Further information and updates here
September
30, 2008. Since last November, when Photolibrary's controller alleged
the company had failed to acknowledge and pay debts the company knew
were owed Index Stock contributors, Stock Artists Alliance (SAA) has
sought to investigate the issues raised. SAA intervened and we continue
our efforts in the fervent belief all licensing fees due photographers
should be paid in full.
SAA has now contacted 116 of some 1,700
Index Stock contributors. We can now confirm that Photolibrary
scheduled payment of $560,000 in long overdue royalties due these
artists. What troubles us is the vast majority of these payments came
only after outside pressure and intervention - not from the company's
initiative.
These issues first came to light in November 2007,
when many contributors to Photolibrary's Index Stock collection
received "unauthorized" royalty statements from the company's
controller. Photolibrary fired the controller for releasing these
statements, which detailed unpaid royalties of $2.2 million from
2001-2006 sales - money the controller alleged the company had no plan
to pay.
At the same time, SAA received through a confidential
source internal Photolibrary documents. These included a spreadsheet
created from the original Index Stock accounting system, detailing
individual photographer royalties owed, by month, from 2001 through
2006, along with a contributor contact list. These have formed the
basis for SAA's investigations, which raise more doubts about whether
Photolibrary has acted in good faith to contact, report and pay in full
their contributors.
Following pressure from SAA, fellow trade
associations, photographers and the media, there were signs of
progress. SAA heard from all 23 contributors who were part of a formal
grievance SAA submitted to the Picture Archive Council of America
(PACA) on the matter. All contributors confirmed Photolibrary
subsequently contacted them and scheduled payments matching the
controller's statements.
Then, in February, a Photolibrary
contributor memo outlined a payment plan that it stated would take
"most of 2008 to complete." This past summer, SAA followed up with 93
more contributors to assess the company's progress, expecting the
company would certainly have followed through with many or most
photographers.
SAA investigations found poor record of efforts to contact and pay contributors.
Since
July, SAA has randomly contacted 93 Index Stock photographers who,
according to the accounting records we've reviewed, were among 400
contributors owed between $1,000 and $22,000. Together, these 93
contributors represent $435,000 in past royalties owed. SAA found the
following:
1. All 93 contributors were easy to reach, using the company's own contact records.
2. Only six had been paid without contacting the company.
3.
18 had received payments after complaining to the company upon
receiving the "unauthorized" statements and/or after SAA's public
pressure.
4. The remaining 69 had never received payments,
schedules, nor any notice of past royalties due. Those who then
contacted the company at SAA's urging were all immediately scheduled
for payment on a first-come, first-serve basis.
Index Stock records appear accurate, offering no valid excuse for payment delays.
Index Stock records appear accurate, offering no valid excuse for payment delays. When
Photolibrary purchased Index Stock back in 2006, they acquired the
company's debt and the obligation to pay contributors all outstanding
royalties. Photolibrary has blamed payment delays on poorly kept
records they had "inherited" from Index Stock. Yet the payments
received, in virtually every case SAA reviewed, exactly or closely
matched those original Index Stock records - the same records
Photolibrary acquired two years ago, and which their CEO has described
as "useless." When contributors presented copies of their statements
derived from these records, Photolibrary promptly confirmed amounts due
and scheduled payment.
Also to justify payment delays,
Photolibrary has long cited "incomplete" and "inconclusive" findings of
an independent "KPMG audit." Yet in a written statement to SAA, KPMG's
Office of the Ombudsman stated, "KPMG LLP (US) was not engaged to
perform an audit or review of any financial statements of
Photolibrary." It stated their company was only "engaged to perform
certain due diligence procedures."
SAA has now contacted 116 Index Stock contributors. Their cases cast serious doubt on Photolibary's assertions, excuses and good faith. Initially, the company claimed most contributors had already been paid. Later, it blamed payment delays on Index Stock accounting and inaccurate contact information. It's unclear how many more Index photographers remain unpaid.
SAA continues to seek full payments and accountability from Photolibrary.
SAA intervened because we believe photographers must be paid what they are owed. SAA tried our best in an ombudsman role to work constructively and discreetly to help resolve these issues. When that proved ineffective, we investigated the claims ourselves. Now we feel obligated to share what we have learned.
We expect Photolibrary to issue vigorous denials about the issues raised and the facts that support them. We expect company representatives to criticize SAA's investigation. But be assured: We will continue to monitor these issues and press for Photolibrary to keep its contractual obligations and promises to the artists and archives they represent.
Index Stock photographers need to contact Photolibrary.
We urge all photographers with images represented through the Index Stock collection, from 2001 forward, to actively ensure they receive all monies due. Contact Photolibrary representative Dan Russelman at (212) 929-4644 or danr@indexstock.com to request an accounting, confirm your current contact information and provide bank details (payments are now by direct deposit only).
For additional background and information, see www.stockartistsalliance.org/photolibrary-info
Contacts:
Betsy Reid, SAA Executive Director
betsy@stockartistsalliance.org (404) 881-6482
Zave Smith, SAA President
zave@stockartistsalliance.org (215) 236-8998
About SAA
Stock Artists Alliance is the only trade association dedicated to the business interests of professional stock photographers, supporting its global membership with substantial information resources and ongoing advocacy initiatives. www.stockartistsalliance.org
