Will Getty Sell Editorial Division?

Posted on 12/11/2014 by Jim Pickerell | Printable Version | Comments (0)

There are widespread rumors that, in an effort to get out from under some of its crushing debt, Getty hopes to sell its Editorial Division early in 2015. It has been reported that Q3 2014 sales for this segment of their business was about $65 million up 21% year-on-year. Editorial represents about 30% of the company’s gross revenue.

For most of the year, in an effort to increase editorial profits, Getty has been getting rid of high paid editorial staff in an effort to cut costs. Assignment days for stringers have also been cut back. In addition Getty chose not to renew some of its contracts with sports leagues for access to venues. Sources indicate that other editorial providers quickly picked up these contracts as soon as they were available.

Getty’s main reason for selling is to get rid of debt. At the end of 2013 the company had about $2.6 billion in outstanding debt including a $1.9 billion term loan, about $550 million of 7% notes due October 2020 and a $150 million line of credit.

It is my understanding that anyone who buys the assets must also take on the same portion of total debt. At 30% of total revenue that might mean that Getty could get rid of $780 million of its debt. It is unclear whether the amount of debt the purchaser must take on is negotiable.

It is expected that anyone who would be interested in this business would already be an established editorial player. That narrows the list of potential buyers quite a bit. Unfortunately, the editorial business has not been very profitable in recent years so it may not be easy to find a buyer.

Nevertheless, there is a rumor that there has been a $100 million offer, but it is not clear if that is acceptable to Getty.

If Getty is able to sell its Editorial division, the company’s remaining gross annual revenue will be in the range of $600 million. If that turns out to be the case it is not inconceivable that in a couple years Shutterstock would be the largest revenue producer in the industry.

Copyright © 2014 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


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