Playboy has entered agreements to sell a 50% stake in its China, Hong Kong and Macau business to UTG Brands for a total of $122 million. The consideration includes $45 million payable over two years, $67 million in guaranteed distributions over eight years and $10 million in brand support payments, with a $9 million deposit already received and closing expected by March 31, 2026.

The company will use at least $50 million of the proceeds to reduce debt, aiming to lower interest expense and de-leverage the balance sheet. Management expects the guaranteed distributions to match or exceed current net cash flows from China and for the transaction to be immediately accretive to earnings.

UTG Brands Management Group will assume day-to-day operations of the joint venture, leveraging its supply chain, product development and retail distribution network in Greater China. Playboy retains a 50% equity stake and anticipates incremental distributions as UTG expands the business beyond current cash flow levels.

This partnership supports Playboy’s asset-light strategy by simplifying its operating model and focusing on licensing and brand support services. Continued 50% ownership positions the company to benefit from future joint venture growth in one of the world’s largest consumer markets while preserving capital efficiency.