Penthouse magazine's 2001 Pet of the Year Celebration in a Manhattan nightclub last month was, to all intents and purposes, business as usual. A crowd of previous pets, sports stars and at least one cast member of The Sopranos joined proprietor Bob Guccione to celebrate Zdenka Podkapova, a 'brainy Czech who likes Einstein', according to a press release.
Zdenka, we learned, would like to be reincarnated as a chihuahua 'because they are such small, lovely and friendly creatures who never harm anybody, are cuddled and caressed by everyone'. But caresses are one thing Penthouse 's publisher, General Media, is not enjoying much of these days. The fate of the privately owned, junk-bond-indebted company best known for publishing areas of the female anatomy that its rival Playboy is shy to visit is a saga that the New York financial media loves to revisit.
Often derided as Mr Macho Man, the original gold-chain-and-hairy-chest swinger, Guccione seems no closer to arresting the decline of a troubled skin-trade empire that is besieged by creditors.
In the latest chapter, Guccione has been forced to sell two plots of land in gambling mecca Atlantic City to help pay off a reported $28 million of debts. The sale of the plots after creditors threatened to come after his art-filled New York house came as a further signal of trouble.
Two decades ago, Guccione began construction of a $200m Penthouse casino, but got only as far as a four-storey steel structure before running out of money. The frame sat rusting ingloriously for years before being torn down.
The once-proud company, with its magazine holdings of Penthouse, Girls of Penthouse and Forum, has fallen on hard times. Circulation of Penthouse, which hit 3.5 million in the Eighties, has fallen to 850,000 as younger semi-pornographic men's mags such as Maxim and FHM have soared.
'Young kids don't need the same erotica any more,' says magazine analyst Martin Walker. 'The changes in sexual mores in this country mean they have access to the real thing. The magazines that appeal to the market Playboy and Penthouse once owned are lad magazines that are less erotic with no real nudity.'
Guccione's company, which brought crotch shots and phone-sex ads to American newsstands, has seen a collapse in revenues. Advertising income now accounts for less than $9m a year, versus nearly twice that much five years ago. According to the NY Observer, General Media's $56m in liabilities exceed its assets by more than two to one. Five years ago, the company showed balance-sheet assets of $50m. As of 31 March, nearly half of those assets are gone.
Cash reserves, at $4.8m, are down 25 per cent in just the past three months. Moreover, $50m in junk-bond debts that were due at the end of last year were rolled over for a further three on condition the yield would double to 15 per cent, after the company auditor warned there was substantial doubt about its ability to stay in business.
According to reports, Guccione has come close to hocking his art collection, sometimes valued as high as $200m, which includes paintings by Botticelli, Modigliani and Matisse, to raise capital.
Still, it has been a long, strange trip for the 70-year- old. Born in Brooklyn, New York, Guccione began his career as a painter in Paris - he recently had a career retrospective of his Impressionist-style work in Las Vegas - and started Penthouse in London in 1965. The magazine claims to have been the most profitable title on newsstands around the world for 31 years and is currently published in 14 foreign-language editions from Bangkok to Prague.
And despite the boom in online porn businesses, Penthouse.com - which says it attracts 2.5 million unique visitors a month - and its phone-sex business are reported to be struggling. 'There are sites on the internet much more explicit than anything he can do,' says Walker.
But not by much: there is now little Penthouse won't publish in its inexorable drift downwards. In the opinion of the NY Observer, Guccione is on the ropes for a simple reason: in the media's race to the bottom, 'his business has become a purveyor of such raw and unappealing trash that nobody wants to have anything to do with it'.
Even the Unabomber, Ted Kaczynski, declined Guccione's offer to publish his revolutionary manifesto: he said he would prefer a more 'respectable' publication.
But Penthouse is not alone in struggling for (market) penetration. Playboy, while losing circulation, has remained comparatively buoyant; its net revenues in 2000 fell by 12 per cent to $307.7m, compared with 1999, and the company posted a net loss of $47.6m compared with a $5.3m loss in 1999.
Although still promoted by an ageing, Viagra-popping Hugh Hefner and his coterie of identical blondes, Playboy Enterprises recently reversed a decision to get out of the business of airing hard-core porn on cable and formed Spice Platinum, with movies depicting actual penetration rather than just soft scenes.
The move was crucial for the Chicago-based company, which has noticed that hardcore porn can generate strong revenues.
Adult pay-per-view movies rocketed to $465m last year from $369m in 1999, thanks partly to demand for more explicit fare, according to Kagan World Media, a media industry newsletter.
Still, as a private fiefdom, Guccione has every right to run his empire down. Four of his five sons work in the family trade; one, Bob Guccione Jr, is a successful publisher in his own right, having established Spin and now Gear.
Father and son have been quarrelling for years, most recently over Bob Senior's attempts to evict his son from a million-dollar SoHo loft.
Nevertheless, Guccione has been around too long for anyone to count him out. He's planning not only to purchase Consumer's Digest, a consumer-report magazine, but also to launch a weekend national newspaper called Saturday Review.
General Media may be an oddity in the firmament of US publishing, but it runs on the shoulders of a macho giant.