A lot of people thought Bob Guccione was crazy to try to take on Playboy, which had a virtual stranglehold over the men's magazine market. But Guccione believed there was plenty of room for a competitor. He was right.
In October 1965 Guccione published the first issue of Penthouse. The magazine offered a much more revealing look at the female body and took a more sensational, tabloid-style approach to its editorial coverage than Playboy. It was a monumental success, generating more than $3.5 billion in revenue over the life of the publication and turning Guccione into one of the richest men in America.
Guccione then lost it all and is now reportedly broke. His downfall began in the 1980s when he made series of bad investments in everything from a small-scale nuclear fusion reactor to an Atlantic City casino. At the same time, men's magazines came under attack from the Reagan administration, which put pressure on convenience store chains to stop selling pornographic material. Guccione shot back by featuring increasingly explicit pictorials, which alienated many of his loyal readers. The Internet and pay-per-view cable further eroded his circulation. By 2003 Penthouse was bankrupt, and Guccione was out of a job. A group of investors led by Marc Bell acquired the debt and control of the company in 2004 and began the process of rebuilding the brand and expanding its portfolio of offerings.
In March 2005 Bell hired Joshua Bressler to help steer the rebuilding efforts from a legal standpoint. Bressler joined Penthouse after spending more than 13 years as a copyright and trademark lawyer at the New York offices of Kenyon & Kenyon, Schulte Roth & Zabel and then Sullivan & Cromwell. As Penthouse's general counsel, Bressler not only manages the company's copyright and trademark issues, but also counsels management on acquisitions, oversees litigation and negotiates commercial agreements.
Q:How did you end up at Penthouse?
A:One of the lawyers at Schulte with whom I worked got a call from his cousin, who was a recruiter in South Florida. He asked my colleague whether he would be interested in the GC job at Penthouse. My colleague told him there was no way his wife would ever let him work there, but he did know someone who would be interested and gave the recruiter my name.
Q:Was your significant other supportive of your decision to go to Penthouse?
A:My soon-to-be fiancee was an important catalyst to my becoming comfortable with the idea of working at an adult entertainment company. Neither of us is necessarily a consumer of adult products. However, she believed the job was made for me. She convinced me there was no one better suited to do this job.
Q:What was your impression of the publication?
A:I had not seen an issue of Penthouse since college. So my impression was more of a historic image of the magazine. I bought a copy of the magazine before the interview. The content was consistent with what I had expected.
Q:Were you comfortable with the idea of working for an adult entertainment company?
A:The concept of working for Penthouse was something I had to get comfortable with. There wasn't anything compelling to me personally about working for an adult entertainment company. There were several factors that helped me ultimately get to that place. Personally, my values gravitate toward a firm protection of speech and the expression of it. So I think politically my ideology fits with the company. The other issue was that job was a perfect match in terms of my experience.
A:The Penthouse brand is known throughout the world. It is one of the premier brands in its space. As a trademark lawyer, that presents challenges and opportunities that very few brands can offer. We also are a content company. As a copyright lawyer--and as a person skilled in rights, clearances and rights negotiation--that's an ideal match. The company also was in the process of rebuilding, so there was a lot of transactional work going on. And that was of great interest to me.
Q:What kind of transaction issues were you involved with?
A:Well, we do a lot of licensing agreements, which are the bread and butter of our practice. We also have had opportunities to acquire assets that fit well with our business strategy. For example in April 2006 we acquired almost all the assets of Jill Kelly Productions Inc. [a producer of adult films founded by adult movie star Jill Kelly] out of bankruptcy. So, we were able to supplement our extensive library of content with the content that Jill Kelly has generated.
Q:Did you have any concerns that Penthouse was coming out of bankruptcy and was in a fairly distressed state?
A:It was distressed. I think that ultimately it boils down to my confidence in the management team. I really wasn't concerned on balance. I was concerned less about the status of the company than maybe some other factors.
Q:On what issues do you spend most of your time?
A:I would say the bulk of my time is spent on transactional issues, whether that is the acquisition of assets, such as Jill Kelly and Danni.com [an adult Web site featuring performer Danni Ashe] or whether it is the forging of new business relationships, ventures and license agreements.
Q:What is toughest legal issue you have had to deal with?
A:Over the years the company has had its share of transactions and history. Sometimes tracing the course of matters can be difficult, especially with those matters that occurred in the 1970s. Getting to the bottom of a problem really draws upon one's detective skills and gut sense of what was likely to have happened here.
Q:What kind of regulatory issues do you have to deal with?
A:The adult industry has some particular laws and regulations governing how adult content is produced and maintained. These rules have been changing on a perennial basis.
Q:What are some of those rules?
A:For example we have to check IDs to ensure that the performers are of legal age. There are record-keeping requirements for productions that require producers to log information about the performers so that it is available for inspection. The regulations also require we properly label the content. The regulations can vary, depending on the medium in which you are producing the content.
Q:How important is the print publication to the success of the business?
A:The magazine is an important piece, but not as important as it was in the past. We don't view ourselves as a magazine publisher. We view ourselves as an adult entertainment company. Magazines are one of several ways in which we provide that entertainment.
Q:Do you review the magazine before it goes to press for such things as libel?
A:Yeah. We are quite careful. Our senior counsel handles the publication review--which is something he has done for years. We are proud of that record as well. We are aware that we can be a lightning rod for criticism, and we take every step to make sure everything in the magazine is accurate and compliant.
Q:Some people believe magazines such as Penthouse exploit women. How do you respond?
A:I take pride in how this company handles its relationships with talent and with the models. There are two schools of thought: One is the one you just expressed, and the other is that this is an avenue for women to express themselves and to make their own choices.
Q:What is the company's relationship like with Bob Guccione?
A:Let me pass on that. I really can't go into that. [Guccione has a case pending against Penthouse.]
Q:Do you enjoy reading the magazine?
A:I have enjoyed reading the magazine more as it has continued to evolve. It is an adult magazine, but it does address other topics not solely connected to the adult space.
Q:So would I find a ton of Penthouse products around your home?
A:You'll find a sampling of things that I bring home to show friends who are interested in seeing it.