New York Governor Eliot Spitzer says he's sorry for whatever he's done, which from the look of things amounted to romps with pricey prostitutes from an outfit called Emperors Club VIP. For students of business, the Spitzer scandal opens a new window into the workings of an illegal industry.

As it turns out, prostitution has business principles, human-resources challenges and marketing difficulties just like every other line of work.

Take, for example, the transaction that no doubt will be Spitzer's last with Emperors, whose four principals were arrested last week. It was outlined in an affidavit by FBI Special Agent Kenneth Hosey on March 5.

Spitzer, identified by the New York Times as "Client 9" in Hosey's statement, was looking to purchase the services of Emperors' "Kristen" for an evening just before Valentine's Day. Management at Emperors had strict rules about payment — major credit cards, authorised bank cashier's checks and "most foreign currencies" in advance. Add a 20-percent surcharge if you needed Emperors to exchange your currency, according to Emperor's web page, which recently was shut down.

The New York governor tried to book his appointment with only a $400 credit on his Emperors account, but Emperors wasn't buying it. Sticking to its guiding principle (no money, no action) Emperors kept the evening with Kristen on hold until Spitzer's payment arrived on February 13.

Not wanting to encounter payment issues next time around, Spitzer gave Kristen an extra $1,700 as a deposit toward a future transaction. (Her services that night went for $3,100). Emperors, a class outfit, had no tolerance for delinquent payments.

Along with a knack for keeping customers honest, Emperors was a marketing whiz with a talent for knowing its customer. A web page for Emperors Publishing Media Group, which advertised Emperors Club, boasted that 92 percent of Emperors Club VIP International Members were "CEO/Owner/Partners of a large" company. Annual income of its tony clientele ranged from $1 million to $30 million a year, the web page said.

And Emperors wasn't so foolish as to ignore the graying of America: Its web page said that 9.3 percent of members were retired chief executive officers. Think of all the disposable income from those stock options.

With such a monied clientele, it would be smart to push for a little synergy. Seventy-seven percent of Emperors customers owned or collected art, according to its web page, so it was a no-brainer to set up a division to buy and sell original art for clients it described as "millionaires and billionaires."

Even good marketers can't control everything in the marketplace, though, and Emperors did face its challenges. Among conversations the FBI captured from phone calls, e-mail and text messages was one which two principals concluded that there was no point in advertising in Miami because of a tight supply of prostitutes.

In a different conversation, the two bemoaned that the Los Angeles market was sluggish because of too many girls, not enough demand. It was Economics 101, right out of Adam Smith.

To keep customers happy, the company offered lots of options. Customers who paid cash got a discount, much as you might when you fill up the car at certain gas stations.

Two prostitutes for four hours came with a price tag of $3,600 for cash, but $4,140 on the American Express card.

Taking a page from the auto industry, Emperors even offered a "buy or lease" option. A customer who tried a prostitute and liked her could pay a fee to buy her out, thereafter doing business with her directly and avoiding the middleman.

Like every business, the world's oldest profession comes with its human-resources problems. Management of Emperors Club had to retrain prostitutes who didn't take proper imprints on credit cards.

The company also faced all the issues that arise when working moms are on the staff. In one recorded conversation, the Feds learned that Emperors was annoyed that a prostitute left her one-hour session after only 40 minutes, lamenting that she may have darted out to pick up her kids at school.

With names like Raquel ("very clean..very fresh") and Sienna ("an educated, Italian enchantress"), Emperors' employees were often the subject of hyperbole in the firm's advertising. The prostitution ring included "fashion models, pageant winners and exquisite students, graduates and women of successful careers" from finance, art and the media, the online ads said. The "well-educated and accomplished" escorts were just what a "leading gentleman of the world" would expect.

Somehow, they didn't always sound like debutantes, though. Kristen, who entertained Spitzer, told her boss that if Spitzer had asked her to do something unsafe, "I'd be like 'Listen dude, you really want the sex?'"

It was profitable, it was rich with marketing challenges and it was a textbook example of human-resource issues. Can a Harvard Business School case study be in Emperors' future?

(Susan Antilla is a columnist for Bloomberg News. The opinions expressed are her own.)