side,” and New York Metro Computer Press. Why Penthouse?
“It needed repair, it needed refunding,” says Bell, “but it’s a very well-known trademark. We’re going to look at various aspects. And Bob is going to stay with the magazine.” Bell envisions not so much a brand-new Penthouse as a return to an older model. “The goal is to try to bring the magazine back towards a wider audience. To make it less hard-core, to bring back more artistic photographs,” he says.
Bob Guccione will be the publisher emeritus for ten years, and editorial consultant, with a salary of half a million dollars a year. Whether the autocratic publisher will be amenable to taking instruction is another matter. The long-running battle for the townhouse may also be inching toward resolution. This had been spared from the bankruptcy of General Media, as his personal property, but he had mortgaged both it and the country house long ago to a New Jersey company, Kennedy Funding, when he was financing the casino in Atlantic City. Kennedy Funding now owns the townhouse, and Guccione may be evicted as soon as February 6. Robert Feinstein, Bob Guccione’s lawyer, takes a more sanguine view. “Either there is going to be the mother of all litigations or we’ll reach a deal,” he says, cheerfully.
The day before we were to photograph Guccione, I called to confirm the time and was startled to hear he had made a rare foray from East 67th Street—he had gone out for a haircut. A shoot is a shoot.
Guccione gave me a tour as the photographer was setting up. But even as he catalogued the details, he acknowledged that his hold on the place was precarious. “I’ve never held on to my money. I gave it away,” he said. Then he struck a pose between one of Napoleon’s black lead sphinxes and the much-mended classical sculpture of the god of wine, Bacchus. “I’ve managed to hold on to a few things,” he said, managing a smile—a fainter smile than would be allowed a Penthouse Pet.