Hugh Hefner’s stake in Playboy Enterprises and net-worth was surprisingly low at his death. Many assume that he owned the majority stake in the company, but that was not the case.
Hefner gave up his shares in Playboy Enterprises in 2011 for a 35 percent minority stake in the company. As Fortune Magazine reports, private equity firm Rizvi Traverse Management bought Hefner’s company for about $217 million. Hefner gave his shares to Rizvi and got the minority stake in exchange plus certain assurances, namely that he would receive a $1 million salary every year and that he’d get to live the rest of his life in the Playboy Mansion for a yearly rent of $100.
According to TMZ, the 35 percent stake also had certain conditions that could affect his children’s inheritance.
Playboy Enterprises has one year to buy the shares from Hugh Hefner’s estate. If the estate and Playboy Enterprises can’t make a deal, the share will go on sale available to any investor who wants them and has the money to buy them. TMZ’s sources claim that the shares could sell for $45 million. The money from the sale will go to Hugh Hefner’s children. Their sources also say that the deal will probably be made sometime next year and that the shares wouldn’t be that compelling for an external investor since it’s a minority stake and the investor won’t have the influence that Hugh Hefner had.
If you think that $45 million doesn’t seem like a lot for the children of Playboy’s founder, there are more clues that Hugh Hefner’s financial situation wasn’t as rosy as most people expect.
As Fortune Magazine reports, Hefner’s net worth was remarkably low at his death. He owned no significant assets or real estate. In the deal with Tivzi, he lost all the intellectual property rights to the Playboy brand including the well-known bunny-head logo. Hugh also lost rights to the commercial use of his name, signature, and his image. Playboy’s trademarks may make a $1 billion in sales but none of those royalties are going to Hugh Hefner’s estate or his children.
Hugh Hefner died earlier this week. Did he help create a sexual revolution or do you view him as just a dirty old man? pic.twitter.com/fuemcHpneg— LBC (@LBC) September 30, 2017
Do you think that Hugh Hefner made the right choice to accept a minority stake in Playboy Enterprises? Let us know in the comments below.
RELATED POSTS ON THE INQUISITR
[Featured Image by Charley Gallay/Getty Images for Playboy]