From www.wsj.com- Playboy Enterprises Inc. on Monday named Scott Flanders, president and chief executive of Freedom Communications Inc., as its new CEO and a member of its board.

Mr. Flanders, who starts at Playboy July 1 and will be responsible for its strategic direction and business operations, has spent more than three years at the helm of Freedom, which owns TV stations and newspapers, including the Orange County Register in California. He was an independent director of the company earlier in the decade, when Freedom fended off takeover offers by striking deals with a pair of private-equity firms. Those deals allowed Freedom to remain under the Hoiles family’s control.

Rumors have circulated recently that Playboy is about to change hands, after more than a half-century under founder Hugh Hefner. But shares of the Chicago company closed down 11% Monday, at $2.97 apiece, on the New York Stock Exchange, suggesting investors may have interpreted the hire as cold water on talk of a sale.

In an interview, Mr. Flanders, 52 years old, said that while public companies have a responsibility to evaluate any proposals, he will be focused chiefly on building shareholder value by tapping the potential of the iconic bunny-head brand.

“There will be greater long-term value from my focus on those efforts than any other priority I can pursue,” he said.

Mr. Flanders’s likely hire was first reported Monday in The Wall Street Journal.

Also on Monday, Playboy announced the appointment of David Chemerow, senior vice president and chief financial officer of Olympus Media, LLC, as nonexecutive chairman.

Playboy has come under significant pressure in recent years as the proliferation of outlets for pornography has chipped away at the company’s share of the adult-entertainment market. The company has helped offset the decline in the magazine’s fortunes with growth in its entertainment and licensing divisions, but recently all segments have taken a hit, forcing cost-cutting initiatives, including closing the New York office and reducing head count by 25% since last fall.

Last month, after Playboy posted a net loss of $13.7 million for the first quarter, board member Jerome Kern said the company was considering reducing the frequency and circulation of the magazine.

The company on Monday said Mr. Kern will remain on the board.

Mr. Hefner’s daughter, Christie, resigned late last year after two decades as chief executive. Her interim successor, Mr. Kern, subsequently said the company was “willing to listen” to acquisition offers, spurring speculation about potential suitors. After reports early last week that the publisher had approached private-equity firms about a possible sale, Playboy said it isn’t marketing itself to investors but is willing to hear proposals.

Mr. Flanders said that since Playboy’s brand is recognizable around the world, the company’s potential is “well in excess” of its annual revenues of just over a quarter of a billion dollars.

“Playboy’s best days are ahead of it,” he said.