The Artist and Debt, Annie Leibovitz Images and Nightmares
The Repo-man knocks at the door. “Let me in Let me in”! Not by the hair of my Chinnie Chin Chin is Annie’s reply to Art Capital Group. Today the old wolf at the door nightmare torments one of the most gifted artists in America; Photographer Annie Leibovitz who made a deal with a Company of Wolves with the hope of saving her home, her life’s work and her family.
Annie owes Art Capital Group 24 Million Dollars. To secure her 24 million dollar loan she used her real estate, her art collection and the rights to her artwork as collateral. Why she needed, such a large loan is at the heart of a story in the New York Times written by Allen Salkin about Leibovitz’s struggle with Taxes, Real Estate and Debt Management.
For Annie Leibovitz, a Fuzzy Financial Picture NYTIMES July31, 2009 by Allen Salkin.
Annie’s struggle with debt was compounded by the recent deaths in the past five years of her long time partner Susan Sontag, the writer and her Father and Mother. She also has children and recently added two giving birth to twins. At the same time of all of her personal issues, Leibovitz was managing the renovation of her three Greenwich Village properties, which alone was a source of enormous personal stress, controversy and a major financial impact on her personal fortune.
Who is Annie Leibovitz and how did she become a character in a nightmarish bedtime story? In the beginning of her career Annie was I think simply in the right place at the right time combined with a genius talent to capture life on film. She became the staff Photographer for Rolling Stone Magazine when Rolling Stone was just another hopeful grassroots publication. Annie’s images dominated the cover with inside images of Rock and Rolls Greatest Artists. Her images sold copy and many believe were the catapult for the success for Rolling Stone Magazine. Along with fame came fortune and opportunity. Annie signed with Vanity Fair for a seven-figure salary estimated to be 3 million dollars a year with millions more in expenses for outrageously fantastic photo shoots where she made many of her trademark images. Annie was living the Artists dream of endless opportunity and budget to create her work.
Along the way, though she partied too much and developed a pattern of financial mismanagement. Just because a person is, an artistic genius does not make them good with money or debt management. Leibovitz’s ability to make money through her work offset her inability to manage money and debt until now.
Now is another moment of being in the right place but at the wrong time. Before Annie went to the Art Capital Group, who by the way is best described as a high end Pawnshop for the art worlds, Top Artist’s, Collector’s and Dealer’s, she arranged to sell limited portfolios of her work through the auction house Phillips de Pury. The auction that might have bailed her out fell short of the mark when the Art Bubble Burst in October of 2008. That left Annie in a real bind. She had spent millions on the renovations of her New York property and had to buy out a neighbor because of a lawsuit that added several million dollars to the cost. Then the taxman rang and wanted 1.5 million in taxes. With the economy and the art, market is shambles the wolf offered a deal that Annie gambled would save her.
Learn more about Art Capital Group and how it works.
That Old Master? It’s at the Pawnshop NYTIMES by Allen Salkin
The fact remains that Annie Leibovitz has tremendous earning power and she may yet overcome this nightmare. Her photographic negative archive held by Getty Images is alone estimated to be worth 50 million dollars. That is why Art Capital is so aggressively after the rights to her images.
In fact, Annie still has time to pay them back because full repayment isn’t due until September 8th, 2009. Never mind that fact Art Capital isn’t waiting they have filed several lawsuits against Leibovitz with the most recent this past week to gain access to her assets now. The prior suit was dismissed in part was to stop Annie from working for Getty Images because Art Capital alleged that it would make it more difficult for them to sell her Archive if she was working for Getty. The court ruled against Art Capital Group.
You may be saying to yourself that this story is outrageous and that Leibovitz is unique, but not so. In fact, in a city like New York where a one-bedroom apartment can cost a million plus she is in the small time real-estate market. When you combine renovation costs in New York City with the cost of property it is easy to spend a lot more money that you bargained for. I am sure that when Annie started this adventure the sky seemed to be the limit in the Art Market until the bust of 2008. Combined with the downfall of the economy and tight lending by banks Art Capital Group was in a great position to reap a profit.
Art Capital Group http://www.artcapitalgroup.com/Questions.html
The real enemy in this story is DEBT! Debt is the ball and chain that has hobbled Annie and it will do the same to you as an Artist. In fact, debt will stop you faster than a speeding bullet from achieving success as an artist.
Many artists are finished before they even get started because of debt. Yes, those student loans will sink you faster than the Titanic. You will find that the nice banker isn’t so nice and will tie you up in knots that you will struggle against for 20 years or more.
Even if you have overcome that obstacle and have achieved success, you still maybe burdened with the debt of a mortgage, car loan, credit cards and studio expenses like rent. All of the debt most American have, and when the economy goes south you still got that debt to pay back.
If this isn’t the reason most artists never make it; it has to be a close second and I don’t know what the first is. One thing I know for sure you as an Artist need to manage your money and debt in the most conservative way possible. Never count your chickens before they hatch. Pay as you go as far as you possibly can. And for god sake live in the Mid-West or Western States and stay off the coasts. New York City may be the Art Hub of the world but visit don’t buy.
You also need to understand contracts and the results of signing contracts not only with lenders but with galleries and dealers. If you don’t understand contracts then find someone who does like a lawyer so you can root out any fine print in the deal before you commit. You also need to use contracts when you are hired to do work or sell work so that your rights and the rights of the buyer or employer are clearly spelled out. What are the terms of ownership and who owns the rights to the image, painting or whatever?
The business of art is complex as is the business of money and they are equally the same. While your vision as an artist may be limited to your creative, genius the business of your art is all about the money and wolves are not endangered in the Art World environment.
Debt is food for the wolf and the wolf is always hungry and eager to make a profit or a meal out of your mistakes. Regardless of how outrageous your creative ideas are, keep your financial ideas conservative. The fact is most of us have to have steady paying jobs of some sort to just enjoy the basics in life, homes, cars, children. If you can limit your debt, you will in the long run enjoy more freedom to create your art.
If your lucky enough to make a lot of money spend wisely and pay cash when you can, never incur debt you absolutely do not have too. I know this isn’t what we have been taught but unless you want to be a slave shed the ball and chain of debt or better yet never let them shackle you to begin with. If you have to make a deal to get what you want be sure to very carefully weigh the all of the possible outcomes, good, bad and ugly. Is the risk worth the possible payoff?
I guess the other side of the story is as artists we all like the live on the edge. Risk seems to feed our creative nature. Somehow, we need to keep the benefits of life on the edge and maintain some control over our financial security. When economic times like today come the balance is tipped and we are, always going to have days like these sooner or later. Therefore, we have to plan for the reality while we are creating the impossible dream.
As for Annie, I am confident she will emerge from this crisis and continue to be successful. Art Capital will continue to find wholesome meals and Annie will earn more money in the next year than most of us will earn in our lifetime even after the wolves feed. She will also earn some profound lessons and they will serve her well as will the lesson of her bedtime story. When the Wolf came a Knocking.