Maxim stirred controversy once again by running a pay-to-play contest to determine the model who will grace its January/February cover issue.
The winner, Janel Tanna, will earn a $25,000 prize.
Maxim said a portion of the proceeds from readers who paid to vote would benefit Homes for Wounded Warriors, the charity started by former NFL star Jared Allen. So far, so good right?
But many of the models in the contest are angry over the way they were recruited into hawking for donations for the charity as a way to boost their own vote totals.
And unbeknownst to most readers, if it’s the same as last year’s contest, 75 percent of the funds actually go to boost money-losing Maxim’s own bottom line as it tries to turn its first profit since Biglari Holdings bought the beer-and-babes magazine in February 2014.
“Not saying she [Janel Tanna] isn’t beautiful because she is,” said a model who went by the Instagram handle Stefmski83. “It was all about money. … The weight of using wounded warriors as a ploy to gain votes to me is seedy,” she complained on her post, where she noted that her husband had earned a Purple Heart after being wounded in action.
Here’s how the contest works and generates cash for Maxim. Readers are allowed to vote for free once a day for their favorite models. Those who want to cast more votes can do so, but at a price.
Each subsequent vote costs $1, with a minimum purchase of 10 additional votes.
According to Instagram posts by some models, the magazine’s website reportedly began blasting emails on certain dates, saying that votes — for 24- or 36-hour periods — would count two for one.
Oddly, said one source, some of the models in the finals and semifinals only began receiving votes in the two-for-one days, raising suspicions about the origins of the funds. The source said it appeared it was no longer a fan vote: “People complained to Maxim, but they did not care as long as the money was rolling in.”
The magazine’s emails said the contest would benefit the veterans’ charity — but neglected to add that most of the money would go to Maxim.
One semifinalist model, Janae Sergio, a once-homeless teen who enlisted in the Navy at age 18 and was for a while the favorite before the two-for-one blitzes started, said on Instagram, where she goes by Janae_perfectlyflawed.: “It’s a shame Maxim promotes buying your way to the top. Very shady.”
While Maxim did make a $500,000 contribution to the Homes for Wounded Warriors charity this year, after last year’s contest, Maxim announced that only 25 percent of that year’s contest funds went to charity, meaning that 75 percent went straight to Maxim’s bottom line.
The contest last year generated an estimated 19 percent of the company’s total 2017 revenue of $7.7 million.
SEC filings show Maxim’s operating loss was $874,000 in 2017. Its revenue for the year tumbled to $7,708,000, from $9,165,000 in 2016.
CEO and Editor-in-Chief Sardar Biglari promised investors to post a profit by the end of 2017 but then pledged it had turned the corner heading into 2018.
In his letter to investors earlier this year, he wrote, “Clearly, Maxim is no longer exclusively a magazine. In 2017, licensing generated $3.2 million, up from $2.1 million in the preceding year. In sum, for the year we operated at near break even and now expect to build profits throughout 2018.”
According to regulatory filings, revenue fell to $1.5 million in the third quarter ended Sept. 30, from $1.9 million a year earlier. The filings said it eked out a $111,000 operating profit in the quarter, up from a $45,000 operating profit in the same quarter a year earlier, but it was still posting a loss of $90,000 through the first nine months.
Biglari did not return a call seeking comment.
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