Battling Away for the Low Ground

Penthouse Media Group Inc., publisher of the men's magazine, raised $48 million in part to fund an adult entertainment broadcast network that would compete with Playboy Enterprises Inc.'s Spice and New Frontier Media Inc.'s Erotic.

Penthouse raised $15 million in preferred stock and $33 million in bonds, according to a private-placement notice filed September 6 with the US Securities and Exchange Commission. The company will use $26.2 million to repay debt, including money owed to Chief Executive Officer Mark Bell's buyout firm in Boca Raton, Florida. It will devote $11.5 million to developing the new network.

New York based Penthouse Media has been changing the focus of its magazine from pornography to less-racy men's lifestyle articles. Television is another leg of Bell's strategy to turn around the closely held company, which his firm bought out of bankruptcy protection.

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