Long-suffering stock photo distributor SuperStock has filed for bankruptcy, leaving its contributors in the lurch and opening the way for rival Masterfile to acquire the agency’s U.S. assets for $1.5 million.
Under SuperStock's bankruptcy plan, Masterfile – or whoever ultimately acquires SuperStock – will have the option of taking over some, all or none of SuperStock’s contracts with 1,200 photographers. SuperStock owed about $1,162,000 in royalties to photographers at the end of September, according to a court filing.
Photographers may see their contracts turned over to Masterfile, sold to some other company or terminated altogether. If a photographer’s contract is terminated, any royalties paid are likely to be pennies on the dollar. SuperStock's parent company estimates there will be enough money to cover only 4 percent of its debts to unsecured creditors.
Whatever the eventual outcome, it is another headache for stock photographers, who are already dealing with declining prices, changing contracts and industry consolidation.
On December 4, the holding company that owns SuperStock, A21, filed for Chapter 11 bankruptcy protection at the United States Bankruptcy Court in Jacksonville, Florida, where the company is based. The filing covers the U.S. division of SuperStock and the other company A21 owns, a poster and merchandise seller called ArtSelect. Together, the companies employed about 150 people at the end of 2007.
A21 was founded in 1998 and has never had a profitable year. In recent years it has been a revolving door for managers. Since 2006, A21 has lost a founder/CEO, chairman/president, chief financial officer, and chief creative officer.
The bankruptcy plan will see A21 divesting everything it owns.
A21 says Masterfile has agreed to buy SuperStock’s U.S. operations for $1.5 million. The Toronto-based stock agency, an established company with a good reputation among photographers, has put down a $50,000 deposit on the deal, A21 says. But the deal could change if the bankruptcy court finds somebody willing to pay more.
SuperStock’s U.K. division is not in bankruptcy, but A21 says it plans to sell that division to a third party as well. As yet, that party has not been named.
A21 plans to sell ArtSelect to a New Jersey company called Metaverse for $700,000. A21 paid about $10 million for ArtSelect in May 2006.
SuperStock licenses stock images for advertising, editorial and corporate clients. As a mid-tier, general-interest stock distributor, it faces competitors on all sides, including market leader Getty Images, numerous middle-size companies including Masterfile, and a half-dozen microstock agencies with far lower prices.
As its rivals have fine-tuned their brands and tested new pricing schemes, SuperStock has lagged behind. Unlike Getty Images, Corbis and Jupiterimages (which recently announced a deal to be acquired by Getty), SuperStock has no microstock collection. It tried to launch a stand-alone royalty-free site in 2007 called MediaMagnet, but the brand was folded into the SuperStock site after just a few months.
The economic recession and the collapse of the credit markets have not helped the company. A21 cut its staff by 20 last year and defaulted on a $404,000 loan last month.
“After exhausting all possibilities, and considering the current state of credit markets, we determined that the best way to complete a restructuring of our company and to protect the franchise value of our underlying businesses was to pursue a sale of the company’s assets under court supervision in a Chapter 11 proceeding,” A21 CEO
John Ferguson said in a statement.
Ferguson, A21’s current CEO, is a former Getty Images manager who joined A21 in 2006. The most senior employee at SuperStock listed in current filings is director of sales and marketing Kari Pemberton.
A21 chief financial officer
Thomas Costanza resigned in August. Founder
Albert Pleus resigned last year. Former chairman and president Thomas Butta and chief creative officer
Haim Ariav both left in 2006.
In 2005 A21 acquired U.K. stock agency Ingram Publishing, which is operated through SuperStock’s U.K. subsidiary.
A21 says SuperStock contributors who want to check the their royalties owed should contact CFO
LaDuane Clifton at 904-565-0066 or
rlclifton@superstock.com.
Related link
A21 bankruptcy information page
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