As filed with the Securities and Exchange Commission on December 22, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 21, 1998
Playboy Enterprises, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-6813 36-2258830
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
680 North Lake Shore Drive, Chicago, Illinois 60611
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(Address Of Principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 751-8000
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Not applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On December 21, 1998, Playboy Enterprises, Inc. (the "Company")
announced that it had entered into an agreement to create Playboy TV
International LLC, a joint venture with Cisneros Television Group that will
create television channels worldwide (outside of the United States and Canadian
territories). A copy of the press release by which this announcement was made is
attached as Exhibit 99.
Item 7. Financial Statements And Exhibits
(a) Financial statements of businesses acquired
Not applicable.
(b) Pro forma financial information
Not applicable.
(c) Exhibits
Exhibit
Number Description
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99 Press release, dated December 21, 1998, of the Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PLAYBOY ENTERPRISES, INC.
By: /s/ Howard Shapiro
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Name: Howard Shapiro
Title: Executive Vice President,
Law and Administration,
General Counsel and Secretary
Dated: December 21, 1998
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EXHIBIT INDEX
Page
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99 Press release, dated December 21, 1998, of Playboy Enterprises, Inc. 5
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Exhibit 99
FOR IMMEDIATE RELEASE Playboy Enterprises, Inc.
Media Contact:
Rebecca Theim (312) 751-8000 x2656
[email protected]
Investor Relations Contact:
Martha Lindeman (312) 751-8000 x2650
Cisneros Television Group Contact:
Susan Ainsworth (305) 894-3540
PLAYBOY ENTERTAINMENT GROUP AND
CISNEROS TELEVISION GROUP ANNOUNCE CREATION OF
PLAYBOY TV INTERNATIONAL
Joint Venture Will Create Television Channels Worldwide
Under Playboy Banner
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CHICAGO, DECEMBER 21, 1998 - Playboy Entertainment Group, a division of Playboy
Enterprises, Inc. (NYSE: PLA), and Cisneros Television Group today announced the
formation of a joint venture, Playboy TV International LLC. Playboy TV
International LLC will create television channels worldwide (outside of the
United States and Canadian territories), under the banner of Playboy, one of the
world's most recognized brands. Playboy TV International LLC will have 100%
ownership of the existing Playboy networks in the United Kingdom, Latin America
and Iberia; a 19% interest in Playboy TV Japan; two existing AdulTVision and two
Spice networks; and the right to create and distribute Spice branded television
channels worldwide. Playboy TV International LLC will also have the right to
distribute a Spanish-language channel to the U.S. Hispanic audience.
Under the terms of the transaction, Cisneros Television Group, which currently
owns and operates nine pay-television channels, will contribute $80 million,
ownership in its existing Playboy-branded channels, and management expertise to
the venture in exchange for an 80.1% equity interest in Playboy TV International
LLC. Playboy Entertainment Group will contribute $20 million, the Playboy
trademark for international television, ownership in the existing Playboy TV,
AdulTVision and Spice networks in Latin America, Japan and the U.K.,
international rights to both its existing program library and future programming
output. Playboy Entertainment Group will initially have a 19.9% interest in the
venture, with the option to increase its stake to 50% for up to the next 10
years.
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In return for Playboy's international television programming rights and
trademark, Playboy TV International LLC will pay Playboy $100 million, $30
million of which will be paid on closing, and the remainder over the next five
years. Playboy TV International LLC also has entered into a long-term
programming output deal with Playboy to license international television rights
to future production slates in exchange for payments that are a significant
percentage of each year's production spending subject to certain minimums and
limits.
Christie A. Hefner, chairman and CEO of Playboy Enterprises, Inc., said:
"International television has been a major focus of our growth plans and this
partnership will not only allow us to receive value for what we've created to
date, but also to launch new international Playboy and Spice networks more
aggressively under attractive terms. The agreement will significantly enhance
Playboy's EBITDA and cash flow beginning in 1999. Our estimate of the positive
impact on EBITDA of the deal is $10 million to $15 million in 1999. We also are
very pleased to strengthen our partnership with Cisneros Television Group, an
international media player that will help leverage Playboy TV's entry into new
markets. Finally, we believe the joint venture will give shareholders a clearer
view of the value of our international television business."
Carlos Cisneros, chairman and CEO of Cisneros Television Group commented, "The
creation of Playboy TV International positions us to immediately launch channels
around the globe, backed by the strength of one of the world's most recognized
brands. The existing channel in the UK adds significantly to our presence in
Europe, while the existing channel in Japan gives us an immediate foothold in
Asia. We have already enjoyed great success in distributing Playboy TV in Latin
America, Spain and Portugal, and we are pleased to be expanding our
relationship. Cisneros Television Group's ability to implement our corporate
strategy of international programming distribution will be greatly accelerated
by the access that the Playboy brand will afford us. The combination of the
Playboy brand and the Cisneros Television Group's expertise in international
programming distribution is formidable."
Tony Lynn, president of Playboy Entertainment Group, said, "Since joining forces
with Cisneros Television Group in 1996 to launch Playboy TV Latin America, the
network and our partnership have flourished. We are extremely pleased to have
forged this major global venture with Cisneros Television Group, which is a
well-respected company with extensive experience in creating and selling
television and film programming, in Latin America and around the world, and
which has an impressive track record of developing and managing quality
international brands. We expect Playboy TV International to begin rolling out
new Playboy TV channels beginning in 1999."
Playboy TV International LLC will own 100% of the Playboy TV networks in Latin
America, Iberia and the United Kingdom, and a 19% interest in Playboy TV Japan.
Tohokushinsha, Playboy's partner in the Japanese network, will retain its 81%
interest in keeping with that country's foreign ownership rules. The first new
network launches of the venture will be Playboy TV networks in Germany and
Korea, which Playboy TV International LLC expects
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to debut in 1999. AdulTVision networks currently operate in Latin America and
Japan, and Spice networks operate in the United Kingdom, Latin America and
Japan.
Playboy was advised by Allen & Company, which will provide a fairness opinion.
Cisneros Television Group was advised by Violy, Byorum & Partners LLC.
The agreement is subject to Playboy's acquisition of Spice Entertainment
Companies, due diligence and other customary closing conditions.
# # #
Playboy Enterprises, Inc. is an international media and entertainment company
that publishes Playboy magazine and produces brand extensions, including
newsstand specials, international editions and new media products and services;
operates a direct marketing business, including the Critics' Choice Video,
Collectors' Choice Music and Playboy catalogs; creates and distributes
programming for domestic pay television, worldwide home video and international
television; and markets the Playboy trademarks on apparel, accessories and
products sold worldwide.
Cisneros Television Group, a member of the Cisneros Group of Companies, is
focused on the creation of entertainment properties throughout the world. The
Cisneros Group of Companies has ownership interests in a number of global media,
entertainment and telecommunications companies. CTG's holdings include
Locomotion(TM), a 24-hour animation channel with Hearst Corporation, and two
Playboy(TM) branded channels, Playboy TV Latin America and AdulTVision, with
Playboy Enterprises, Inc., as well as Infinito (a documentary channel), Space (a
24-hour movie channel), Jupiter Comic (Latin America's only comedy channel),
I-Sat (a movie channel geared to a younger audience) and Uniseries (which shows
popular dramatic weekly television series from the U.S. and abroad). Cisneros
Television Group in Argentina and the Southern Cone countries also distributes
twelve other channels including the successful music channel MuchMusic and the
news network Cronica, and owns one of Latin America's largest and most important
film libraries.
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