Larry Flynt Publishing Inc. Business Information, Profile, and History

History of Larry Flynt Publishing Inc.

Larry Flynt Publishing Inc. (LFP) is a privately held publishing company that produces approximately 30 magazines. The company's oldest and best known publication is Hustler, an adult entertainment men's magazine with a circulation of around 750,000. Although many of LFP's other magazines are similar in nature to Hustler, the company also produces several more mainstream periodicals. Approximately 60 percent of the company's revenues derive from magazine sales. The remainder of the income is generated by several by-subscription websites and a Hustler store in Hollywood, which carries adult books, magazines, and products.

1960s: Bar Beginnings

The history of Larry Flynt Publishing is, in many ways, inextricable from the history of its colorful, controversial founder and president, Larry Flynt. Flynt was born in 1942 into less-than-idyllic conditions. Poverty, isolation, and alcoholism were the most pervasive characteristics of his home life and his tiny Kentucky community. Flynt dropped out of school in the ninth grade to join the Army but was discharged a year later due to low scores on a general education test. Not easily dissuaded, he then enlisted in the Navy. Flynt was more successful in his second enlistment, eventually becoming a radar technician on an aircraft carrier.

When discharged from the Navy in 1964, Flynt moved to Dayton, Ohio, and began working at two manufacturing jobs. In 1965, with $1,800 in savings, he made a down payment on a bar in one of Dayton's working-class neighborhoods. Naming his establishment Hillbilly Haven, Flynt began his first experiment with niche marketing. By setting up horseshoe stakes and picnic tables, and deliberately targeting a rowdy, hard-drinking, and often violent clientele, he exponentially increased the bar's sales in just a few months. By the end of 1965, Flynt was able to buy a second bar, and, the following year, a third. Both were similar in approach and customer base to Hillbilly Haven.

Flynt's fourth bar, named Whatever's Right, was a departure from his earlier ventures. Striving for a more elegant atmosphere, the club featured a dance floor, popular music, and a collection of attractive 'hostesses' whose job was to dance with the patrons. The dancing hostesses were a huge success, and the club soon inspired several local imitations. In 1968, Flynt took his hostess idea one step further. Reasoning that if fully clothed girls resulted in good drink sales, semi-clothed girls would result in great drink sales, he opened Dayton's first go-go club: the Hustler Club.

When the Hustler Club proved to be a money-maker, Flynt decided to get out of the working-class bar business and focus more on his 'upscale' clubs. Selling his first two bars, he began opening a string of Hustler Clubs across Ohio--in Cincinnati, Columbus, Cleveland, Toledo, and Akron. By early 1973, he had eight clubs and approximately 300 employees.

1970--75: Becoming a Publisher

Flynt's first foray into the publishing industry was an entertainment newspaper called Bachelor's Beat. The publication, which was in part a PR piece for the Hustler Clubs, lasted for two years and never made a profit. Flynt sold it at the beginning of the 1970s. In 1972, Flynt again tried his hand at publishing when he began producing a monthly newsletter for Hustler Club members. The publication, a modest four-page single-fold, contained short news and feature articles on various Hustler Club dancers. The newsletter was an immediate hit with readers, and Flynt soon received calls urging him to expand it. For the third issue of the Hustler Newsletter, he did so, upping the size to eight pages and abbreviating the name to simply Hustler. The newsletter remained highly popular and continued to expand in size. By August 1973, it contained 32 pages.

In late 1973, Flynt merged his newsletter with a national magazine called Gallery, which was published by Ron Fenton. Billing Gallery as the 'new official publication of the Hustler Clubs,' Flynt and Fenton co-published three issues. Before they could go further, however, their distribution company foreclosed on the venture, effectively shutting down production. The shutdown of Gallery did not discourage Fenton and Flynt, and soon they were back in business. In May 1974, Fenton suggested they team up to develop a new national men's magazine, and Flynt agreed. After securing a distribution company, however, the would-be publishers were faced with the problem of raising enough money to produce the first few issues. Flynt solved the dilemma by temporarily diverting his employees' withholding tax.

Like Flynt's earlier newsletter, the new publication was called Hustler. It debuted in July of 1974&mdashø less than rave reviews. In his autobiography, An Unseemly Man, Flynt describes the first issue as a mess: 'a high school version of Playboy with a little Penthouse thrown in.' Upon seeing it, Fenton immediately bailed out of the operation.

While Flynt scrambled to produce the next few issues on his own, he gradually developed a vision of what he wanted the magazine to be. Eschewing the soft-focus photography and picture-perfect models of most popular men's magazines, he chose for Hustler a cruder, more explicit look. For models, Flynt sought what he termed 'real women,' which included those with obvious imperfections and anomalies. He also showed more of his models than was generally accepted, becoming the first mass-circulation magazine to show full female genitalia. Flynt aimed for a similar level of single-minded explicitness in the magazine's editorial content. 'The question I had to face right away was whether the magazine ought to include lifestyle issues, movie reviews, and interviews with mainstream figures,' he wrote in An Unseemly Man. 'My instinct was to try something different. It seemed to me that if the theme and focus of a magazine is sex, then its whole content ought to serve that purpose,' he noted.

A year into publishing Hustler, Flynt knew that he had hit on the right formula for success. By April, the magazine was grossing more than $500,000 per issue. By June, with publishing profits far surpassing those of the Hustler Clubs, Flynt decided to get out of the bar business. For better or for worse, he had become a publisher.

1976--80: In Trouble

From the start, Hustler provoked a great deal of public outrage. Not only were its photographs more graphic than those of its competitors, but its bitingly satiric and often vulgar cartoons and features offended virtually everyone. The magazine was to land Flynt in numerous legal battles on charges of everything from obscenity to libel.

Flynt's first major court case was tried in 1976 in Cincinnati, Ohio. He was charged with pandering, obscenity, and organized crime, and was convicted on all three counts. Filing an appeal, Flynt's attorneys got him released on bond, and he returned to Columbus to run Hustler. As it turned out, the trial publicity had been good for business. Sales of the magazine had reached an all-time high of 2.7 million copies monthly.

In early 1978, while his Cincinnati appeal was still pending, obscenity charges were filed against Flynt and Hustler in Lawrenceville, Georgia. While in Lawrenceville for the trial, the controversial publisher was gunned down outside the courthouse. Shot twice in the abdomen, Flynt barely survived. He was left paralyzed from the waist down and in blinding pain.

When released from the hospital, Flynt immediately moved Hustler to Beverly Hills. By that time, however, he had developed a debilitating addiction to painkillers. Disinterested in and unable to run Hustler, he left the business mostly in the hands of his staff. Meanwhile, he contended with a series of legal battles. Although his Cincinnati conviction had been overturned on appeal, there was still a long list of individuals who had been offended by Hustler, and hence a long list of lawsuits. With his personality altered by both pain and painkillers, Flynt's courtroom behavior grew increasingly bizarre. Eventually, he was sentenced to 15 months in a federal psychiatric prison. Five-and-a-half months into his sentence, however, that ruling too was overturned, and Flynt was released.

1980--96: Media Scourge, Media Darling

By the early 1980s, Hustler was once again at the center of a public maelstrom. In 1983, the magazine ran a parody of an ad that featured the Reverend Jerry Falwell, a well-known televangelist. The parody, which mimicked a popular liquor advertisement, featured a picture of Falwell and a fabricated 'interview' with him in which he discussed having sex with his mother. In 1984, Falwell filed a $45 million lawsuit against Hustler and Flynt, claiming libel and emotional distress. The jury found Flynt not guilty on the charge of libel but guilty on the charge of emotional distress. Although his lawyers immediately filed an appeal, the verdict was upheld by the Court of Appeals for the Fourth Circuit. Flynt's legal team then petitioned for a review of the case by the U.S. Supreme Court and was granted the review. In the midst of much media attention and public outcry, the Supreme Court ruled in favor of Flynt, reversing the earlier decision.

While Flynt was fighting his very public court battle, his business was quietly growing into new areas. The market for men's magazines softened somewhat in the 1980s, leaving Larry Flynt Publishing in need of new income streams. As a result, the company expanded to include adult video production and a collection of Internet sites, including a by-subscription online version of Hustler.

LFP also began testing the water in the mainstream publishing market, launching a series of new special-interest magazines with such unobjectionable titles as Camera & Darkroom Photography, PC Laptop Computers, and Maternity Fashion & Beauty. To accommodate its expansion, the company moved into a new, larger headquarters on the famed Wilshire Boulevard in Beverly Hills.

Flynt and Hustler were immortalized by Hollywood in 1997, with the motion picture 'The People vs. Larry Flynt.' The movie, which offered a somewhat sanitized version of Flynt's ascension, was nominated for several Oscars. It also put Flynt squarely back where he liked to be: in the spotlight.

1997: Back to Ohio

Although Flynt's 1977 conviction in Cincinnati had been overturned, the case had essentially managed to drive Hustler out of town. For the 20 years after the trial, almost all Cincinnati area retailers refused to carry the magazine for fear of being prosecuted. In 1997, Flynt decided it was time to change all that. 'I've always felt that Cincinnati was unfinished business,' he said in an April 1997 interview with The Cincinnati Enquirer, adding, 'I just think it's ridiculous after all these years that the magazine is not being sold there when similar ones are. It's not the content; it's the name.'

Flynt believed that the best way to resolve his 'unfinished business' was to be indicted again and win an acquittal. In a calculated attempt to provoke authorities and get arrested, he stationed himself on a street corner in downtown Cincinnati and began handing out copies of Hustler to the crowd that quickly gathered. Although the stunt garnered a great deal of attention, it did not result in an arrest.

It was not in Flynt's nature to give up easily. When he failed to get his day in court by distributing Hustler on the street, he upped the stakes by opening an adult bookstore. Located in the heart of downtown Cincinnati, the store--Hustler Books, Magazines and Gifts--opened its doors in October 1997. Although there was some debate about zoning violations, no arrests were made. In the first part of 1998, however, the Hustler store finally prodded the city into action by adding hard-core adult videos to its product mix. Flynt was indicted on 15 obscenity and corruption charges, including pandering obscenity, conspiracy, and disseminating matter harmful to juveniles. All of the charges were linked to the store's sale of adult videos.

The trial, originally set for January 1999, was delayed until May and then ended in a surprising plea bargain before jury selection was even complete. Flynt agreed to have Hustler News and Gifts, Inc., the FLP subsidiary that operated the Cincinnati store, become the defendant in the case and plead guilty to two counts of pandering obscenity. Under the terms of the agreement, Flynt agreed to remove all pornographic materials from the Hustler store and to stop distributing hard-core pornography anywhere in the county. The prosecutor agreed to drop the remaining 13 obscenity charges. Explaining his decision to plead out, Flynt said that the deal was a victory for Hustler. 'They gave us what we wanted,' he said in a May 12, 1999 interview with Court TV Online. 'When I originally returned to Cincinnati, it was to get my Hustler magazine distributed in Hamilton County. If prosecutors had told me that Hustler had to go, we would still be up there picking a jury.'

While Flynt was in the thick of his second Cincinnati arrest, the whole nation was focused on a much larger sex-related issue. U.S. President Bill Clinton was embroiled in a very public scandal involving White House intern Monica Lewinsky. Accused of perjuring himself during questioning about Lewinsky, Clinton faced both personal humiliation and political disaster. Flynt jumped into the fray by taking out a full-page ad in the Washington Post that offered $1 million for evidence of illicit sexual relations involving members of Congress or senior government officials. Receiving some 2,000 responses, Flynt hired investigators to look into the ones that seemed credible and worthwhile. Eventually, the stories were compiled in a special publication called The Flynt Report. In addition to keeping Flynt's name in the news, the dirt-digging tactic managed to topple at least one politician. Republican House Speaker-elect Bob Livingston resigned from office after Flynt's investigators discovered he'd had a series of extra-marital affairs.

Looking Ahead

In late 1998, Flynt opened Hustler Hollywood, an upscale combination of sex shop and coffee bar located in West Hollywood. The store was to serve as a prototype and flagship for a whole chain of stores, to be located in major cities nationwide. Although no other locations had been officially announced, Flynt was reputed to be considering Atlanta, Miami, and Las Vegas for his next such ventures.

As LFP prepared to usher out the 20th century, the advent of the Internet and cable television had caused a decline in its magazine sales, a trend which was unlikely to reverse. Together, the company's 31 periodicals had a monthly circulation of between 2.5 and 3 million. This was a far cry from the 1970s, when Hustler alone sold that many copies each month. With magazine sales softening, Flynt planned to rely more heavily on Internet sites and adult videos to generate revenue.

Principal Subsidiaries: Hustler News and Gifts Inc.

Principal Competitors: Bertelsmann AG; General Media International, Inc.; The Hearst Corporation; Playboy Enterprises, Inc.; The Times Mirror Company.

Chronology

• Key Dates:

• 1965: Larry Flynt opens his first bar in Dayton, Ohio.
• 1968: Flynt opens Dayton's first go-go bar, The Hustler Club.
• 1972: The Hustler Club begins publishing a monthly newsletter for its members.
• 1974: The first issue of Hustler Magazine is published.
• 1976: Flynt founds Larry Flynt Publishing Inc.; he is tried in Cincinnati on charges of obscenity, pandering, and organized crime, and convicted on all counts.
• 1978: Flynt survives an assassination attempt that leaves him paralyzed from the waist down.
• 1984: Televangelist Jerry Falwell sues Flynt over Hustler ad parody featuring Falwell; Flynt is found guilty on one of the charges.
• 1986: Larry Flynt Publishing begins producing other magazines, including some mainstream titles.
• 1988: The Supreme Court overturns Flynt's conviction in the Falwell case.
• 1998: Flynt arrested in Cincinnati on 15 counts of obscenity and corruption; he takes out ad in Washington Post, offering payment for evidence of illicit sexual relations involving high-ranking politicians.
• 1999: Flynt settles Cincinnati case with plea bargain.