Playboy Enterprises Inc has announced that it has reached an agreement with American Media, Inc. (AMI) for the outsourcing of all Playboy magazine functions excluding the editorial product. 

AMI will assume responsibility for the production, circulation, advertising sales, marketing and other support services of both Playboy magazine and the company's other domestic publications.

Scott N. Flanders, chief executive officer of Playboy Enterprises Inc. said: "By joining forces with American Media, we will be able to significantly reduce our cost structure and leverage the economies of scale related to manufacturing, distribution and marketing that are available to this large, multi-title publisher. This agreement also is expected to improve our top-line results as we benefit from AMI's proven skill in growing newsstand and advertising sales. This partnership will enable us to generate profits from our magazine operations in 2011.”

Both companies will begin working together immediately with a goal of completing the transition by March 2010.