July 5th, 2012

Getty IPO On Hold as $4 Billion Private Equity Sale Looms

Earlier this year Getty Images, the largest stock photo agency, retained Goldman Sachs and JPMorgan Chase to evaluate the possibility of a sale or an initial public offering (IPO). According to reports published yesterday by The Wall Street Journal and Reuters, Hellman & Friedman, the private equity firm that owns Getty, is preparing for the second round of a bidding process that would see the stock agency sold to another private equity firm for between $3.5 and $4 billion. (Hellman & Friedman also owns PDN parent company Nielsen.)

Unnamed sources for the Wall Street Journal said the IPO was on hold while private equity firms Kohlberg Kravis Roberts & Co. L.P. and TPG, among others, evaluated their interest in purchasing Getty. Earlier this year KKR invested $150 million in European microstock agency Fotolia.

Hellman & Friedman was rumored to have paid $2.4 billion for a majority stake in Getty Images in 2008, which was publicly traded at the time.

According to the Reuters report, Getty “has seen little growth in earnings before interest, tax, depreciation and amortization (EBITDA) since Hellman bought it but has enjoyed increasing demand for its online imagery products and services.”

Since Getty became private, the agency has made several moves that may have been geared to making the company look more attractive to potential buyers in the lead up to a sale or IPO. The cost-cutting measures have affected its contributing photographers, and the agency has also gone through rounds of layoffs. For instance in November of last year, Getty introduced tough new contracts, cutting back royalties it pays to photographers, telling contributors that rights-managed images that have not sold well will be moved to royalty-free collections while the royalty-free images would be sold as part of subscription packages. The move drew the ire of photographers’ trade associations ASMP and APA, as well as a lengthy string of comments on our blog.

May 31st, 2012

Judge Allows ASMP and Authors Guild Suits Against Google to Proceed

A federal court judge has ruled that the Authors Guild and the American Society of Media Photographers have standing to sue Google on behalf of their members to try to stop the Google Books program. The trade associations have filed two separate lawsuits on the grounds that Google is copying millions of books without permission, in violation of copyright law.

The interim ruling in the case, issued today also cleared the way for Authors Guild members to press their case as a class action lawsuit, which Google had tried to prevent.

The ruling is a procedural decision, not a final ruling on the merits of the case. But it is important because it effectively blocks Google from using a divide-and-conquer strategy to defeat the claims of the plaintiffs.

The full story is now on PDNOnline.