Masterfile Not Paying Royalties

Posted on 11/25/2018 by Jim Pickerell | Printable Version | Comments (0)

According to photographers Masterfile has been unable to make any royalty payments to photographers since January 2018. The company filed for bankruptcy in 2017. Payments to the bankruptcy lawyer are prioritized ahead of payments to photographers. It appears the company has not been generating enough revenue to cover fixed expenses and still pay royalties.

At the end of August President Steve Pigeon wrote to photographers that the company was unable to “make the intended royalty payment at the end of July. It is now planned for mid-September.” Those payments never materialized.

Pigeon continued, “We are very short on funds at the end of a slow summer with further declines in premium licensing revenues and mounting losses. Our copyright enforcement business (PicRights) is doing well and is contributing cash to the consolidated enterprise. But licensing declines outpaced the growth in copyright enforcement income over the past year. That will change in the coming months but we aren’t there yet. We have a 6-month backlog of royalties payable.

“We are aiming to make a general royalty payment to contributors mid-September. Prior to that, our big hurdle is the combination of another payroll, rent payment and a $40,000 quarterly payment to the Trustee in the 2017 Proposal to Creditors which cannot be late.
“Speaking of rent, we are in serious talks with our landlord to lower our rent by relocating from the current 12,000 sq. ft. to 1,500 sq. ft. in the same building. That will take some negotiating since we still have 3 years left on our lease but we have impressed the urgency upon our landlord. We have been a reliable tenant for 10 years, so we are hopeful of a quick compromise.

“We have made further staff reductions in the past month, reducing our headcount to 18 full-time equivalents. This involved laying-off some of our most senior personnel including Geoff Cannon and Barbara Miller who have been reduced to one day per week. This was not forced upon them other than by the financial circumstances facing the company - they were involved in the decision.  It’s hard to believe we had 160 employees ten years ago.
“There will be further operating cost reductions in the coming months after completing some major technology changes. 
“We are struggling to get back to regular full-month royalty payments, starting with the oldest outstanding amounts first. Then, once all the cost cuts have translated into positive cash flow, we will start to double-up royalty payments in order to get current once again.”

Copyright © 2018 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, 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:  


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