Anna and the fall of a porn king

Bob 'Penthouse' Guccione made a disastrous error with a set of fuzzy photos. These are desperate times for old-fashioned girlie mags, says Andrew Gumbel

Einstein liked to say that only two things were infinite, the universe and human stupidity, although he wasn't sure about the former. For an example of the latter, you could do worse than turn to Bob Guccione, the struggling publisher of Penthouse, who last week managed the extraordinary feat of getting sued twice over the same set of topless photographs and, in the process, so incensed two of the higher-profile women on the planet that he now faces the very real prospect of being driven to bankruptcy.

It may not quite yet be time for anti-porn crusaders to start dancing on Penthouse's grave – Guccione, for one, insists that he will be in business for years to come – but if you were looking for an emblematic moment in the decline and fall of the world's second most famous girlie magazine, you couldn't ask for better than this. It began 10 days ago, when the June issue of Penthouse hit the newsstands with the breathless announcement that it was featuring 12 photographs of the young Russian tennis star Anna Kournikova lying topless on a beach. That may not sound too exciting to you or me, but in the sweaty-palmed world of babe-hunters and porn freaks, news that Ms Kournikova's breasts were going to be exposed in public for the first time caused frissons of excitement that were telegraphed with lightning rapidity across the internet.

There was, however, a snag. It was obvious to just about anyone who'd ever watched a tennis match that the young woman in the pictures was not Anna Kournikova at all. She was, in fact, Judith Soltesz-Benetton, daughter-in-law of the head of the Benetton clothing empire, who recognised herself last weekend while watching a tabloid television show about the controversy.

It was equally obvious that the woman in the pictures had been photographed without her consent, since the shots were fuzzy and apparently taken from a distance with a paparazzi-style long lens.

Penthouse's readers went ballistic, and so did the two women. Ms Kournikova filed a defamation suit in federal court in Los Angeles, seeking an undisclosed amount of damages. Ms Soltesz-Benetton, meanwhile, went to court in New York where Penthouse is based to demand $10m in damages for the degradation she felt she had been made to suffer.

In her suit, she explained that the shots had been taken without her knowledge or consent while she sunbathed topless in Miami seven years ago. As the mother of a two-year-old son, and with another child on the way, this was the last thing she needed.

As she put it, rather colourfully, in an affidavit attached to the suit: "I cannot over-emphasise my horror at being displayed nude in a magazine issue that also, among other things, contains a fully nude pictorial of a woman performing fellatio on a plastic male member while purportedly fantasising about being a slave girl who is raped by an ancient Roman soldier." And that was just the beginning of it. The judge in the Soltesz-Benetton case ordered Penthouse to cease distribution of the magazine and pull the offending pictures off its website. Such an order would be damaging to any publication, but for Penthouse it came perilously close to the kiss of death since the magazine is already on the brink of insolvency and needs every cent it can get to pay off the interest on its crippling debt burden.

Naturally, the magazine sought to backtrack, apologising to all concerned and insisting it had made an "unintentional error", the worst in its 30-year publishing history. But the bowing and scraping made little impression. The apology, Ms Soltesz-Benetton's lawyer said, was "a month late and $10m short". It certainly didn't help that some of Penthouse's claims stretched credulity to breaking point, such as when it said it had examined the images "in painstaking detail" to check that they were really of Ms Kournikova.

This has not, to put it mildly, been Penthouse's finest hour. In fact, nothing has been going right at the magazine for a very long time now. Bob Guccione, no longer the suave Italian cat with the gold nugget jewellery, is 71, and unable to use his voice since developing throat cancer. Recently, he moved out of his lavish, 45-room Upper East Side town house along with his clutch of Rhodesian ridgeback dogs and his old masters art collection, because he – or rather the company – could no longer afford the $500,000 in annual upkeep.

He has squandered large chunks of his immense fortune on crazy schemes, including an ill-fated experiment in nuclear fusion and a botched expansion into casino ownership in Atlantic City, which was frustrated by a single elderly resident who refused to sell her property to him.

The magazine, meanwhile, has been knocked sideways by the advent of internet porn and has floundered in its attempts to stay relevant and appealing to its readers. The widespread view is that Guccione's big mistake was to move away from the nude portrait shots of Penthouse's heyday into hardcore sex – a move that cheapened his product, scared off many of his more conventional readers and put him in an entirely new realm of competition that he couldn't hope to beat.

Circulation has plummeted from a high of 4.7 million copies in the late 1970s to around 650,000 now, and the financial picture has turned little short of disastrous. Liabilities at Guccione's holding company, General Media International, now exceed assets by $22m. Penthouse recently laid off a quarter of its employees, and the company auditor said there was "substantial doubt" General Media could continue operating as a viable concern.

Penthouse is not alone in losing to internet porn. All the leading US adult magazines – Playboy, Hustler, Screw and the rest – have seen sharp declines in readership. As Al Goldstein, the publisher of Screw who faces a jail term for sexual harassment, said recently: "Porn in print is finished. There's just too much product out there on video and the internet." The future for all of them is clearly online, but in most cases they have jumped on to the bandwagon too late.

That said, Guccione has shown a particular talent for self-destructiveness, especially in the five years since his wife and business partner, Katy Keeton, died of cancer. There was, for example, a screw-up similar to the Kournikova fiasco three years ago – minus the lawsuits that time – when Penthouse published three pictures of what it said was a bona fide space alien. "A photograph of Jesus Christ might be comparable to the first real photo of an extraterrestrial. Otherwise, there's nothing that compares to this," Guccione himself enthused in print. The "alien" turned out to be a model from the UFO museum in Roswell, New Mexico. And it has only been downhill from there.