Larry Flynt's Latest Hustle

Sexgate could give the Sultan of Smut a much-needed boost

It's after noon. Larry Flynt, never a morning person, has only recently awakened and is making calls from his Beverly Hills mansion. The Hustler magazine publisher, whose threatened allegations of sexual impropriety drove incoming speaker Bob Livingston (R-La.) from office, has been fielding a lot of calls these days. "I read where Livingston called me a bottom feeder," says the 55-year-old Flynt. "Sure, but look what I found at the bottom."

For nearly 25 years, since the onetime Ohio strip-club owner launched his skin magazine, Flynt has profited from the seamier side. Today, his $135 million-a-year publishing operation also distributes such lowbrow fare as the paramilitary S.W.A.T. magazine and the tattoo guide Skin and Ink.

Now, as Washington fixates on Bill Clinton's impeachment trial and charges of sexual misdeeds fly, Flynt's empire of smut stands to clean up. By late January, he plans to publish a special issue called The Flynt Report filled with the alleged sexual indiscretions of 11 other congressional leaders besides Livingston. And, Flynt says, House Majority Whip Tom DeLay is among the Washington figures he's investigating. The issue is unlikely to reap many advertising dollars. But Flynt will probably set the cover price high--at around the $5.99 he charges for Hustler.

BRANDED NIGHTIES. Flynt says the outings demonstrate his distaste for the hypocrisy of congressional Republicans. But this is as much about promotion as politics. Flynt expects to spend $2 million to $3 million paying women who provided the leads his investigators followed. "We'll make that back easily with The Flynt Report," he says. Moreover, he figures the rush of publicity will boost Hustler's 750,000 circulation by 10% to 12%, at least temporarily. "And every percent is worth $40,000 [a month] to our bottom line" of roughly $27 million.

The Sexgate scandals are only one of the growth opportunities Flynt has been chasing. He is opening Hustler stores in Cincinnati and Hollywood to sell videos and lingerie along with gourmet coffee. His company, LFP Inc., is scouting locations for three more stores, says LFP President Jim Kohls. This summer, Flynt also plans to open a Hustler casino outside Los Angeles. Capitalizing on Washington's scandals is just part of the routine. As far back as 1975, when Flynt published nude pictures of Jackie Onassis, he has used headline-making "exclusives." "If you can get beyond what he is selling, he's doing exactly what a Good Housekeeping magazine might do," says John Harrington, publisher of New Single Issue newsletter. "He's doing a great job of brand marketing."

But not all of Flynt's empire is thriving. The circulation of Hustler, by far his biggest holding, was once as high as 2 million in the mid-1970s. Like most men's magazines, Hustler's circulation has been sliding as people get sexual material off the Internet or over cable. Because Hustler gets few ads, Flynt has to rely heavily on circulation for revenues. Last year, circulation was down 2%, says Kohls. But he figures sales of the January issue are nearly 10% ahead of last year--largely due to the current spate of publicity.

Flynt has 31 other magazines, including the computer-game magazine Tips and Tricks and Hot Boat, a magazine about speedboats. This year, he plans to start an irreverent golf magazine called Backspin and Code, a sort of GQ for African-American men. "Niche publications like those can have a dedicated subscriber base, and the overhead is low," says Roland DeSilva of DeSilva & Phillips Inc., a New York investment bank that structures deals for media. Operating margins for such magazines can reach 23%, he says, double those of larger titles.

Eventually, Flynt may take public his retail unit, which earned $2 million in 1998. Before that, though, there is the business in Washington. Flynt says he will out at least one more politician before publishing The Flynt Report in late January. He's huddling, he says, with his lawyers and investigators. Maybe his PR people, too.

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