Getty’s hostile takeover of 1998

A high gloss of friendship

I came across this book, Do I Really Need a Lawyer? co-authored by my long-time lawyer, Robert Cavallo. It was published in 1979, just two years before I moved to New York.

He was my business advisor and looked over my important contracts. A second-generation Italian from the Bronx, he had an elegant, two-lawyer office on Park Avenue catering to the photo industry. You know, the so-called “cottage industry” that was later taken over by the soon-to-be goliath Getty Images, consisting of photographers, studios, and stock photo agencies.

The receipt was tucked in page 130. This paragraph caught my eye —

photo of a paragraph on page 30 of the book, Do I Really Need a Lawyer?

A “high gloss of friendship” in business relationships explained. Now I understand why it was always so hard to say, when I was offered contracts, that my lawyer will kill me if I don’t have him look at it, or that my lawyer said this or that, feeling like I might offend my new business friend. And why so many photographers just signed on the bottom line without bothering. With Robert Cavallo’s help, I always managed to have fair contracts, and my relationships were friendly.

Robert was a colorful lawyer. He’d say things like, “When I read that, it made the hair on the back of my neck stand up!” and “We got ’em by the short-hairs!” and “They’re blowing sunshine up your skirt!” Robert was like a father figure. In fact, when he was using his power of persuasion on me, he would say that I was like a daughter to him. (Later on, it became, “you’re like a sister to me!”)  I lost my father when I was 30, so I didn’t mind the patronizing at all.

Robert Cavallo, ASMP, and the Copyright Act of 1976

I wasn’t aware of this history, but the book’s co-author, Stuart Kahan, was the Executive Director of the trade association, American Society of Magazine Photographers (ASMP) and Robert Cavallo was their General Counsel in the 1970’s. They ushered in the new era of the Copyright Act of 1976. The new law was greatly advantageous to photographers and was a game-changer for how business would be conducted. I was of the new generation that really benefited. When I moved to New York, I joined the ASMP assistants group to network.  I was well-educated about standard business practices and my rights. Because of all of this, when I found my niche and could actually make a living as a photographer, I was able to have a successful studio in New York for many years.

Among other things, the Copyright Act of 1976 clarified the ownership of residual rights to our photographs. This led to the rise of stock photo agencies – agents that sold commercial and editorial uses to our existing photos for a share of the sale, usually 50%.

“Intellectual property is the oil of the 21st Century” – Mark Getty

Then came J. Paul Getty’s grandson, Mark Getty. He was filthy rich and wanted something to do, so he decided he’d consolidate the photography industry, claiming rights to discovering copyright as if he struck oil.

The “industry” of photographers and stock photographs was just so fragmented, that taking it over was a no-brainer, Mark Getty bragged to the financial press. What a revelation. Photographers are independent, small businesses. The copyrights they own to their photographs are a gold mine! Why should these peons own such valuable intellectual property? Besides, photographers themselves are such pushovers. It will be like taking candy from a baby!

He started with Tony Stone Images in 1995, a stock photo agency I had joined two year prior.  I had become one of their “popular” photographers, having a lot of best-selling photos.

Believe it or not, photographers used to have some power. We created the images that the big media world wanted, and we owned the copyrights. Tony Stone, along with Getty as the new owner, was our agent. We entrusted them with exclusive photographs in exchange for their promise to use their best efforts to license them.  They had a fiduciary duty to us, which is much greater than a straight-up business relationship. It is similar to entrusting your money to a bank.

Tony Stone called me personally the day the sale to Getty was announced, to say that he sold to Getty in order to have the funds to bring us all into the digital future, and that he would still be involved, nothing would change except we’d all be making more money.

Yet in the game of opposites, we were totally helpless to the dangerous storm that was upon us. We should have had a union, but it was against the law, supposedly, for individual photographers to unionize.

There was not much Robert Cavallo, photographers, or ASMP could do. There was nothing the Department of Justice would do, to protect us from the fierce and hostile corporate takeover that was taking place.

The ax comes down in August 1998

Although Getty promised us a digital future, and we were submitting digitized images with the coming Getty stock photo website in mind, just one month before the launch of the website in 1998, Getty hit us with a contract they said we had to sign in order to go forward on the web (in spite of all their promises and the self-renewing contracts we had already.) The new contract stripped away our rights and reduced the percentage of our royalties.

logo on Getty Images letterhead, circa 1998
Getty’s 1998 letterhead, a copyright symbol with the “c” made into a G.

The contract, they said, was approved by the PAG – Photographers Advisory Group – a few Tony Stone photographers that had to sign non-disclosure agreements to serve as Getty’s henchmen, (and they were all men). Talk about “a high gloss of friendship” and the abuse of power.

We received extra-large checks that month. Mine had payments for many licenses from sales 18 months prior, that normally should have been paid to us within three months, like my February 3, 1997 Time Magazine cover, and 12 other sales from the New York sales office alone. Had they starved us of these past-due payments so that in August 1998 they could fatten us up for the kill?

Penny Gentieu photos on cover of Time magazine February 3, 1997

The contract came with a letter promising us a lump sum payment of all payments owed to us. For me, it was a sizable sum, for about 1,000 licenses. Had they been withholding our payments to use against us as a very large contract-signing carrot?

Additionally, the timing of the new contract release and the resulting improvements to our systems have enabled us to arrange a one-off lump sum payment of all monies outstanding prior to July 1, 1998. This payment will include all accrued sales prior to July 1, 1998.
Additionally, the timing of the new contract release and the resulting improvements to our systems have enabled us to arrange a one-off lump sum payment of all monies outstanding prior to July 1, 1998. This payment will include all accrued sales prior to July 1, 1998.

The draconian terms of the contract had the entire Tony Stone community of photographers in the U.S. and England up in arms for weeks and months. In the end, though, I was one of the very few photographers who didn’t sign it. Robert Cavallo told me that if I signed it, I would never forgive myself. It was that bad.

Getty Images refused to pay me for all those outstanding payments for four bloody years, until just the right moment when it was to their best advantage. A triple whammy for Getty – they certainly made the most out of using my money against me.

Withholding royalty payments for a ransom of rights

Getty Images used our rightful, hard-earned money against us in the nastiest, most hostile, most unfair, most personal corporate takeover there could be – the corporate takeover of individual photographers who were the smallest of small businesses. Up until then, Getty Images owed us fiduciary duty. But with the new contract forced on us in order to go forward in the digital future that they had been promising us as they collected our very best photographs, they stripped us naked of our rights and income in one fell swoop. And if we didn’t sign, our photos would be locked in their jail until our three-year self-renewing contracts were up. Kept off of the web, not promoted, just held hostage to make us lie down and die.

Sounds hauntingly familiar — reminiscent of the kidnapping of Mark Getty’s older brother when Mark was a little boy, and grandfather J. Paul Getty’s refusal to pay, causing permanent physical and emotional damage to Mark’s brother over money. It is the subject of the current Academy Award-winning movie, All the Money in the World, and Trust, a new HBO miniseries starring Donald Sutherland.

I have had no further involvement with Getty Images after spending four years in bloody hell just to get my money, but what they have done and what they do still affects me as a copyright owner. It affects us all.

Getty photographs’ downward spiral

Since that 1998 contract, which lowered a photographer’s royalty rates from 50% to 40%, the last I heard, Getty photographers now receive only 20% of a sale.

In addition to the reduction in percentage paid to photographers, the value of photography licenses on Getty’s watch has literally plummeted to being worth next to nothing. Getty Images has managed to greatly squander our intellectual property in just 10 or 15 years, like stock in a stock market crash that will never come back.

The company itself, Getty Images, in those short years has been sold one or two times to other investors. What does Getty Images do now to make money, even if they now make 80%, sometimes 100% of license sales, but not really much since they have permanently cheapened photographs to being worth next to nothing?

Getty now offers photos for online use for free! How can they do that? Getty Images makes money by collecting the user’s website data, at photography’s expense. Having wasted our once-valuable photographs, our profession, and our legacy forever, Getty is now into the data-collecting business.

Corporate greed and money talks

So instead of our profession moving forward and flourishing since the Copyright Act of 1976, the individual artist has been squashed, duped, ripped off and enslaved. Money talks. No justice for the little person. Corporate greed has set us back. I can only be thankful that I had what I had when there was something for me to have.

I wrote a book about it. It’s called, Photography v Son of Getty, inspired by Godzilla movies. Then I shredded the book, arranged and photographed the shreddings, sequenced the photos and printed pages, folded and sewed it all up a coptic-bound book, photographed it, framed some photos, and put it in a show. There is nothing like the endorphins that come with the act of creating to wash away the disgust.

click for The Economist full article online

Mark Getty is the little brother of the grandson of J. Paul Getty who got kidnapped in 1973, described in the book, Painfully Rich, on which the movie, All the Money in the World is based.