The Twilight of Bob Guccione

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Solving all the energy problems of the earth proved to be an expensive proposition, even for a man of Guccione's enormous wealth. He planned to supplement the funding with cash from a new revenue source: casinos. Owner of a prime piece of real estate in Atlantic City, he had begun work on the Penthouse Casino back in 1978. Typically, Guccione funded the massive project entirely with his own money. "People were saying to me, 'You have to be careful; they might not give you a license,' " Guccione recalls. "But I said, 'There's no way in the world they cannot license me. I have a completely clean record.'" Today he admits that he might have been naive in his assumptions about the gaming commission, which was under intense pressure to keep out anyone who carried even a whiff of sleaze. Guys like ... Bob Guccione. "The impression they must have had of me was: a Sicilian pornographer coming in to own a casino, with no partners. That spelled Mafia to them." Guccione denies that he has ever been connected to the mob. "I wouldn't be in the trouble I'm in if I was Mafia," he says, reasonably enough. Bob Jr. concurs. "My father has always been clean. Ironically, it has taken this bankruptcy for people to finally believe him."

But suspicions about Guccione — exacerbated, he insists, by an FBI probe (that turned up no wrongdoing on his part) — scuttled his chances in Atlantic City. A bank that had, he says, promised him a loan of $125 million to complete the casino backed out. By 1980, he had sunk some $65 million of Penthouse profits into the stalled casino project. "It was an albatross around his neck," says his former business adviser.

That albatross only grew heavier as Penthouse saw its sales decline as the 1980s progressed. The advent of AIDS, the aging of the baby boomers and the election of Ronald Reagan seriously chilled the sexual revolution. Several major retail chains — 7-Eleven, Rite Aid, Kmart, CVS — yanked Penthouse from their shelves, costing Guccione tens of thousands of sales off the newsstand, a huge blow to his bottom line. The rise of videocassette players — and porn videos — did further damage. "Why spend four bucks on a magazine," says Joe Brooks, "when you could spend ten bucks and see a girl move and hear her moan?" In July 1984, Penthouse did make publishing history by selling the single largest number of issues off the newsstand of any publication ever: 5.4 million copies of a spread featuring recently crowned Miss America Vanessa Williams, who, some years earlier, had posed nude in a pseudolesbian embrace with another model. But that cash bonanza was a one-off anomaly, and sales continued their slide.

Successive waves of bad luck now broke over Guccione. In 1985, he was hit with an IRS bill on back taxes totaling $45 million. Facing no choice, he pulled the plug on the nuclear-fusion project and sold off the rusting, half-completed Penthouse Casino for a fire-sale price, the proceeds of which went to the IRS. Along with lawyers' fees, interest and other incidentals, this brought Guccione's losses in Atlantic City to $145 million. Meanwhile, decades of lavish spending on his magazines had been paid for by huge loans, totaling tens of millions. Unable to keep up with his payments, Guccione was forced in 1993 to sell some $80 million worth of bonds in the company, repayable at ten percent interest, in seven years. Guccione was gambling big that he could reverse Penthouse's sales slide.

But in the 1990s, explicit sex offerings on cable and pay-per-view television further eroded his magazine's share of the softcore market. Then came the rise of the Internet. Penthouse's sales went into free fall, dipping below a million, then dropping like a stone to 600,000 copies a month. Efforts to expand into cyberspace failed to rescue Guccione. In a filing with bondholders, General Media revealed that widespread credit-card fraud had swallowed its Internet profits. To stay competitive, Guccione took Penthouse hard-core with excursions into fisting, anal sex, cum shots and peeing. He says he had no choice: "A soft-core magazine today just doesn't have a chance." Advertisers, however, left in droves — especially over the pissing. "His lawyers sat down with him and said, 'C'mon, Bob, don't commit public suicide, cut out the pissing,'" says Joe Brooks. "But Bob didn't stop. It's like talking to his dog." Profits continued to shrink, and Guccione was forced to fold Omni and Longevity.

Things were even worse on the home front. In 1995, Kathy Keeton was diagnosed with galloping breast cancer that spread quickly to her stomach and liver. After a two-year-long battle, she died in 1997 at age fifty-eight. Guccione was inconsolable. He obtained a special dispensation and had Keeton buried on the lawn of their country estate. He has left her name on the Penthouse masthead, where she is still identified as vice chairman of General Media. In a 1999 television interview, he broke down discussing Keeton's death, sobbing, "I've never fully recovered." To me, Guccione, misty-eyed, choked out, "She was a monumental part of my life." Indeed, some close to Guccione say her influence extends beyond the grave. In her final months, Keeton befriended a pixieish ex-model named April Warren, later rumored to be Keeton's hand-picked successor for Guccione's affections. The couple remains together to this day.

From the Beginning, Guccione viewed Penthouse as a dynasty, himself the patriarch of a clan that, like the Kennedys (which went from bootlegging to the White House in a generation), would go from porn to the presidency in his lifetime. When his second son, Tony, was a child, Guccione spoke of how he would become president. When Tony later pointed out that he was born in England and thus could not occupy the Oval Office, Guccione replied, "Senator, then." But those dynastic dreams, like so much else, have withered. Guccione is estranged from all but one of his five children (he still speaks to Tonina, daughter from his first marriage). "My father was extremely loyal right up to the point when people crossed him or slighted him," says Tony. "And then he'd cut them off with no regret. It was a confirmation of his own strength."

First to be banished was Bob Jr., known to his siblings as Bobby. A shorter, gap-toothed, sweeter-natured version of his father, Bobby, now forty-eight, grew up "hero-worshiping" his dad. Told by his father, "You'll never be anything without me," Bob abandoned dreams of being a writer and at nineteen joined Penthouse, where he was groomed to take over the company. In 1985, he and his father launched Spin but soon fell out over control of the magazine (According to an E! documentary, Dad wanted to put Pia Zadora, wife of a big advertiser, on the cover; Bobby thought she didn't quite fit Spin's alternative-rock image). Guccione tried to fold Spin, but Bobby had ownership of the name. He found outside investors and left his father's company. The two have not spoken in sixteen years, despite Bobby's repeated efforts to patch things up. "You have to ask, 'Am I going to be hamstrung by this emotionally forever?'" says Bobby. "You have to accept it when someone doesn't want to know you."

With Bobby's departure, Tony, now forty-two, was tapped to carry the torch. Six feet, two inches tall, classically handsome, with a full head of hair, good teeth and an upmarket London accent, Tony was the only one of his children whom Guccione insisted go to college. He graduated magna cum laude from Harvard with a degree in economics. But once Tony took over, he butted heads with Guccione over his plans to restructure the company and modernize the Penthouse brand. In 1996, stymied in his efforts to get his father to adopt any of his ideas for rescuing the sinking company, Tony resigned as executive vice president of General Media. As he puts it, "Not everyone can be bent to my father's will all the time." Guccione evicted Tony from the loft he'd bought for him in downtown New York. Six months later, he sued Tony for allegedly pirating the Penthouse domain name. "All the assertions were entirely without merit," says Tony. "But that was just my father's way of letting me know he could still touch me." The two have not spoken in eight years.

Next up was Guccione's daughter Nina, now forty-four. A striking auburn-haired woman, with her dad's dimpled smile and greenish eyes, she grew up, like her other siblings, with an "obsessive adoration" for her father; she moved into the House with him and the Pets when she was sixteen. It was not easy to be the daughter of a famous pornographer. Whereas her brothers could boast of dad's work to friends — and (against their father's strict prohibitions) sometimes date the Pets — Nina was embarrassed and troubled by Penthouse and was consigned to comparing herself, unfavorably, to her father's harem of flawless Pets, many of whom he was sleeping with. "Years and years of therapy," she says, have helped her to resolve some of the traumas this caused. Upon Tony's departure in 1997, she was asked to help run the company. She threw herself into the role with a gusto that only a daughter desperate for her father's approval could. But like Tony, she found her father dismissive of her ideas. She quit in early 2002. "When you don't do what Dad wants you to do," she says, "you're out of his life." Guccione has not spoken to her since she left, and she says he has disinherited her. Nicky, Guccione's youngest child, had been put in charge of Penthouse's video division, but he fell out with his father last year and, according to Nina, was also disinherited — although father and son do retain some contact, since Nicky, who lives upstate with his wife, a former Pet of the Year, has supplied Guccione with his sole grandchild, a two-year-old boy.

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