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Executive Seat: Milton, Not So Private

Executive Seat: Milton, Not So Private

August 16, 2011
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" We created an enormous brand with Private. Today we are the only adult company allowed to stay in Cannes and promote ourselves during the film festival. "

Anyone who doesn’t think that Berth Milton could be the most interesting man in adult entertainment had better reconsider.

That’s because there will be a bigbudget mainstream movie detailing the amazing life of Milton, the chairman and CEO of Private Media Group. William Morris Endeavor already has signed on to a $45 million commitment to package and market the movie, and that’s not all.

But one scene that hasn’t yet played out is Milton’s quest to keep his throne at Private.

Last month a Las Vegas judge invalidated the company’s latest shareholders’ vote for board of directors.

As a result, Private has been ordered by a judge to hold a new shareholders’ vote in which a debt holder will try to install new directors.

The ruling at Clark County District Court is the result of litigation between former CEO Ilan Bunimovitz and Private since his firing in July 2010.

In the suit, Bunimovitz claims he was terminated for demanding a probe of Milton’s alleged “self-dealing” transactions.

Bunimovitz’s Nevada lawsuit, which included Private creditor and co-plaintiff Consipio Holding BV, alleges mismanagement of the company’s business by Private’s three independent directors and current CEO Berth Milton.

Judge Elizabeth Gonzalez in her ruling said that Consipio claims to be owed $5.5 million by Private and that this debt is secured by 5.6 million shares of Private stock, about 27 percent of the shares of Private’s outstanding shares.

But Consipio was only allowed to vote 1.65 million of those shares, and its directors’ slate lost by less than 600,000 shares, Gonzalez wrote in her ruling.

Gonzalez said the other 3.95 million shares were “concealed” by Milton, who had been required to provide them to Consipio after Private defaulted on its debt to Consipio.

“The election is declared invalid,” Gonzalez wrote in her order, adding shares held by Milton “in street name” may not be counted in the new election.

But with the script not yet flushed out, the show must go on.

The major documentary detailing Milton’s story will debut next year, with principal photography already completed in his Swedish homeland.

“It’s very exciting,” says Milton about his biopic. “This is the world’s largest packaging company for movies. They put everything together — the actors, the director, the music, the marketing — in the movie about my life. It will start with this little guy who comes from above the Arctic Circle who ends up throwing the coolest parties in Cannes, with all the things that happened in-between.”

What happened in-between certainly rates a movie. Here is Milton’s business story in his own words:

“I left home when I was 15 and worked on a ship in South America, so I got to see all of South America before I was 20. When I came home I had military service, which is obligatory in Sweden. I was learning to be a sea engineer but wanted something else. With a friend we decided to buy the first digital watches. We started with just 10 and after selling those at profit, bought more and more. It just took off from there.

“I started my first real business when I was 22, importing watches from Hong Kong. That became so successful because I was the first in the world to offer branded watches for companies by putting their logos into the watch. To manufacture a watch at that time cost $1.50, and I sold them for $50.

“I went to the Shell Oil headquarters to see if they had interest in buying watches that said ‘Shell’ for all their employees at Christmas. They said it would cost too much for their 2,500 employees, but they gave me permission to sell to individual gas stations. I ended up selling 5,000 watches.

“When I was 25 years old I had a factory in China. Today everybody talks about [outsourcing to] China but back then nobody thought of it. My factory had 200 people making watches and telephones. I got my business ideas from different parts of the world.

“And I was also in real estate. I was part owner of the largest real estate company in Brussels.”

The story of Milton’s sojourn into adult with Private Media Group is no less amazing, because it happened almost by accident. Private was just a magazine when he bought it from his father, who started it in 1965.

“The reason I ended up with Private was that I had a hotel in Ibiza,” Milton recalls, “and while I loved to play golf, there was only one golf course there at that time. So I started commuting to where my father lived. He was pretty sick then and didn’t want to continue Private [Magazine] because he did all the work. He took the pictures and made the layout, and basically everything except printing the magazine. So I bought it from him and it became a major success in less than a year.

“When I started in 1990 I changed all the rules for adult. We changed the distribution, the content and came up with tons of ideas. Before I started, though, I’d promised myself never to run an adult company. But for various reasons I bought Private from my father and implemented rules I’d learned from being in normal mainstream businesses. We followed the models of companies like Disney or Warner’s with the movies we produced and distributed.

“We created an enormous brand with Private. Today we are the only adult company allowed to stay in Cannes and promote ourselves during the film festival.”

Studying consumer behavior is the key to the incredible Private success story in Milton’s opinion, and it has always been his basic philosophy.

“I realize that you can’t change consumer behavior,” he stresses, “so you just have to use the tools that are out there to understand why people are doing whatever, and just use that. We know that 95 percent of the world’s population today is consuming adult content one way or another. We see what they want and try to meet it. Like right now we’re starting content production again, but in a different way. We try to be high end on the usual low end of adult product, so we’re forgetting the big blockbuster movies. They’re good for Playboy TV but not for websites or tube sites, because people don’t want to spend a long time there, and that’s the consumer behavior now.

“My goal always has been to take the enormous amount of porn traffic and package it like mainstream. I couldn’t see why porn should be so different. That’s why [in the beginning] I started to put Private product in newsstands, because when you’re in sex shops you’re very limited. Then we started putting product and videos into gas stations which led to being the greatest distribution network in the world.”

Recently Private has branched out into a bold and exciting new venture with various top-notch hotels, which may cause a sensation in the adult industry.

“Originally I wanted to do a very clean swingers’ hotel with a club,” says Milton. “We started by signing with a hotel in Barcelona, which is owned by one of that city’s largest banks and insurance companies. I wanted some of the rooms to be webcams so you could choose if you wanted to stay for free by just turning on the webcam. If you want to pay full price, you don’t turn on the webcam.

‘The big question everyone had was how can we be sure they will do something in the hotel room? We’d have people staying for free with nothing happening, and our clients would leave. So we’re introducing a point system in which no room is actually free, but you have the webcam opportunity there. You can earn points by just dancing for the webcam. There is no obligation to have sex. With at least 10 hotels, customers will be encouraged to do something for the webcam because your points can be used in all the 10 hotels. This gives you the possibility to stay for free in the next hotel. So if you have sex in the Barcelona hotel, you can earn free drinks at the hotel in the Bahamas. That’s the whole concept.

“We convinced the Barcelona hotel to turn itself into a totally adult swingers’ hotel. It’s a fivestar hotel and I’m putting very good criteria into it, so it’s like an adult Club Med, except it will be a totally different experience in every hotel. It’s just a more spicy version with an offer of free with webcam.

“Last week I was in Monaco, where we reached an agreement to do a hotel operation there with that city’s most wealthy family. I now have three hotels signed up for our hotel project. I’d like to sign up 10 before I go live. The interest has been enormous. I have 25 hotel operators, so to combine them would mean hundreds of hotels. But I’m going to be very selective and start with just 10 and see how it goes. That’s the beauty of doing business. You can always change your mind.”

With so much going on and so many new projects on the burner and a corporate battle, it’s hard not to wonder what a typical day for Berth Milton might be.

“A typical day doesn’t exist,” he muses. “I wish it did.”


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