Friday, August 7, 2009

Even Successful Artists Make Big Mistakes

The mind boggles. Annie Liebovitz is in danger of losing the rights to her photographs because of a $24 million loan she took out last year. She's also in danger of losing several homes or buildings she owns, but that's of less concern to me than the issue of her copyrights. Here's the story. And another one here.

I was a professional photographer, and I'll tell you I felt under-capitalized the whole time I worked full-time, but I can't begin to figure out how someone gets to be $24 million in debt as a working photographer. Yes, start up costs are considerable higher than they were when I started out, but Annie started out a few years before I did, when the most expensive Nikon body was less than $600 new and a couple of good cameras and lenses would put you in business. She had the good fortune to hook up with Rolling Stone, and the rest is history.

I started following Annie's career around 1974 when Peterson's published a book about her and Mary Ellen Mark. My own work is based in portraiture for magazines, books, newspapers, corporate communications, and advertising, so I looked to her as a role model. I met her once, many years ago, and I have the greatest respect for her as a working photographer. Greg Heisler once said "if you want to be a famous photographer, photograph famous people." It is absolutely true, as both he and Annie prove and it certainly helped my own career to do celebrity portraits during my stint as a freelancer for the Washington Post. Art directors remembered those portraits for years after they appeared and they stopped people in their tracks when they'd walk into my office where I had a number of them hanging.

I would doubt that she had the same troubles I did getting advances on fees and expenses from her corporate or advertising clients, but maybe that is exactly where the troubles came from. If you are doing these huge production shoots, but you are expected to front the costs for assistants, models, stylists, props, travel, food, etc., those costs can start climbing really quickly and waiting 60-180 days for payment can put a real crimp in your finances. But $24 million? Wow.

Even if the buildings she owned in New York or the outlying areas were money pits, you'd think she'd cut her losses before it got so outrageous. Maybe the buildings or houses are worth far less because of the housing crash. That's possible, but the reported value of the homes doesn't come close to explaining $24 million.

Maybe it's medical related. If you look at the familial issues of the last 9 years in her life, maybe some of that factors in. Having a child after the age of 50 is no cheap thing in a world where Viagra is covered by insurance but women's fertility issues aren't. Plus her twins were carried by a surrogate. Was she supporting her extended family and over-extended herself?

She did have an admitted drug problem back in her younger days, but I was under the impression that was long gone. If it wasn't, $24 million sounds like a whole lot more than a drug dealer would let build up before taking action, so I doubt that's the reason she needed to borrow that much money.

Maybe she ran up legal bills with the fight against Naked Gun 33 1/3 for copyright infringement of her famous pregnant Demi Moore photograph. I think that the court came to the wrong conclusion--the Fair Use analysis was faulty--but she'd still have to pay lawyers (or at least expenses) after losing the case. But again, $24 million?

No matter how famous she is, I can't believe that even her celebrity status would be enough to encourage a reputable lending institution to place that great a value on her archive as collateral for a loan. If it does, I have a wonderful archive of writer's portraits I'd like to leverage to buy a bigger house. I need about $900,000 and the lender will have to honor the model releases. Some of the most famous writers are no longer with us and the images are ones they really liked (and have appeared on book jackets.)

If I were Annie, I'd be heading for a bankruptcy attorney immediately. At least that way she'd probably still have one roof over her head and the tools of her trade. While I'm not a bankruptcy attorney, I know that there's something called a "homesteader's exemption"--or at least there used to be-- which protects those things. The copyrights are more problematic. They certainly are assets and they do figure in whatever loan Annie took out. This is a sophisticated lender who knows the value of the archive, so it's definitely going to be brought into the petition. I'd like to think that there's room for negotiation here. The lender believes the assets are worth twice the value of the loan, so it's quite possible a good lawyer will be able to negotiate a happy solution.

I'd also recommend that Annie contact someone like ASMP's former Executive Director, Dick Weisgrau, to work on fixing her business practices. This is a situation that got way out of hand, but is not atypical of the left-brain, right-brain skills dichotomy of an artistic person versus a business person. The most successful photographers I've known had a really good handle on the business they ran, but some of the most creative didn't.

I wish Annie nothing but the best and I hope she extricates herself from this to move forward and continues to make great pictures. But I hope she does it with better business advisers.