Art Capital and Annie Leibovitz Reach Agreement

The "Arts Beat" of The New York Times is reporting today that Annie Leibovitz and Art Capital Group have reached an agreement that will prevent immediate foreclosure of the photographer's $24 million loan. She's gotten back the right to sell her own properties and to sell the rights to her pictures. The loan isn't settled—it will still have to be repaid—but crunch time's been put off to some unspecified future date.

The article isn't particularly in-depth and doesn't say much more than the preceding paragraph, but here's the link.

End news, begin opinionation: I've read a whole lot about this case now, and I must say that the more I read, the more I think Annie Leibovitz simply got caught in a bad place when the housing market crashed like a whole bunch of other people did. If the real estate market hadn't tanked in 2008 and taken big whacking chunks of the banking and financial systems down with it, we probably never would have heard about any of her travails because she wouldn't have been in any trouble. It's quite possible, even likely, that she was proceeding rationally based on the assumptions that prevailed at the time. But she didn't know what was coming any more than anyone else did.

In fact, I've begun to come around to the opinion that most of the breast-beating and cluck-clucking and tut-tutting in the press (okay, this site included, as far as it went) about how irresponsible she is and how she mismanaged her finances, etc., really amounts to nothing more than ordinary everyday sexism and, um, "artism"...okay, oww, sorry about that, but you might know what I mean—the prejudice that all artists are flaky and devoid of common sense. I'm not convinced, any more, that any of that is really warranted. A lot of people got caught in a bad place when the housing market crashed. Maybe Annie's problems were simply on a bigger scale—and a bigger stage.

Mike
(Thanks to Christopher Lause)

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Comments

[Dean]

Mike, if I get your point, you're saying the AL was basically counting on her real estate holdings to produce enough money (or be worth enough in a sale) to pay back most or all of her loan. If that was the case, then she's even a worse businesswoman than anyone thought. Anyone who counts on the real estate market to bail them out of financial problems is crazy. Just ask Donald Trump.

I guess the real estate bubble of a few years ago really got people fired up about the market -- which they thought would never go down. Anyone who really thought that would happen was fooling themselves.

I'm not sure how AL got into the financial mess she did. Maybe she's a lousy businesswoman, maybe Art Capital took advantage of her financial naivete. Maybe she just doesn't pay much attention to financial matters. I don't think it's sexism. Anyone -- ale or female -- could have found themselves in the same position

[Erin]

From what I understand, she's always been terrible with money, right from her early days at Rolling Stone. It speaks volumes to her talent that people would still work with her, even though she has always been notorious for not paying labs, equipment rental places etc. But I have to say I am glad that she is able to claw her way out of this mess, to have to give up the copyright to her photos would have been devastating.

I can't see how this is sexism or artism, I just think people are appalled that someone with that much money can mis-manage it to such a huge degree.

[Al Patterson]

As I've said elsewhere, while I'm not a fan of her work, I'm much less a fan a financial leeches and loan sharks.

When one of us regular folks here has a similar problem, at least we don't get the financial proctological exam from the local newspaper.

I'm glad she has some time to work out her problems. Too bad she couldn't have been given the chance to work them out in private.

[Eolake Stobblehouse]

That's fair.

Although, based on a modest amount of curiosity and research, I was saying since 2005: "Don't buy real estate now, it's gonna crash."
That took no genius, that price roller-coaster has been going on in all living memory.

[Bill Corbett]

Thanks for your kind and insightful comments on this, Mike. I agree with your present feelings about her situation, from what I know. A short time ago, my wife and I lost a lot of what we had, financially speaking. We like to feel as though we tried to manage things well over the years, but when the "crunch" came, quickly realized there were many things we would have done differently if we had only known. But, who could have known?
Her financial problems are very large by our standards, but perhaps no larger to her, than ours are to us. Our hearts go out to her.

[Ken Tanaka]

I strongly suspect that a particular nameless investment bank leaned very heavily on Art Capital to at least re-collateralize the loan terms. This same bank was trying to get the loan principal reduced during the summer. Changing collateral terms seems to make sense, since Art Capital was oddly being demonized in pop press.

Good/bad, right/wrong, bah. This is the simple money business. Ms. Leibovitz was a dope for signing a loan agreement that she admits she neither read nor understood. Art Capital is in a unique distressed finance business niche specializing in making rescue-class loans to artists in exchange for assets. it's a simple, perfectly legit business. Gender has absolutely no factor in this matter.

I hope Ms. Leibovitz is ultimately able to get her proverbial mammary out of the proverbial wringer. But I also don't want to see Art Capital get screwed out of $24 million by being bullied by some little Wall Street pricks or by pop press wailing.

[Dave Karp]

It wasn't the criticism of her financial management that impressed me in all of this.

My attention was captured by the way she treated vendors: Demanding herculean efforts and not paying for the work done. Treating people as if they should be glad they had the chance to be taken advantage of by a giant of photography. That was eye opening and quite disturbing.

[John H]

That's good news. I hope it works our for her.

[Timo]

It's possible, as you think, that Leibovitz is the victim of sexism, crass envy or perhaps the great disdain that artists sometimes attract, as supposedly non-productive members of society.

However, it's also possible she doesn't think The Rules* apply to her. I was working on a project just down the block from her unending Village townhouse renovation, and I heard stories then of flaunting not just the rules of the Building Department or Landmarks Commission but apparently those of physics too (with digging that undermined neighboring foundations.) If this is an apt characterization of her (rather than of, e.g., her help), then set phasers for schadenfreude, full stun.

Having said that, I don't know which Leibowitz to think of here: the artist, or the rule-breaker. Two sides of the same coin anyway.

*I realize reference to The Rules paints me as a member of the embittered petit-bourgeious peanut gallery. Le sigh.

[Doug Stocks]

Thanks Mike for the mea culpa. It did seem to be getting a bit harsh. All successful artists should be supported by others, here in the States especially -getting kinda tabloid. Perhaps this may be a lesson for all of us to stay out of ones personal business, unless invited. I had not considered the sexism/artism aspect. We always hurt the the ones we love.
"Comments are moderated, and will not appear until the author has approved them." -and good to see moderated after approval.

Good work Mike.

[tde]

Wow, sexism and artism?

GIven the details of her spending (one $15M townhouse not enough? buy the one next door, too) it is hard to conclude that she was anything but reckless.

[ben]

I have sympathy for her struggle, but there's one thing I still don't understand: when she found out that she could lose the rights to her life's work, why didn't she pay back the Art Capital loan immediately? She could easily afford it if she sold some of her properties.

Even now, she's extending the loan, instead of simply selling her houses! The fact that she would put her entire artistic output in jeopardy for a little bit of real estate just boggles the mind.

[Mike Johnston]

"Wow, sexism and artism?"

Note that I'm not saying this is the reason for her financial troubles, I'm saying that these things contribute to the treatment she's gotten about it from the press. And of course I could be entirely wrong about that, too.

Mike

[James McDermott]

Mike, your attitude does you credit, and by the same token, I may be a tad harsh on the woman. But the reported examples of her apparently long term profligacy suggests that she has a awful business head and (in a personal sense) the real-world grasp of a Roman emperor.

[I'm Curious Grey Scale]

Isn't it funny how we Americans apply different standards to differnt kinds of rulebreakers?

If Annie Leibovitz were Dick Cheney there'd be no moralistic tut tutting about her. We'd all be arguing that she broke the rules for our own good. We'd be questioning the patriotism of anybody who insisted that there were "rules" at all.

If Annie Leibovitz were the Chairman of Goldman Sachs we'd be arguing that she was "too big to fail". And we'd be shoveling another 20 million dollars into her accounts.

On the other hand, if she were a penniless Mexican immigrant who crossed a border somewhere, we'd be saying they should lock her up and throw away the key. There's no excuse mind you. She should have stayed back on her NAFTA foreclosed farm and starved to death.

I think a lot of the resentment against Annie Leibovitz comes from the fact that anybody can pick up a camera and fancy him/her self an artist. If Annie Leibovitz were an avante guarde theater director or composer and she got into debt putting on plays or concerts, most of us would just scratch our heads and say "hmm. Must be an expensive thing to hire actors and musicians" and barely give it a second thought.

[Christer Almqvist]

Could it be that hubris played a part in this story?

[Doug Howk]

AL was not alone in misjudging the housing bubble. Here's a quote from a Paul Krugman article in the NYT Magazine:
In 2004, Alan Greenspan dismissed talk of a housing bubble: “a national severe price distortion,” he declared, was “most unlikely.” Home-price increases, Ben Bernanke said in 2005, “largely reflect strong economic fundamentals.”

That she borrowed apparent equity from her home to maintain a certain lifestyle is bad judgment in hindsight. Check your 2nd mortgage, credit card debt, etc. before any AL disparagement.

AL I suspect is also the target for those who resent her relationship to Sontag for various reasons including Sontag's views on photography.

[Dave Butler]

I think she is a very overrated photographer - if her subjects were not celebrities no one would have heard of her. As far as no one seeing the economic meltdown coming, sorry, that is just plain not true. Many of us saw it coming years ago.

[Howard]

Perfect example of why artist should remain artist and not real estate speculators / investors.

One of the major reasons why we had a bubble that crashed was because the average person decided that they wanted to get into the R E speculation business to make a quick buck. Yes, there was easy money to be had, but for the most part those that thought that RE speculation was a way to make fast money were dead wrong. Ask any true RE investor and they will tell you that they're looking for a long term return on their investment not a quick return on a flip.

One foreclosures statistic you never hear about is the percentage of investment properties that go bad. You always know how many were sub-prime, or toxic but never investment. Ever wonder why that is??

A L is lucky, and has a lot of friends who probably called in a few chits for her. I bet she gets out of the real estate and gets back to what she does best.

[Simon C]

Sexism? I don't think so. There seems to be plenty of anecdotal evidence that Leibovitz isn't great with money. Someone with her earning power shouldn't really have got herself into this sort of predicament. But she's not exceptional in this respect - apart from perhaps the size of the numbers - as given the economic conditions there are plenty of people of both genders with these sort of problems.

Artism? Possibly. The profligate and ill-disciplined artist is certainly a stereotype that plays well. And as there's some evidence to back it up in Leibovitz's case, then it's not surprising the media will play the angle for all it's worth.

[bobdales]

Now she can buy buy a case of M9's. I'm so relieved.
bd

[Robin Campbell]

Mike, don't mean to sound harsh or overly critical, but methinks you are letting your "liberalism" show through too much.

Poor Annie Leibovitz, she is simply a victim of greedy capitalists and should not be held accountable or responsible for her actions or shoddy business decisions, right?

Why does it seem that "liberals" always expect everyone else to give them a pass, no matter how badly or irresponsible or self-serving they have behaved? Why is it when things turn out bad that it is never ever their own fault, but rather somebody elses? She made her bed, just like we all do, and now she has to sleep in it.

Besides, how many of us would get the breaks (financial or otherwise) she enjoys?

[robert e]

Let's not discount rubbernecking syndrome. I think the press and public are at least in part simply fascinated by a spectacular crash. I certainly find it difficult to avert my gaze, even while understanding that it's none of my business.

Of course, Liebovitz was a target for resentments other than sexism and "artism", just by virtue of being rich, successful, famous, queer, single, etc. I suspect that at least for some, her current troubles are a convenient excuse to vent.

Likewise, to the extent that Art Capital is being "bashed", some of that may reflect the general mood about banks and lenders.

Big-picture-wise, and to sort of paraphrase Mike, I can't resist the impression that she, Art Capital, and the many other parties involved in effect conspired to create their own optimistic bubble, encouraged by an exuberant and unbridled financial environment. I imagine that scenario multiplied a million times, on smaller and larger scales, and I think I understand a little better how the big, global bubble got so out of hand.

[K.Kafka]

"Ms. Leibovitz was a dope for signing a loan agreement that she admits she neither read nor understood. " Maybe Annie should run for Congress !

[I'm Curious Grey Scale]

"I think she is a very overrated photographer - if her subjects were not celebrities no one would have heard of her."

If Ansel Adams had been locked up for all of his life in Essex County New Jersey, who would have heard of him. Why not give the mountains a little credit too?

As anybody who's ever picked up a tabloid in line at the supermarket knows, it's very easy to make beautiful starlets look like like dogs.

I'm also curious as to why people think it's so easy to photograph celebrities. Celebrities have lawyers. They can sue you if you make them look bad. They make you nervous.

Steve McCurry, bah. He only shot photos of poor people in the third world who had little or no say in whether or not some rich white guy stuck a camera in their face and snapped a photo. Did he ever go through the hassle of getting a model release from the Afghan girl?

That being said, I'm not really a big fan of Annie Leibovitz. But if you like Neo-Gilded-Age America, she's the representative photographer of the age. There isn't much space between Leibovitz celebrity portraits and the mediocre paintings of wealthy capitalists and their wives people made back in the 1880s and 1890s.

There's something so fitting about her losing her shirt in real estate. She glorified and prettified capitalist mass cultures lords and ladies. And capitalism brought her down.

[Matthew Miller]

It wasn't crazy real-estate speculation scheme that caused the problem.

The issue is that when Susan Sontag died and left her property to her longtime partner, the law demanded a 50% estate tax. If they had had equal rights as a married couple, this never would have happened. Sure, Leibovitz could have sold some of the property immediately to cover the rest, but it's inherently unfair that she'd even be asked to do so.

[ctein]

Dear Robin,

I don't see how you could read any of that into what Mike posted. Discussing how someone may have ended up in the situation they are in and why it may have been reported the way it was in no way constitutes excusing their misjudgments, nor is there a sentence anywhere in there which portrays them as an "victim."

More importantly, I don't see "town hall" grandstanding having any place in this magazine. It doesn't serve much constructive purpose in the real world; it serves none here.

Put the shoe on the other foot: I could just as easily (and erroneously) write in response to your post, "Why does it seem that 'conservatives' are so willfully and intentionally ignorant of human psychology that they reject any interest or discussion in what motivates people to act the way they do or even make a minimal effort to figure out why they do so? One would think there would be at least some utilitarian value to such knowledge."

So how well do you think that would go over? Would you appreciate reading that remark? Does that unenlightened, reflexive discourse in any way illuminate the subject at hand? Would it achieve anything more than a venting of spleen and provoke rancor?

Perhaps there is a place in the world for culture-warmongering rants (I am dubious) but I'm fairly certain the place is not here.

Please, more light, less flame?

~ pax \ Ctein
[ Please excuse any word-salad. MacSpeech in training! ]
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-- Ctein's Online Gallery http://ctein.com
-- Digital Restorations http://photo-repair.com
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[Mike Johnston]

Matthew,
Actually, although the "gay inheritance tax" was initially widely repeated as the cause for AL's problems, it turns out not to have been an influence at all. Sontag only left her a few personal items of minimal value.

Mike

[ed hawco]

"But she didn't know what was coming any more than anyone else did." As others have indicated, MANY people saw what was coming, long before it came.

Wealth based on real estate and banking in the U.S. at the end of the 20th C. and into the early 2000s was an illusion, no different than wealth based on "dot coms" was a year before the bust. Anyone paying attention knew it was just a matter of time, and that when it fell it would fall hard.

There's been a lot of post-crash analysis of the untenable nature of the sub-prime mortgage model and the practice of non-sub-primes using mortgage refinancing (mortgages upon mortgages) as a cash cow.

But you know what? There was a lot of analysis of those things BEFORE the crash, but few people paid attention because -- just like with the dot com boom -- nobody wanted to hear the nay-sayers and everybody wanted a piece of the sweet, sweet pie.

I live in Canada, where the situation is completely different. I'm not even a mortgage or banking expert, but for the past five years or so, looking at the situation in the U.S. was like watching an insane person sawing off their own limbs while crying out "More arms! I'm growing more arms!" It was like mass hysteria that was glaringly obvious to anyone who was paying attention.

Not that I would expect AL to have been paying attention. But I get jumpy when I see U.S.ers claim that they couldn't see the mortgage crisis and resulting crash coming.

[hugh crawford]

"I think she is a very overrated photographer - if her subjects were not celebrities no one would have heard of her."

And if she hadn't taken some really good pictures of riots when she was a painting student she would not have gotten the opportunity to photograph Nixon's resignation and all the PJ stuff she was doing in the 70s. The Nixon resignation story was a knockout btw, the editors cut Hunter S Thompson's text to make room for more photos, go look at it. And if she hadn't been really good at rock and roll photography maybe Bea Feitler wouldn't have mentored Annie Liebowitz the way she did Dian Arbus and bring her to Vanity fair.

Hmm, maybe all the resentment directed at Annie is because the new york photo world is run by Jewish women? No, don't want to get started on that.

"There isn't much space between Leibovitz celebrity portraits and the mediocre paintings of wealthy capitalists and their wives people made back in the 1880s and 1890s."
Actually some of those "paintings of wealthy capitalists and their wives" are pretty amazing, spend a day looking at some John Singer Sargent portraits in person, not in a book or on screen. I think that her late work is as influenced a lot by Sargent.

I suspect that her childhood bouncing from air force base to another and peripatetic life thereafter might be part of the reluctance to sell the Rhinbeck house, but nothing is selling in in Rhinbeck because no one can get financing. I know other people trying to sell there, and it just isn't happening it that part of the market. I imagine if she tried to lower the price so it would sell for cash it would be less than she owes by a long shot. Likewise it's hard to sell what is essentially a construction site in NYC when it's a buyers market for housing.

And who lifted up the rock that the poster above was under before he or she started ranting about "liberalism" ?

If she can use the good will she has built up over the years get people to help her, more power to her. She started from fairly modest circumstances, so it's not like she hasn't earned that good will.

[Ade]

Meanwhile, Leibovitz is now being sued for copyright breach over the infamous Lavazza calendar shots: "Paolo Pizzetti, a photographer from Siena, reportedly alleges Leibovitz breached his copyright by reproducing photos he took in Venice and Rome for a calendar commissioned by the Lavazza coffee company." http://tinyurl.com/kls8k6

[Nj]

Sexism? Oh please. Since about the early 90s, the group that is routinely unfairly treated in the media (and elsewhere) is men.

[DAVE]

To me her photos are cheesy.- She is no Richard Avedon. - Her money problems are shocking.- How can someone who earns so much get into such a mess.Unlike many people she still has a job.
- She is simply spending too much and should start paying down the loan.