Another Big Purchase? Why Not!

I suppose we are no longer living in the neo-gilded age of the buy out mavens of the 70’s and 80’s. Jimmy Ling, one of the early masters of the discipline, cobbled a few million bucks here, and a few million bucks there, and created Ling/Temco/Vought, a multi-industry, multi-national, that was the model for any number of crazy buy outs for the next couple of decades. Some were based on the concept of de-construction: taking a company and breaking up all the individual parts of it, selling each, and ending up with way more money than the company would have been worth as a whole. No attention ever seemed to be paid to whether it was good for a)the country [i.e. defense or other sensitive areas], b) the workers who actually worked there [it’s ok… they’ll either keep their jobs or they won’t], and c) the shareholders [this is the one group which might actually profit from the break up]. Normally the folks who make out like bandits are the bandits themselves: the senior management team, the investment bank (why do they always get involved?), and the legal beagles. One of the other manifestations of business run amok is a leveraged buyout, where, with as much faith as cash, a company is cobbled together on the promise that the new entity will be able to create new found wealth by the mere existence of its new state of being [now what are the phrases those management companies always use? Oh yeah, “economy of scale”, “convergence” – that really worked for AOL & Time/Warner , and “repositioning” – when they use that one, you better check the state of your 401K!] My point is that while there have no doubt been some great moves in the business world, there have been some monumentally idiotic ones, which the deca-million paid geniuses didn’t see coming. Gerry Levin, the genius who engineered the aforementioned AOL-Time/Warner deal, and who briefly profited from it (last year he implied in an interview that he was down to his own last coupla’ million) was in charge of the wipe out which cost literally thousands of people the bulk of their profit-sharing and retirement funds. That happens when a stock goes from over 100 to about 15. The point is, any of the senior smart folks at the magazine division could have told you that these great convergence ideas would just not pan out as planned, but no one, it seems can tell the rainmakers anything.

Notice that I have been able to write this far without even mentioning ENRON, but I think you get the point. In the photo business, we complain that budding photographers coming out of Journalism or Photo schools aren’t really taught anything about the business of photography, and that, indeed, you need to STAY in business if you want to BE in business. [John Harrington, a very tall and smart Washington photographer has actually codified much of what we all should have learned in his book Best Business Practices for Photographers and on his blog (photobusinessforum.blogspot.com.] And as much as the geniuses would like to think they “get it” in every business they touch, there are often elements of a particular business which even the well honed MBA crowd sometimes miss. In the photo business, in particular, there are vagaries which have become only more annoying over the decades. The biggest problem is that we live in an era where “everyone” is a photographer. Hi resolution cameras (and cell fones) are now affordable to anyone remotely interested, and while the pictures they may take don’t always rise to the level of a ‘professional,’ whatever that is, there is an assumption that because we DO take pictures, we MUST BE photographers. It’s one of the few professions where the whole world sees itself as your peer. If you have any means at all you can buy a great camera, yes, but using it is another story. Let’s be honest.. .in the days of 35mm film.. you know, 3 years ago.. how many of the 3x5 prints would you trash when you got back your envelope of 36? Probably a lot. Even pros miss a lot of good pictures, it’s just part of the game. But in the end, folks feel like they can relate to you, simply because they take their own pictures. On a human level, this isn’t a bad thing. We can all kvell together of a baby picture, a sunset, or the glint on the Eiffel Tower at dawn. But in business, a difficult situation has only gotten worse. With the proliferation of the use of photography, you would think we photogs would be in better shape. Not really so. For a few really big names, perhaps it is—Salgado, Leibovitz, Gursky. But for the most part, the ubiquitisation of photography has only driven down the perceived value of it. ‘I mean, how can it be THAT difficult to shoot a picture [and corollary- Why Should I Pay For It? ],’ one thinks, ‘when I can do it myself?’

So we are all struggling for peanuts in a world that, having already been invaded by MBA’s and Efficiency Experts (I’m sure they would have found many faults with DaVinci’s way of working, and Picasso? Fuggetaboudit!) sees photographs as just another commodity. We are left to fend for ourselves. When asked how things are going, I often answer, “pretty good for being in such a lousy business.”

When Jonathan Klein, a Wall Streeter partnered with Mark Getty a decade ago to start Getty Images, and began buying out a large number of photo collections to add to the GETTY coffers, his idea was to bring the world of photographic imaging into the world of Wall Street itself. Commodotize everything, and get beyond the “mom and pop” store approach which had served the business well for decades. Sometimes there is a reason to shop at the “mom and pop.” Though, unlike little cafes which suffered a demise at the explosive growth of Starbucks for the last dozen years, the photo mom and pops were pretty much into and aware of their business. “Mom and Pop” never bothered to buy an espresso machine, and serve their customers that higher end beverage which they wanted. If they had, they would still be serving those tuna sandwiches with double decaf skinny lattes, and carmel macciatos. But they didn’t see it coming, and in the end, many fell from the good graces of the caffeinated public.

In the photo business, while Getty did run it like a bit corporation, making exclusive deals with major sports leagues, and trying to create exclusive markets for their work, they didn’t see the huge leaps in revenue which might have made it all worth while. The share price has tumbled over the last couple of a years to a fraction of what it was in ’05. So, I take pleasure in announcing today that my little boutique agency, Contact Press Images (10 office staff, two dozen photographers), will tender an offer for GETTY Images, the photographic behemoth. The asking price is $1.5 billion (with a “b”) and while it may seem like a big step, there is really no reason why it shouldn’t work. And we’re competing with Mitt Romney’s old firm, Bain Capital. No sweat. And get this…..what a match. Convergence: We have been looking to expand our projects in both sports and the stock resale market – a perfect fit. We have been looking for a few good young shooters to add to the illustrious Contact masthead – they have them. We need some expanded capability in converting much of our film and print based work into a digital form – they’d arrive with scanners in hand! What a match! True, I would only take a minor role in the leadership of the company, but I think we would be in good shape, and there is no question that adding Contact’s name to the GETTY brand will only help ratchet it up a few notches. Why they haven’t thrown themselves at our feet already, I’m not sure. But stay tuned: Stranger things have happened in the world of business, and with the current panic which seems to be buffetting the hallowed halls of industry, this might just be what the economy needs to get it back on its feet.