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Getty Images's CEO Klein to give up position amid price war
[LOS ANGELES] Getty Images's debt prices slid to record lows as the largest seller of stock photography said its chief executive officer, Jonathan Klein, is preparing to give up that title.
As chairman, Mr Klein will remain instrumental in determining strategy, the company said in a statement Friday. Getty also introduced a new consumer website designed for visitors to gettyimages.com who just want to look at photos, rather than use them in another setting.
Mr Klein will remain CEO until a successor is found while co- founder Mark Getty will become deputy chairman, a Getty spokeswoman said in an e-mail. Getty Images is looking outside the company for the new chief executive, she said.
"Mark Getty and I created Getty Images because we believe that imagery has the power to change the world," Mr Klein said in the statement. "That is truer today than ever before." Mr Klein is moving to exit the role less than a month after the Carlyle Group-controlled company told creditors that it burned through a third of its cash in the last three months of 2014 amid a price war that's squeezing profits. Falling bond and loan prices have cost investors nearly US$565 million - or 23 per cent - of what their holdings were worth when Getty borrowed money in October 2012 to help Carlyle Group finance its US$3.3 billion takeover of the company, according to data compiled by Bloomberg.
Getty's US$550 million of 7 per cent unsecured notes due in October 2020 fell 4.5 US cents to 50 US cents on the dollar at 2:23 p.m. in New York, according to Trace, the Financial Industry Regulatory Authority's bond-price reporting system. The yield climbed to 23.6 per cent. The bonds have plunged by more than 19 US cents on the dollar since Getty disclosed its financial performance to investors privately on Feb. 23.
Getty's US$1.9 billion loan due October 2019 fell 0.3 US cent to 83.6 US cents on the dollar at 4 pm in New York, according to prices compiled by Bloomberg.
The company has seen its core business challenged by rivals selling low-priced photos over the Internet. The Seattle-based business's earnings before interest, taxes, depreciation and amortization fell 7 per cent in the fourth quarter, Bloomberg reported last month.
Getty, which doesn't publicly report its results, told holders of its US$2.46 billion of debt that it depleted 34 per cent of its cash in the fourth quarter of 2014, leaving it with US$27 million on Dec 31, two people with knowledge of the company's finances said at the time, asking not to be identified because they weren't authorized to speak about the private report.