Art Market Monitor

You Say $15m; I Say $50m–Let’s Call the Whole Thing Off

Just when you thought it was safe to venture out without encountering more Art Capital Group/Annie Leibovitz lawsuits, Gawker’s John Cook provides us with interesting additional insight into L’Affaire Leibovitz. Details of a suit between Art Capital and Getty Images are coming out. In the suit, ACG accuses Getty of engaging in negotiations to buy Leibovitz’s catalogue as a ruse to gain inside knowledge that they would use to better value their own deal with the photographer:

Art Capital claims that Getty CEO Jonathan Klein and vice president Matthew Butson masqueraded as potential buyers for Leibovitz’s photo collection, gaining access to information about it including the “number of shots, rolls of film, exposures, and public works” in the archive, the precise terms of Leibovitz’s arrangement with Vanity Fair, and the fact that Leibovitz owned some of her work for Rolling Stone “without restriction.” As part of Art Capital’s negotiations with Getty, the order says, Art Capital proposed that Leibovitz promise to do eight photo shoots for Getty over the next two years. All-in-all, Art Capital—which made Getty sign two confidentiality agreements—valued the package at $50 million.

But in March, Getty offered a “low-ball bid” of $15 million, and Art Capital stopped negotiations and turned to another buyer. Eight days later, Getty announced its own deal with Leibovitz, which Art Capital says “used verbatim the two-year, eight-shoot collaboration with Leibovitz that [Art Capital] had proposed.” In other words, Art Capital claims, Getty violated its confidentiality agreement in order to get closer to Leibovitz and figure out what she had, what she was worth, and what she was willing to do. Getty didn’t buy the archive—just the eight shoots—but Art Capital says that Getty’s interference scared off another unidentified potential buyer

This dovetails nicely with other conversations we’ve been having about Leibovitz’s catalogue and the $50m valuation ACG has on it. Just to recap, Art Capital offers loans up to 50% of the value of the fine art collateral it’s been offered. Even if one throws in the real estate that has been valued around $10m, the rights to Leibovitz’s existing work is valued by ACG at $30-$40m.

Leibovitz’s prints have sold at auction for as much as $50,000. Her portraits of Keith Haring, Muhammed Ali and John Lennon and Yoko Ono together are the works that have repeatedly attracted auction bids in the $35-50,000 range. Not really enough to drive a $50m valuation.

Since no physical prints are mentioned in the suit as collateral, ACG seems to be selling the copyrights to Leibovitz’s work as well as her labor. How would a buyer paying $30-50m realize the value from those copyrights? Surely they would not be expecting to make 1,000 prints of Haring, Ali, and Lennon/Ono (that’s a joke, btw), so what’s the commercial value (as opposed to the fine art value) of Leibovitz’s artistic output? The ability to sell postcards or plates with images of Whoopi Goldberg flailing in a bath of milk? (Ok, another joke. But also more than a rhetorical question.)

Anyone care to weigh on how a buyer of Leibovitz’s work would generate a revenue stream? With Bowie bonds the singer’s royalties were securitized. But we’re having trouble identifying a pre-existing cash flow from Leibovitz’s work that would support a $50m valuation.

How Getty Images Screwed Art Capital’s Deal with Annie Leibovitz (Gawker)

Also of Interest:

• Leibovitz & Art Capital Call Truce
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• Leibovitz Needs Better Advisors
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• Leibovitz Sells One Photo in Tokyo
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• Gawker Fingers Si in Leibovitz Loans
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• Leibovitz Can’t Stay Out of Court
  Every penny counts when you’re in debt and a middleman is now suing Annie Leibovitz, according to Bloomberg, for their...