Getty Images in Dire Straits?
I haven’t been able to verify this independently, but there was a recent article in Bloomberg along the same lines that forebodes very tough times ahead for Getty Images – if not its demise.
If this is true, this is major news for the photo industry and speaks to an increasingly difficult business landscape for the stock business and the photography market in general.
Some will celebrate the demise of a company that has arguably done harm to the photo industry in one way or another, but I personally have many close friends who are some of the very best photographers, editors and managers in the business, so as with any demise, I respectfully suggest there be no celebration…
A catastrophe of cataclysmic proportions for Getty Images (a subsidiary of the Carlyle Group, NASDAQ: CG) is on the horizon. Below are some historical insights, and a break down of the latest Bloomberg reports on Getty. First though, here’s a very simple comparison that will illustrate the state of Getty’s bank accounts and loans:
If you owe so much money to others that you can’t even afford to pay the interest accrued on the loan, and there are no promises of large cash influxes in the near future, no one will loan you the money to pay your monthly interest expense, let alone pay down the principal you owe.
Simpler? ok try this:
Assume you have a $30,000 credit card debt. The interest rate is 17%, so you are required to pay $418.89 a month – just in interest. In this example, using the numbers/income that apply to Getty’s situation, you would only have $52.36 of your income you can use to pay down your debt, thus you have NO WAY of paying off a mounting debt when your monthly increase in debt is 8 times what you have to pay down the debt. I can’t make it more simple than that.
If any banker looked at your situation above, there is no way they would loan you more money, it would be highly irresponsible – even predatory lenders wouldn’t touch the above situation. As such, Getty is doomed.