A REAL FIXER-UPPER: Thinking of buying a magazine but don’t want to spend the $50 million or so it might take to snatch New York away from Michael Wolff? Well, Bob Guccione Sr. may have a deal for you.

His life’s work — Penthouse magazine, its Internet franchise and perhaps even his $40 million Upper East Side mansion — are officially on the block after he and his lawyers worked out a deal with his creditors last week for $6 million in financing and a plan to resume monthly publication.

This story first appeared in the October 10, 2003 issue of WWD.  Subscribe Today.

Penthouse and its various spinoffs have been in Chapter 11 since August, and 10 days ago its creditors petitioned the court to liquidate the company. They withdrew that motion Thursday, paving the way for Guccione to bring in a new minority partner (not likely, considering the magazine’s long decline) or an outright buyer. No doubt Penthouse’s bondholders would prefer the latter. “What I suspect is that these bonds have been written down already,” said a source close to the company. “It’s old stuff. I think they just want it to go away.”

Considering the bondholders think Penthouse is worth less than zero, what should prospective owners expect to pay? “Beauty is in the eye of the beholder,” chuckled Penthouse’s attorney, Robert Feinstein. “What someone is prepared to pay for a company is really a function of how much they want it.”

The balance sheet certainly isn’t pretty. At the end of June, the company had assets of $10.6 million and liabilities of $64.6 million (including $40 million in debt that might go away after bankruptcy), according to its most recent public financial documents. The company lost $2.3 million during those six months, most of it to interest payments. With the magazine resuming uninterrupted publication (although Feinstein did not know when), revenues will presumably rise. At the right price, there could be a real business here.

So who wants it? The lad books said they won’t touch it — representatives of both Dennis Publishing (home of Stuff and Maxim) and FHM shot the idea down immediately.

At the other end of the sexual spectrum is fellow smut empire Hustler and its owner Larry Flynt. He’s met with Guccione several times in the past year, said a Flynt spokeswoman, but hasn’t decided whether to submit any formal proposals.

Dark horse bidders will no doubt appear, tempted by the residual strength of the brand and the bargain basement price, and if you’ve thought all along that Playboy would just swoop in, then think again.

“Playboy would never buy Penthouse. I don’t think the stock would react favorably,” said Robert Routh, a media analyst who covers Playboy Enterprises for Arnhold and S. Bleichroeder. “It’s totally different. Penthouse is a little bit more…a little harder.” And so’s a sale. — Greg Lindsay

TWO ROADS: A shakeup has hit society magazine, Avenue. Pamela Gross, the magazine’s editorial director who was hired last year when the title was sold to her old friend, Tom Allon, is now running the ship exclusively while its editor in chief Jill Brooke is moving into a contributor’s role, where she’ll continue to write cover stories for the magazine but won’t do the heavy lifting.

There were minor differences between Brooke and Allon over its direction. He wanted it to be more straight society; she was interested in doing more coverage of philanthropic endeavors and other rich people doing serious things stories.

But it’s all good.

Brooke has quietly joined Show Circuit, the rarefied 10,000 circulation quarterly that makes the rounds on the horse circuit, which was bought earlier this year by former Kiehl’s owner Jami Heidegger.

“I get to keep writing for them [Avenue], I’m editor in chief of Show Circuit and I get to do my book. It’s the best of both worlds,” Brooke said. “We’ve gone through three owners in three years and whenever you have a new boss, it’s their candy store and a smart person learns whether they want to stock it with butterscotch or licorice.”

“We do not have an editor in chief at the moment and we may not,” said Gross when reached for comment. — Jacob Bernstein

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