Penthouse was started in 1965 in England and began to be published in America in 1969. Penthouse was an attempt to compete with Hugh Hefner's Playboy on several levels. One approach Guccione took was offering editorial content that was more sensationalistic than Playboy. The magazine's writing was aimed more at the middlebrow reader than Hefner's upscale emphasis, with stories about government cover-ups and scandals.
Due to his lack of money and other resources, Guccione himself photographed most of the models for the magazine's early issues. Lacking professional training, Guccione applied his knowledge of painting to his photography, establishing the diffused, soft focus-look that would become one of the trademarks of the magazine's pictorials. Guccione would sometimes take several days to complete a shoot and, as this was during the sexual revolution, reportedly had sex with many of his models by his own admission.
As the magazine grew more successful, Guccione openly embraced a life of luxury; his former mansion is said to be the largest private residence in Manhattan. However, in contrast to Hugh Hefner (who threw wild parties at his Playboy Mansions), life at Guccione's mansion was remarkably sedate even during the hedonistic 1970s. Reportedly, Guccione once had a party guest thrown out simply for jumping into the swimming pool fully clothed.
The magazine's pictorials offered more sexually explicit content than was commonly seen in most openly sold men's magazines of the era, being the first to show female pubic hair and then full-frontal nudity. Penthouse has also, over the years, featured a number of authorized and unauthorized photos of celebrities such as Madonna and Vanessa Lynn Williams. In both cases, the photos were taken earlier in their careers and sold to Penthouse only after Madonna and Williams became famous. In Williams' case, this led to her resignation as Miss America in 1984; the issue in which Williams was first featured also included a layout featuring porn actress Traci Lords, who was later revealed to be underage during most of her porn career (including her Penthouse session). By the early 1990s, the magazine was showing sexual penetration in many of its photo layouts, something the American porn magazine industry did not adopt until later in the decade.
The famous Penthouse Forum column, consisting of letters from readers writing about their (alleged) sexual experiences, was and remains one of the most popular features of Penthouse, with several books of the letters in publication.
Penthouse enjoyed great success in the 1970s and 1980s, and Guccione used some of this fortune to make a major movie (Caligula (1979) with Malcolm McDowell) and to create Omni, a magazine of science fiction and science fact, and Spin, a music magazine intended to compete with Rolling Stone by being more “edgy”. In the early 2000s, Penthouse published a short-lived comic book spin-off entitled Penthouse Comix featuring sexually explicit stories.
Penthouse was eventually superseded in notoriety by Larry Flynt's Hustler, which went further with both pictorial and editorial content than Guccione was willing to go. Penthouse found itself in a niche between Playboy's upper-class pretensions and Larry Flynt's blue collar no-holds-barred approach, and began to lose the significance it once had.
Numerous unsuccessful investments on Guccione's part, including a never-built nuclear power plant and casino (which all-told lost in excess of $100 million USD), added to his publishing empire's financial strain. Guccione's efforts to regain sales and notoriety, which included attempts to get Monica Lewinsky to pose for the magazine (which was parodied in a sketch on Saturday Night Live in 1998, but didn't have someone impersonating Guccione) and offering the Unabomber a free forum for his views, were not successful in reviving the magazine.
With the rise in online access to erotica and pornography in the 1990s, Penthouse's circulation numbers began to suffer even more. In 2003, General Media (the publishing company for Penthouse) declared bankruptcy, and Guccione himself resigned as chairman and CEO of Penthouse International, Inc. The magazine as of June 2006 was still in publication and had an online presence; its circulation was estimated at 500,000, roughly a tenth of what it was in at its peak.
Guccione's English-reared son, Bob Guccione Jr. (b. 1956), was given editorship of Spin, but father and son soon fell out over editorial decisions, and Bob Jr. eventually found independent investors to continue the magazine. Father and son remain estranged, despite the senior Guccione's recent health problems.
Guccione married his long-time companion, Kathy Keeton, a native of South Africa. She died in 1997 following surgery. He began a cancer research foundation in her honor. Guccione has in recent years been treated for throat cancer, and is now fed through a tube directly into his stomach.
Guccione lived in the Milbank Mansion, the largest private residence in Manhattan. According to The New Yorker, “It’s one of the biggest private houses in Manhattan, with 30 rooms, and it costs $5 million a year to maintain."
In November 2003, the mansion on the Manhattan’s Upper East Side was foreclosed on by Kennedy Funding of New Jersey, the mortgage holder along with an affiliate of multi billion-dollar hedge fund Elliot Associates of New Jersey. In January 2004, a group of investors came to Guccione’s rescue during his Sheriff-enforced eviction. A London-based investor named Jason Galanis lead an investment group that purchased the house for $26.5 million in cash.
The home was purchased by NY Real Estate LLC, an entity set up to acquire the mansion. Galanis contributed $2.6 million, and two New York hedge funds teamed called Laurus Funds and Alexandre Asset management (today reportedly $1.6 and $4 billion respectively) made a mortgage loan of $24 million to NY Real Estate LLC, which was owned by Penthouse International, the parent and debtor-in-possession of General Media.
As a result of the continuing contentious bankruptcy which lasted over a year, the promissory notes due to Laurus were considered in technical breach of covenants which resulted in severe financial penalties in excess of $8 million. Penthouse International elected to forego refinancing the house due to the combination of the penalties and the unfavorable lifetime lease of $1.00/year that was granted to Guccione, which made the property unmarketable. Laurus sued Guccione to take possession of the house from the tenant. It was reportedly sold for $49 Million to Wall Street financier Philip Falcone.
While unsuccessful as a recognized artist, Guccione was a painter and a world-renowned collector of fine art. His art collection included extensive Impressionist Art. Highlights of the Guccione collection included a portrait by Amedeo Modigliani (1884-1920) and a portrait of the artist's son, Paulo, by Pablo Picasso (1881-1973).
The Guccione art collection was sold at auction by Sotheby's in November, 2002 to pay Guccione's personal debts originally incurred in the Atlantic City venture. The collection was appraised by Christie’s at $59 million two years before. However, September 11, 2001 had depressed the art market and the Guccione collection failed to achieve its appraised price. The aggregate sale price was $19 million, which was used to pay Swiss Re, the lender. Swiss Re sued Guccione in New York State Court for a $4 million shortfall on the loan balance.
Guccione had a history of leveraging his prized asset. He borrowed $20 million from AIG, the insurance company. Subsequently they refinanced with Swiss Re Insurance.
