Wednesday, Nov. 19, 2008 | 2:33 p.m.
Penthouse magazine tycoon owner Marc Bell has arrived in Las Vegas to shake up the Strip as it grapples with the nation’s ever-darkening economic storm clouds! Vegas DeLuxe has learned that although his offers to buy three different casino properties in the past six months were turned down, one company has now come back to him asking him to reconsider and renegotiate!
Marc says that within the next 12 months, there will be major ownership changes of Strip properties -- and he intends to be one of the new big players in town. In addition, he wants to push the envelope by adding his provocative, pouting, posing Penthouse Pets so that the Strip gets “hotter and sexier.” Marc also believes that mainstream Vegas casinos will eventually have to allow adult-themed topless clubs to add to the existing sizzle of the Strip.
The financier says he can back up his platinum plans with a billion-dollar war chest as a result of his parent company that is the world’s largest Internet operation. He has more than 200 million members in more than 170 countries worldwide.
Vegas DeLuxe got to go up close and personal with the high-roller when he flew into Vegas armed with his marvelous, manicured models. We spent an afternoon and long night talking in his Stripper suite at Planet Hollywood, then at Koi and finally at Prive nightclub there.
First, just who is Marc Bell? In November last year, he completed a $250 million IPO for Enterprise Acquisition Corp., where he serves as chairman of the board. Mr. Bell also is managing director of Marc Bell Capital Partners, a private equity firm he founded in 2003 based in Boca Raton, Fla. Marc Bell Capital Partners invests in entertainment ventures, publishing, Internet and real estate. He has also overseen several large-scale real estate development projects in New York, London, Santa Clara, Calif., and South Florida.
As a producer of several successful Broadway musicals and plays (Jersey Boys, The Wedding Singer, August: Osage County and A Catered Affair), Marc is a winner of the American Theatre Wing’s Tony Award -- in 2006 for the Grammy Award-winning musical Jersey Boys (Best Musical) and in 2008 for the Pulitzer Prize-winning August: Osage County (Best Play).
Mr. Bell is a member of the board of trustees of New York University and New York University School of Medicine. He was an adjunct professor at the Global Entrepreneurship Center of Florida International University, where he taught graduate courses in entrepreneurship. Mr. Bell runs a foundation to foster education and advance medical research. Since its inception, the foundation has organized significant personal and outside donations to schools, hospitals and educational institutions.
Some of the foundation’s notable programs include The Bell Scholarship, which encourages undergraduates to choose careers in public service by relieving them of their debt upon graduation. Mr. Bell has a bachelor’s degree in accounting from Babson College and a master’s in real estate from New York University.
He’s also a mega-bucks mogul now surrounded by a bevy of blonde and brunette beauties! Before we started our candid conversation, he pointed out that at age 41, he’s half rival Hugh Hefner’s age:
Robin Leach: In a sense, is this “move over, Hef, there’s a new gunslinger in town?” How are you different from Playboy?
Marc Bell: Penthouse today is a very different business than it was 10 years ago. Founding partners Bob Guccione and Kathy Keaton sadly got cancer at the same time, Bob survived, and we got it out of bankruptcy. Our company owns 10,000 Web sites with 200 million people on them worldwide. They are not at all adult-oriented. We have everything from adultfriendfinder.com to bigchurch.com, which is a Christian site. As a full Internet entertainment company, we have the whole spectrum. We are headquartered in Boca Raton, Fla., but we already have offices here in Las Vegas and others in Los Angeles, San Francisco and New York. We have six magazines and a book publishing group.
RL: When you were a kid, you didn’t wake up and say I want to own everything that moves on the Internet -- how did you get to this point?
MB: It was luck. It is being in the right place at the right time. I started my first Internet company in 1990. Here I am 20 years later. We try to create new technologies and push technologies. We are very big on gadgets and gizmos. We are different than anybody else. Playboy is a brand, so are we, but we have much more. We dwarf Playboy in size, no matter what metric you use -- in terms of members, revenue and circulation. Playboy is a public company, but we are private. It is myself and my partner Dan Staton.
We acquired the Gucciones’ Penthouse properties first, expanded them and spent half a billion dollars acquiring other assets and beefing up the business. We didn’t acquire the clubs per se, they are all licensees. We have a consumer products licensing group, and we have and can license the Penthouse name and brand to clubs and other ventures around the country. We gave Penthouse magazine an extreme makeover, and editorially we targeted that 21-34 audience. Where do you go when you graduate from Maxim? Pictorially we have softened it up to create female-friendly fare. We wanted to create a magazine that you can leave on your coffee table at home, pick it up and look, say that’s OK, put it back down and let it sit there. With the magazine we acquired, it was hidden under the mattress. We wanted to be proud of it and have it out in the open.
RL: Why have you been so quiet about all of this? Using Hef as the comparison, he is such a public figure, and you have remained under the radar until now.
MB: Public figure does not necessarily mean profitable, as Playboy’s low $2 stock will prove. We have decided now is the time. We have built up enough of a business. We are pleased. We have over 10,000 affiliates driving traffic to us every day. We reach 4% of everybody on the Internet every day. According to the official scores and ratings, one out of every four people worldwide is a member of one of our Web sites. To put it into perspective, we are twice the size of Facebook and MySpace. We own the largest Spanish-speaking Web site in the world, Amigos.com. We own the largest Chinese Web site, Asianfriendfinder.com. On that alone, we have 40 million people on there serviced by two Chinese dialects.
It is all subscription-based, and starting next year we will allow advertising on the sites. We felt that we were providing enough of a value that people would pay. That has held true. We will start accepting advertising to supplement the subscription income we get.
RL: So the word is that you are here in Vegas to buy a casino!
MB: We would like to own a casino. We know there are ones for sale.
We really like Las Vegas, and we are looking forward to a property that could house Penthouse. It would be a Penthouse casino. We would most likely leave the hotel with the same name and put a Penthouse casino in the hotel. Market research has shown people will gamble at a Penthouse casino, but maybe not necessarily stay in a Penthouse hotel. They will be two different entities. Bob Guccione did a fantastic job, and he built a tremendous brand that’s known around the world. He was a creative genius and built an amazing brand. The question was what can we do with the brand. Ask any man over 18 what is Penthouse, and they will tell you what it means. We don’t have any recognition issues. If I went up to you an hour ago and asked what was Penthouse, you knew what it was. We didn’t need to be out there telling people what it was. We launched a cable TV channel this year, Penthouse TV, and we are in 30 million homes already. We will be in 60 million homes by next year. We are rolling it out globally.
RL: If I were having this conversation with Hef, we would be in his bedroom in a silk robe. And here we are in a hotel suite and you’re wearing shirt, tie and a suit! Does that mean you are all business?
MB: To us it is all business. I am not creating a lifestyle for myself, but let’s be honest: Hef has done a fabulous job, but we are about making money.
RL: What would you have done if you hadn’t gone into the Internet?
MB: I was a computer geek in high school. I just stuck with it. I was a network engineer and computer programmer.
RL: When you have fun as a business, what do you do for fun?
MB: I have a fun job; I get to meet a lot of interesting people. It is taking this company that was bankrupt five years ago and today it makes over $100 million a year.
RL: Do we get to see you with The Girls Next Door of Penthouse?
MB: I am not trying to be Hef.
RL: What do you think of the current economic time? Is now the time in Vegas to buy and make deals?
MB: I think so, that is why I am here. I think the economic slowdown will last a few years. Historically it is two, two and a half years if you look at economic downfalls. Vegas is a microcosm of the rest of the world. Vegas will come back stronger than ever. Vegas is unique to the country; you cannot replicate it overnight.
I think that once the over construction here is complete and certain people go through the bankruptcies that it needs to have, the casinos will come out profitable and Vegas will boom once again. Everyone goes to Vegas. Name one place, and everybody says they want to go to Vegas. We think it is important to be out here to make our brand. There is money to be made out here. Every American at some point makes a trip to Vegas.
We will start with a hotel- casino. We have so many members that we are able to reach out to on a daily basis. We already have a leg up on Harrah’s and MGM because we reach more people.
RL: How has the Internet been during this economic crisis?
MB: Amazing. People are spending more time on the Internet at home now that times are tough. (Pulls out his Blackberry.) A real example: In the past 24 hours, we signed up 162,760 new members and a percentage will pay for the upgraded membership. We are talking 75,000 people every day are signing up to our Web sites every day. That is 5 million a month, 60 million a year. Imagine if we can harness that group for the Vegas hotel. I don’t think it will solve the immediate woes of the town, but we will acquire a property and have it be very successful.
I am out here now one week a month. I’m looking forward to buying at least one property. We think it will be an adventure.
RL: It will put you up there with the movers and shakers of Vegas from Bugsy Segal, Howard Hughes, Steve Wynn, Bobby Baldwin and George Maloof.
MB: Those guys built a town -- we are just going to improve it. If we find what we are looking for, we will take the property and turn it around. We have access to a lot of people. I’m optimistic that within the year, we will have a presence here!