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Playboy, which has been struggling in the digital age, said on Tuesday it will outsource publication of the iconic magazine to American Media Inc in a cost-cutting move.
Playboy Enterprises Inc said the plan to outsource all Playboy magazine functions to AMI with the exception of the editorial product should return the magazine founded by Hugh Hefner to profitability in 2011.
Florida-based AMI, the fourth-largest magazine publisher in the United States, will assume responsibility for production, circulation, advertising sales, marketing and other support services, Playboy said.
'Our goal is to focus our resources on what we do best, which is to create compelling content,' Scott Flanders, chief executive of Chicago-based Playboy Enterprises, said in a statement.
'By joining forces with American Media, we will be able to significantly reduce our cost structure.'
Playboy Enterprises said its magazine is expected to lose $US8 million ($A8.66 million) this year. It forecast that the agreement with AMI would help cut the loss to $US5 million ($A5.41 million) next year before reaching profitability.
Playboy said approximately 25 posts would be eliminated as a result of the agreement with AMI and the company would take a restructuring charge of $US2 million ($A2.16 million) in the fourth quarter.
The outsourcing move comes amid reports that the 83-year-old Hefner is considering selling the magazine he launched 56 years ago.
Playboy shares were 1.21 per cent higher at 4.17 dollars in mid-day trading in New York.
AMI titles include Men's Fitness, UFC Magazine, Muscle Fitness and the National Enquirer.
