Playboy, Inc.PLBY
Playboy, Inc. Commitments Disclosure
Commitments and Contingencies
Leases
Our principal lease commitments are for office, retail store and warehouse spaces under noncancellable operating leases with contractual terms expiring from 2026 to 2037. Some of these leases contain renewal options and rent escalations.
We had $4.4 million in cash collateralized letters of credit related to our corporate headquarters lease, the lease of office space in Miami Beach, and Honey Birdette’s term deposit in relation to its Sydney office lease as of December 31, 2025, and $1.8 million in a cash collateralized letter of credit related to our corporate headquarters lease and Honey Birdette’s term deposit in relation to its Sydney office lease as of December 31, 2024.
We subleased space in our corporate office for fixed rent, which arrangement expires in 2027. We also subleased a part of our former New York office space for a period that approximated the term of such lease that expired in 2024.
In the second quarter of 2025, we renegotiated the terms of a lease related to a formerly disposed business, which remained with us, and was subleased to a third party, to shorten the lease term expiration date from 2031 to 2029. As a result, we recorded a $0.9 million reduction in right-of-use assets and related lease liabilities in the consolidated balance sheet as of December 31, 2025. All other terms of such lease remained the same.
In relation to the operations of Honey Birdette, we had 51 retail stores, one warehouse and two office spaces as of December 31, 2025, which Honey Birdette leases and operates in Australia, the United States and the United Kingdom for the purpose of selling its products to customers. The majority of the leases are triple net leases, for which Honey Birdette, as a lessee, is responsible for paying rent as well as common area maintenance, insurance and taxes. Lease terms run between and 10 years in length, with the average lease term being approximately five years and, in many cases, include renewal options.
Lease cost associated with operating leases is charged to selling, general and administrative expense, with an immaterial amount charged to cost of sales, in the year incurred and is included in our consolidated statements of operations. Most of our leases include one or more options to renew, with renewal terms that generally can extend the lease term for an additional to five years. The exercise of lease renewal options is at our sole discretion. The extension period has not been included in the determination of the right of use asset or the lease liability, as we concluded that it is not reasonably certain that we would exercise such option.
Finance leases as of December 31, 2025, and their related cost for the year ended December 31, 2025, were immaterial and were included in Other noncurrent assets in our consolidated balance sheet as of December 31, 2025, with the amortization of the related right-of-use assets being included in selling, general and administrative expenses and interest on the lease liabilities being included in interest expense in our consolidated statements of operations for the year ended December 31, 2025. There were no finance leases for the year ended December 31, 2024.
As of December 31, 2025 and 2024 the weighted average remaining term of these operating leases was 3.9 years and 4.5 years, respectively, and the weighted average discount rate used to estimate the net present value of the operating lease liabilities was 8.2% and 7.2%, respectively. Cash payments for amounts included in the measurement of operating lease liabilities were $8.6 million and $8.5 million for the years ended December 31, 2025 and 2024, respectively. Right of use assets obtained in exchange for new operating lease liabilities for the years ended December 31, 2025 and 2024 were $3.9 million and $2.3 million, respectively.
Net lease cost recognized in our consolidated statements of operations as of December 31, 2025 and 2024 is summarized in the table below (in thousands).
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating lease cost | $ | 7,165 | $ | 7,803 | |||||||
| Variable lease cost | 1,781 | 1,626 | |||||||||
| Short-term lease cost | 1,504 | 1,818 | |||||||||
| Sublease income | (1,668) | (880) | |||||||||
Total | $ | 8,782 | $ | 10,367 | |||||||
Maturities of our operating lease liabilities as of December 31, 2025 were as follows (in thousands):
| Years ending December 31: | Amounts | |||||||
| 2026 | $ | 8,837 | ||||||
| 2027 | 6,258 | |||||||
| 2028 | 3,877 | |||||||
| 2029 | 3,220 | |||||||
| 2030 | 1,892 | |||||||
| Thereafter | 1,995 | |||||||
| Total undiscounted lease payments | 26,079 | |||||||
| Less: imputed interest | (3,903) | |||||||
| Total operating lease liabilities | $ | 22,176 | ||||||
| Operating lease liabilities, current portion | $ | 7,406 | ||||||
| Operating lease liabilities, noncurrent portion | $ | 14,770 | ||||||
Future minimum lease payments that are contractually due to us from our sublease arrangements as of December 31, 2025 were as follows (in thousands):
| Years ending December 31: | Amounts | |||||||
| 2026 | $ | 2,188 | ||||||
| 2027 | 1,481 | |||||||
| 2028 | 429 | |||||||
| 2029 | 218 | |||||||
| Total | $ | 4,316 | ||||||
On August 11, 2025, through our wholly-owned subsidiary, Playboy Enterprises, Inc., we entered into a triple net lease (the “Lease”) with RK Rivani LLC, a Florida limited liability company (the “Landlord”), pursuant to which, among other matters and on the terms and subject to the conditions set forth in the Lease, we leased from the Landlord approximately 20,169 square feet of office space in Miami Beach, Florida, for a term of 11 years, with lease payments commencing in August 2026, following renovations of the office space. As we did not take possession of the office space as of December 31, 2025, it is not reflected in our consolidated financial statements or in the tables above. We expect to account for the Lease as an operating lease under Accounting Standards Codification, Topic 842, Leases. The future undiscounted fixed non-cancelable payment obligation pertaining to the Lease is approximately $27.1 million.
Legal Contingencies
From time to time, we may have certain contingent liabilities that arise in the ordinary course of our business activities. We accrue a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount.
AVS Case
In March 2020, our subsidiary Playboy Enterprises International, Inc. (together with its subsidiaries, “PEII”) terminated its license agreement with a licensee, AVS Products, LLC (“AVS”), for AVS’s failure to make required payments to PEII under the agreement, following notice of breach and an opportunity to cure. On February 6, 2021, PEII received a letter from counsel to AVS alleging that the termination of the contract was improper, and that PEII failed to meet its contractual obligations, preventing AVS from fulfilling its obligations under the license agreement.
On February 25, 2021, PEII brought suit against AVS in Los Angeles Superior Court to prevent further unauthorized sales of Playboy-branded products and for disgorgement of unlawfully obtained funds. On March 1, 2021, PEII also brought a claim in arbitration against AVS for outstanding and unpaid license fees. PEII and AVS subsequently agreed that the claims PEII brought in arbitration would be alleged in the Los Angeles Superior Court case instead, and on April 23, 2021, the parties entered into and filed a stipulation to that effect with the court. On May 18, 2021, AVS filed a demurrer, asking for the court to remove an individual defendant and dismiss PEII’s request for a permanent injunction. On June 10, 2021, the court denied AVS’s demurrer. AVS filed an opposition to PEII’s motion for a preliminary injunction to enjoin AVS from continuing to sell or market Playboy-branded products on July 2, 2021, which the court denied on July 28, 2021.
On August 10, 2021, AVS filed a cross-complaint for breach of contract, breach of the implied covenant of good faith and fair dealing, quantum meruit and declaratory relief. As in its February 2021 letter, AVS alleges its license was wrongfully terminated and that PEII failed to approve AVS’ marketing efforts in a manner that was either timely or that was commensurate with industry practice. AVS is seeking to be excused from having to perform its obligations as a licensee, payment of the value for services rendered by AVS to PEII outside of the license, and damages to be proven at trial. The court heard PEII’s motion for summary judgment on June 6, 2023, and dismissed six out of 10 of AVS’ causes of action. AVS’ contract-related claims remain to be determined at trial, which has been rescheduled for August 10, 2026. In addition, PEII filed a complaint against Sunrise Brands based on their participation in AVS’s misconduct, as well as their own direct misconduct. Both cases have been related together by the court and will be tried together, for both pretrial and trial purposes. We believe AVS’ remaining claims and allegations are without merit, and we will defend this matter vigorously.
New Handong Arbitration
On February 8, 2024, PEII and certain of its subsidiaries initiated arbitration in the Hong Kong International Arbitration Centre (the “Arbitration”) against PEII’s terminated China licensee, New Handong Investment (Guangdong) Co., Ltd. (“New Handong”). In October 2023, PEII’s subsidiary terminated its license agreement with New Handong due to ongoing, uncured material breaches by New Handong. PEII and certain of its subsidiaries are seeking damages, including the payment of outstanding guaranteed minimum royalties, the payment of all guaranteed minimum royalties for the remainder of the term of the agreement, and other contractual damages for a variety of breaches. Such breaches included unauthorized sales of products, underpayment of earned royalties, failure to use approved trademarks and affix official holograms to all products, and the use of unapproved sublicensees. PEII and certain of its subsidiaries also sought a declaration that the termination of the agreement was lawful and valid and the issuance of a legal order to require New Handong to refrain from any further manufacture, sale, distribution or other use of any Playboy intellectual property or products.
On September 5, 2025, PEII received the decision of the Arbitration tribunal (the “Tribunal”), which found in favor of PEII in connection with its claims, and as a result ordered, among other things, that: (i) the termination notice issued by PEII to New Handong was found to be lawful and effective, (ii) New Handong must cease any further use of Playboy property and materials, including but not limited to the production, sale, or distribution of Playboy-branded products, (iii) New Handong is required to make payments to PEII for guaranteed royalties outstanding at the time of termination, a termination fee, and unpaid marketing expenses, plus interest thereon, and certain other fees and expenses, totaling approximately $81 million, and (iv) all of New Handong’s counterclaims were dismissed. In addition, per the terms of the Tribunal’s decision, as payment of the amounts awarded to PEII were not made in full to PEII by September 20, 2025, interest has been accruing on the amounts owed from the award date to the date of payment at an annual rate of 8.25%. The decision of the Tribunal is final; however, New Handong has not complied with the requirements of such decision. PEII and the Company are seeking enforcement of the Arbitration award in China through the Chinese courts. There can be no assurance that New Handong will comply with a Chinese court’s actions in the future, including making the required monetary payments to PEII and the Company.
Former Model Case
On July 5, 2024, a former Playboy model filed a complaint against the Company, certain of the Company’s affiliates and A&E Television Networks LLC (“A&E”, and collectively, with the Company and its affiliates, the “Defendants”) in California Superior Court for claims arising from A&E’s “Secrets of Playboy” show (the “A&E Show”) which showed certain Playboy videos that depicted the former model. Neither the Company nor its affiliates participated in any way in the creation, production, distribution or airing of the A&E Show, nor did the Company or its affiliates license or otherwise authorize use of the videos in the A&E Show. The complaint alleged, among other things, invasion of privacy, appropriation, distribution of private explicit video, negligence and unfair competition by the Defendants to the detriment of the former model. The lawsuit sought at least $2 million in damages from the Defendants. As neither the Company nor its affiliates participated in any way in the creation, production, distribution or airing of the A&E Show, nor did the Company or its affiliates license or otherwise authorize use of the videos in the A&E Show, this case was dismissed as to the Company and its affiliates, with prejudice, on April 1, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 29, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 16, 2022 | |
| 2020 | Apr 15, 2021 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.