According to the NY Daily News
Getty Images may sell its WireImage celebrity and entertainment division to
Reuters for something “north of $300 million.” The deal could be announced in the next two weeks. Getty acquired WireImage in 2007 when it purchased MediaVast Image for $207 million.
Getty fueled suspicion among photographers who work for the company when it began asking West Coast based celebrity photographers for the copyrights to their photos taken in the past few years. It is assumed that if the deal goes through Reuters would want to be assured of receiving a strong archive of celebrity images.
Sources tell Selling Stock that it is not just its celebrity and entertainment division that Getty wants to sell to Reuters, but its entire editorial division. The editorial division as a whole has been one of the fastest growing segments of Getty’s business and will probably generate something in the range of $250 million in sales in 2011 up from about $138 million in 2007. If the entire editorial division were to be sold the price would certainly be significantly higher than $300 million.
In the past Getty has been mostly a buyer of content, not a seller. This may be the first time they have considered selling off a portion of the collection they have amassed since 1995. It has also been Getty’s practice to make every effort to buy out the competition rather than strengthening a competitor, in any segment of the market in which they intended to continue to be engaged.
Celebrity and entertainment is the fastest growing segment of the entire editorial photography business. It is hard to imagine that Getty would be willing to sell off the most profitable segment of a line of business in which Getty plans to continue to be engaged. Our sources indicates that the discussions between Getty and Reuters have centered around one or the other taking over the entire editorial photography segment of the other’s business leaving only one strong player rather than two competing players.
The same sources told me that Getty has hopes of spinning off iStockphoto in an IPO in the near future. They believe that such an IPO could raise as much as $2 billion for Hellman and Friedman, the private equity firm that acquired Getty Image for approximately $2.4 billion in early 2008. The iStockphoto division of Getty Images has experienced phenomenal growth since Getty purchased it for $50 million in February 2006. It is expected to have gross revenue in the neighborhood of $350 million for 2011.
But, given what has been
happening at iStockphoto, and in the microstock business as a whole, Getty may not want to wait too long before they launch their IPO. While the business has experienced spectacular growth, as it has matured some of the luster is beginning to wear off and competitors are beginning to eat into its market share. The best time to launch an IPO is probably before fundamental weaknesses become obvious to investors.