Searching for advices to manage a portfolio on Getty (thinking to come back or not, every day in microstock is a party) have found this:

https://www.breakingviews.com/considered-view/getty-family-takes-negatives-off-carlyle/

Have you read it? Could you give me your impressions? I really don't know how american companies deal with this issues, but sounds really bad.

Well I don't think the company is going to disappear. In case of crash another one would buy it and keep it working. Anyway, for the content of the article, this year we are going to know it.

OFFTOPIC

Quote

A turnaround is not out of the picture yet � but it requires a strong telephoto lens to see it.

My English are still in development but this looks like a poor simile to close an article just because dealing with a Photo Company.

Perfectly normal journalese, and quite a clever example of such, IMO.

BTW, that's not a simile. (Being pedantic, but trying to help with your English development)
A simile has to use the format 'as ... as...'
As blind as a bat
As innocent as a lamb
As hot as hell
etc

It's popular to make successful companies look like they are in debt, because it can then be used as a tax writeoff.

If indeed this is true (haven't read the article or investigated it) - then I'd say there is some creative accounting going on. Legitimate - but creative - to make it look like a liability when in fact it is profitable.

It's popular to make successful companies look like they are in debt, because it can then be used as a tax writeoff.

If indeed this is true (haven't read the article or investigated it) - then I'd say there is some creative accounting going on. Legitimate - but creative - to make it look like a liability when in fact it is profitable.

The debt is real and is the legacy of the mangling Getty suffered at the hands of two private equity companies, Hellman & Friedman and then Carlyle. Both of those companies couldn't sell Getty at a profit so they paid themselves via adding debt - dividend recapitalization.

The reason both of these private equity firms were very bad news for contributors is that it reduced/eliminated most of the money for growing the business or paying suppliers a fair royalty. Private equity firms don't care about the long term health of a business, only getting their return and getting out.

You can read more about both of these acquisitions in old posts here. It takes big companies a long time to fail unless they're hemorrhaging cash; the problem is, with lots of debt to service, you have very little flexibility.

In February they sought to raise $400m new debt to pay off some old and Moody's rated it lower than Getty's overall rating because of the risks:

https://www.moodys.com/research/Moodys-assigns-Caa2-rating-to-Getty-Images-new-senior-unsecured--PR_394938

"...reflects its high pro forma leverage ...following the planned debt refinancing and recapitalization, low-single digit free cash flow to adjusted debt ratio and still early transformation from legacy products to high volume enterprise subscription and high margin Royalty-Free products. It also considers clients' changing demand for stock imagery, which has shifted to non-exclusive lower-priced products and fostered aggressive competition. There is financial risk associated with the proposed issuance of a rapidly accreting payment-in-kind (PIK) preferred equity instrument that expands to roughly $700 million principal balance three years after closing from $500 million initially, which we believe could lead to volatile leverage metrics if refinanced with debt in the future."

The above followed a rating for $1.55 billion new debt in January.

https://www.moodys.com/research/Moodys-upgrades-Getty-Images-CFR-to-B3-from-Caa1-assigns--PR_391551

There is apparently some optimism - they've removed Getty from a credit watch status - among some of the finance folks based on the recent debt juggling

https://www.ademcetinkaya.com/2019/02/getty-images-inc-upgraded-to-b-from-ccc.html

You'll note in that last article a comment that risks include "...inability to realize expected cost savings, greater price-based competition, or insufficient demand for its subscription offerings" I don't know if those subscriptions are something other than iStock - Thinkstock is still supposedly retiring in "mid 2019" according to its web site.

The article sidebar notes are a bit interesting.

"Hellman & Friedman bought most of Getty Images in a 2008 deal that valued the target�s equity at some $2 billion, with around $400 million in debt."

"The Getty family is paying $250 million for Carlyle�s 51 percent stake, according to the Financial Times, which first reported the deal. Getty Images has more than $2.3 billion of debt." "The deal puts the enterprise value of the company at slightly less than $3 billion..."

So I don't know if the reported "equity" and "value" are the same net numbers. If yes, then the size of the company grew from $2B to almost $3B. If no, then we are dealing with apples and oranges comparisons but implying a bigger value company.

The real significance to me (not being in the banking or investing business) seems to be the increase of debt load from $400M to $2.3B. The helpful private equity "investors" have stripped a lot of value out of the company.

Indeed the second paragraph of the article says "Tuesday�s deal values Getty Images� equity at just a quarter of its worth when Hellman & Friedman bought it in 2008. One major reason for the decline is that before selling it to Carlyle four years later, the buyer saddled it with additional debt, some of which was used to finance dividends." So the actual equity value of the company has nearly crashed via the investors, who seemingly grabbed the money and ran.

So is this a severe detriment to Getty Images? Is this just a bankers ruse to move around money to the benefit of the top players and game playing organizations? Are the gamers * just enough blood out of GI to not kill it - but to use the blood for some other corporate games?

I think these financial moves are all a big shell game among the GI people who are bankers (not photographers) at heart. I doubt they want to kill, or let die, their cash cow GI. But the situation certainly puts the squeeze on finances and certainly on payments and percentages to us photo suppliers as they milk this cow.

Does someone with better accounting knowledge and Getty history have a better thought?

BTW, that's not a simile. (Being pedantic, but trying to help with your English development)
A simile has to use the format 'as ... as...'
As blind as a bat
As innocent as a lamb
As hot as hell
etc

Thank you! I thought it was a cliche.
Also got it now on similars!

This is bizarre:

Quote

One major reason for the decline is that before selling it to Carlyle four years later, the buyer saddled it with additional debt, some of which was used to finance dividends.

But by no means unusual when value is created for investors while trashing businesses.

i hope they go bankrupt...lot of possibility of sales out there without those bigh sucker company...the problem is that if they go bankrupt imagine 00 millions file and more coming toward ss and fotolia...o better they stay there selling for penny to contributor...the problem is already there lot of exclusive seeing there rperd falling down and thinking to leave their exclusive status.

Quote from: jonbull on March 21, 2019, 11:23

i hope they go bankrupt...lot of possibility of sales out there without those bigh sucker company...the problem is that if they go bankrupt imagine 00 millions file and more coming toward ss and fotolia...o better they stay there selling for penny to contributor...the problem is already there lot of exclusive seeing there rperd falling down and thinking to leave their exclusive status.

They wont go bankrupt but they might sellout to someone like Visual China Group... like Corbis did.   

 iStock has already been sold as part of a deal with Visual China Group. All istock uploads and older files are mirrored to veer and vcg.

Quote from: trek on March 21, 2019, 16:37

Quote from: jonbull on March 21, 2019, 11:23

i hope they go bankrupt...lot of possibility of sales out there without those bigh sucker company...the problem is that if they go bankrupt imagine 00 millions file and more coming toward ss and fotolia...o better they stay there selling for penny to contributor...the problem is already there lot of exclusive seeing there rperd falling down and thinking to leave their exclusive status.

They wont go bankrupt but they might sellout to someone like Visual China Group... like Corbis did.   

 iStock has already been sold as part of a deal with Visual China Group. All istock uploads and older files are mirrored to veer and vcg.

Have you got a link for that?
The official word was that "VCG is a trusted business partner for Getty Images in China" meaning to get Getty images into the Chinese market.
Which of course led to low prices, mass copying and even them giving images away for free, though after many complaints that was said to have been stopped.
Whatever, it's not the same as being "sold".

Quote from: ShadySue on March 22, 2019, 18:31

Quote from: drd on March 22, 2019, 09:38

Quote from: trek on March 21, 2019, 16:37

Quote from: jonbull on March 21, 2019, 11:23

i hope they go bankrupt...lot of possibility of sales out there without those bigh sucker company...the problem is that if they go bankrupt imagine 00 millions file and more coming toward ss and fotolia...o better they stay there selling for penny to contributor...the problem is already there lot of exclusive seeing there rperd falling down and thinking to leave their exclusive status.

They wont go bankrupt but they might sellout to someone like Visual China Group... like Corbis did.   

 iStock has already been sold as part of a deal with Visual China Group. All istock uploads and older files are mirrored to veer and vcg.

Have you got a link for that?
The official word was that "VCG is a trusted business partner for Getty Images in China" meaning to get Getty images into the Chinese market.
Which of course led to low prices, mass copying and even them giving images away for free, though after many complaints that was said to have been stopped.
Whatever, it's not the same as being "sold".

It s kept very quiet, it is not in the news as the corbis sale, but every sign shows that the same has happened.
http://aspp.com/10253-2/  iStock uploads are making it quicker onto Veer than own page. Veer was part of the Corbis sale.

Its a partnership murky and dodgy as it maybe VCG do not own Istock.

Quote from: drd on March 23, 2019, 02:55

Quote from: ShadySue on March 22, 2019, 18:31

Quote from: drd on March 22, 2019, 09:38

Quote from: trek on March 21, 2019, 16:37

Quote from: jonbull on March 21, 2019, 11:23

i hope they go bankrupt...lot of possibility of sales out there without those bigh sucker company...the problem is that if they go bankrupt imagine 00 millions file and more coming toward ss and fotolia...o better they stay there selling for penny to contributor...the problem is already there lot of exclusive seeing there rperd falling down and thinking to leave their exclusive status.

They wont go bankrupt but they might sellout to someone like Visual China Group... like Corbis did.   

 iStock has already been sold as part of a deal with Visual China Group. All istock uploads and older files are mirrored to veer and vcg.

Have you got a link for that?
The official word was that "VCG is a trusted business partner for Getty Images in China" meaning to get Getty images into the Chinese market.
Which of course led to low prices, mass copying and even them giving images away for free, though after many complaints that was said to have been stopped.
Whatever, it's not the same as being "sold".

It s kept very quiet, it is not in the news as the corbis sale, but every sign shows that the same has happened.
http://aspp.com/10253-2/  iStock uploads are making it quicker onto Veer than own page. Veer was part of the Corbis sale.

Its a partnership murky and dodgy as it maybe VCG do not own Istock.

They don't own Corbis either, they were bought by Unity Glory International Ltd, an affiliate of VCG and owned by some of their directors.  According to Bloomburg Unity Glory International Ltd. operates as a subsidiary of Huaxia Vision (Tianjin) Information Technology Co., Ltd. You did say murky.