Playboy Enterprises Inc. (PEI) announced that it would outsource most operations of its namesake magazine to American Media Inc. with a goal of restoring its profitability by 2011.

News of the agreement comes following speculation that PEI was in talks to sell the magazine. The company slashed its rate base 38 percent to 1.5 million effective in 2010 and combined its January and February issues, but admitted that further dramatic steps were needed to stem its losses.   

Playboy is on track to lose about $8 million in 2009, according to the parent company. Under the agreement, it expects to reduce that loss to $5 million in 2010 and become profitable in late 2011.

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