UPDATE 1-Playboy names newspaper publisher chief executive

* Flanders CEO of publisher of Orange County Register

* Formerly ran Columbia House mail-order music merchant

* Playboy shares fall 10.81 to close at $2.97

By Robert MacMillan

NEW YORK, June 1 (Reuters) - Playboy Enterprises Inc (PLA.N) named the head of newspaper publisher and broadcaster Freedom Communications as its new chief executive, the publisher of the adult entertainment magazine said on Monday.

Scott Flanders, 52, will succeed interim Chief Executive Jerome Kern. Kern, who will stay on the board, took over the Chicago-based company from Christie Hefner, daughter of the magazine's founder Hugh Hefner, who resigned after two decades at the company.

Freedom Communications is the privately held publisher of the Orange County Register and other U.S. newspapers.

Before that, Flanders was chief executive of Columbia House, which sells music and DVDs to people who sign up as members and commit to buy a minimum number of items per year.

He was not immediately available for comment.

Playboy also named David Chemerow, senior vice president and chief financial officer of Olympus Media LLC, as non-executive chairman.

The company's statement included prepackaged comments from Flanders saying that he wants to "create additional value" for shareholders, but the statement did not address recent reports in the New York Post and elsewhere that Playboy would try to find a buyer.

The Post said the company was shopping itself for about $300 million, about three times its market value.

Last week, British entrepreneur Richard Branson denied reports that his Virgin Group was interested in buying Playboy.

The magazine -- with its nude photo spreads of "Playboy Playmates" along with its "Bunny Ears" logo, videos and associated branded merchandise -- has become an American icon since Hugh Hefner began publishing it in 1953.

Despite its well known brand, the company has suffered financially as more people use the Internet to search for erotic images and video. The recession also has accelerated a decline in advertising revenue.

Playboy shares have lost nearly half their value in the past 12 months. On Monday, they fell 10.81 percent to close at $2.97 on the New York Stock Exchange.

(Reporting by Robert MacMillan; Editing by Richard Chang)