<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 6, 1998
Getty Images, Inc.
--------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-28586 98-0177556
- --------------- ---------------- -------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
122 South Michigan Avenue
Suite 900
Chicago, Illinois 60606
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 644-7880
-------------------
None
- ------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
2
ITEM 5. OTHER EVENTS.
On February 6, 1998, Getty Communications plc ("Getty
Communications"), predecessor to Getty Images, Inc. ("Getty Images"), issued a
press release announcing the financial results of Getty Communications for
the year ended December 31, 1997. The press release also announced that
Getty Investments LLC had agreed to invest an additional $28 million in the
company. A copy of the release is attached hereto as Exhibit 99.1.
Also on February 6, 1998, Getty Communications issued a press
release announcing that it had entered into an agreement to acquire all of
the capital stock of Allsport Photographic plc ("Allsport"), a sports
photographic agency. A copy of the press release is attached hereto as
Exhibit 99.1.
On February 10, 1998, Getty Images issued a press release
announcing that Getty Communcations and PhotoDisc, Inc. ("PhotoDisc") had
completed the previously announced merger between the two parties on February
9, 1998. Pursuant to the merger, Getty Communications formed Getty Images as
the new U.S. holding company for Getty Communications and PhotoDisc.
Ordinary shares of Getty Communications (including ordinary shares underlying
Getty Communications American Depositary Shares ("ADSs")) were converted into
approximately 19.2 million shares of Getty Images common stock. In
accordance with the previously announced terms for the transaction, one share
of Getty Images common stock was issued for every two ordinary shares of
Getty Communications (one share of Getty Images common stock for each Getty
Communications ADS). Approximately 8.0 million shares of Getty Images common
stock were also issued to the former PhotoDisc stockholders in the merger.
In addition, approximately $39 million was paid to the former stockholders
and optionholders of PhotoDisc.
As a result of the merger, Getty Images has become the successor to
Getty Communications. Trading in Getty Communications ADSs on the Nasdaq
National Market (NASDAQ: GETTY) has been terminated and trading has commenced
in shares of Getty Images common stock on the Nasdaq National Market (NASDAQ:
GETY). Registration of the Getty Communications ordinary shares and ADS,
under the Securities Exchange Act of 1934, as amended, will be terminated.
The February 10 press release also announced the completion of the
previously announced acquisition of Allsport and the $28 million investment
in Getty Images by Getty Investments. A copy of the press release is
attached hereto as Exhibit 99.2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press Releases dated February 6, 1998
99.2 Press Release dated February 10, 1998
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereto duly authorized.
GETTY IMAGES, INC.
By: /s/ Lawrence Gould
---------------------------------
Name: Lawrence Gould
Dated: February 11, 1998
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
99.1 Press Releases dated February 6, 1998
99.2 Press Release dated February 10, 1998
<PAGE>
Exhibits to 8-K
FOR IMMEDIATE RELEASE February 6, 1998 [LOGO]
GETTY REPORTS RECORD YEAR
ADDITIONAL INVESTMENT BY GETTY INVESTMENTS
Getty Communications plc (NASDAQ: GETTY), one of the leading international
providers of visual content, today announced financial results for the fourth
quarter and year ended December 31, 1997. On a currency neutral basis, sales
for the quarter increased by 17 per cent over the fourth quarter of 1996 and
earnings before interest, taxes, exchange gains/losses, depreciation and
amortization ("EBITDA") increased by 20 per cent. Reported sales and EBITDA
for the quarter were L15.4 million ($25.2 million) and L3.2 million ($5.3
million) respectively, representing increases in sales of 10 per cent, and in
EBITDA of 11 per cent over the fourth quarter. On a currency neutral basis,
sales and EBITDA for 1997 were up 23 per cent to L67.2 million (1996:L54.5
million) and 35 per cent to L13.5 million (1996: L10.0 million) respectively.
Reported sales for the year ended December 31, 1997 increased by 13 per cent
to L61.5 million ($101.0 million)(1996:L54.5 million) and EBITDA by 18 per
cent to L11.8 million ($19.4 million)(1996: L10.0 million).
In a separate announcement released today, Getty advised that it has agreed
to acquire Allsport, the world's leading sports picture agency.
Chairman, Mark Getty said, "1997 and the first weeks of 1998 have been
strategically important for Getty and we have made great steps towards our
declared goal of providing high quality imagery across the widest range of
content categories to the broadest range of customers. We have significantly
broadened our visual content collections with the acquisitions of Gamma
Liaison in news, feature and celebrity material: Energy Film Library in stock
footage; PhotoDisc in royalty free photography and digital image fulfilment;
and, today, Allsport. All these are amongst the leading collections in their
content category and are true to the Getty ideals of high quality imagery and
customer service. In 1998 our focus will be primarily to implement full web
commerce for the imagery contained in our collections to ensure that our
customers can receive these images in a timely manner in whatever format they
choose."
Jonathan Klein, Chief Executive Officer, said, "This has been a record year
for Getty with sales, driven by strong volume growth, up by 23 per cent on a
currency neutral basis. The most striking development in the industry has
been the growth in demand for digital delivery of imagery, particularly in
the United States and United Kingdom. In response to this, we have
accelerated the development of the digital capabilities of the Tony Stone
Images and Hulton Getty businesses: we have launched a tailored, online
search system called Compass; we have prepared key offices for launch of an
on-demand digital delivery service in the first quarter of 1998; and Hulton
Getty has had an online search system for its library of 180,000 digital
images since the middle of the year. The acquisition of PhotoDisc with its
established web commerce business will further enhance our digital
capabilities."
<PAGE>
MERGER WITH PHOTODISC
Getty's pending merger with PhotoDisc, a leader in the development and
marketing of royalty-free digital stock photography products and electronic
delivery of images, has been approved by the shareholders of both companies,
and is now subject to the approval of the High Court in England. Getty
anticipates that this required approval will be granted on February 9 with
completion of the merger and the commencement of trading in shares in Getty
Images, Inc., the new holding company for both Getty Communications and
PhotoDisc, on the Nasdaq National Market expected shortly thereafter.
PhotoDisc's expertise in digital development will, Getty believes, enhance
the company's prospects for web commerce success. PhotoDisc has indicated to
Getty that, on an unaudited basis, sales in the twelve months to December 31,
1997, were approximately $41 million, which represented a 48 per cent
increase over the previous year, and, of this, approximately $7.5 million was
generated by single image sales on the company's award-winning web site
(www.photodisc.com). This figure represents a year over year increase of 430
per cent. In December 1997 sales generated on the web were approximately $1.3
million. Management of PhotoDisc currently estimates that PhotoDisc currently
anticipates that operating income and earnings before interest, taxes and
exchange gains/losses, depreciation and amortization ("EBITDA") for 1997, as
a percentage of sales, will be substantially consistent with the results
previously reported for the nine months ended September 30, 1997.
FURTHER INVESTMENT BY GETTY INVESTMENTS
Getty Investments, the current controlling shareholder of Getty, has today
agreed to subscribe for additional new shares of Getty Images common stock
for a total investment of $28 million. This investment underlines its long-term
commitment to the group. The funds raised will be applied towards financing
the acquisitions of PhotoDisc and Allsport, and planned investments in
digital technology during 1998.
FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997.
Reported sales for the year were L61.5 million ($101.0 million) which
represented an increase of 13 per cent over the prior year. The strength of
the UK pound had a significant impact on the translation of sales from non UK
operations. On a currency neutral basis, sales would have been L67.2 million
representing a 23% increase. This growth has arisen due to an increase in
volume and the effect of acquisitions.
Throughout 1997 Getty has seen a progressive slowing down in the rate of
growth of the analogue business of Tony Stone Images. It is expected that
this trend will continue into 1998 as more customers move towards digital
search, selection and fulfilment of images, particularly in the developed
markets of the United States and the United Kingdom, as can be seen in the
strong growth of PhotoDisc's web commerce business. In recognition of this,
management have made significant investment throughout 1997 in digitisation.
In 1998, Getty expects that Tony Stone Images' Dupe Master Collection will be
available for full web commerce. The merger with PhotoDisc also represents
further significant development in Getty's strategy for digital development.
Gross margin for the year increased from 62.2 per cent of sales for the year
ended December 31, 1996 to 62.8 per cent of sales for 1997, notwithstanding
the inclusion of Gamma Liaison with its lower gross margin. This improvement
was in line with the company's objective of increasing the amount of owned
imagery in the sales mix.
<PAGE>
1997 saw a further reduction in selling, general and administrative expenses
as a percentage of sales for Tony Stone Images/Hulton Getty. This percentage
decreased from 43.3% for 1996 to 42.6% for 1997 as a result of the
reorganisations carried out at the end of 1996 in North America and during the
first quarter of 1997 in the United Kingdom, as well as strong financial and
operating disciplines. Including acquisitions, Group selling, general and
administrative expenses decreased from 43.8 per cent of sales in 1996 to 43.6
per cent in 1997.
On a currency neutral basis, EBITDA for the year increased by 35 per cent.
The reported EBITDA was up to L11.8 million ($19.4 million) from L10.0
million in 1996.
Getty entered into a settlement agreement with Digital Stock Corporation over
the complaint filed in September 1997. This has resulted in a one off,
exceptional cost to Getty including legal expenses.
Net income for the year was L2.5 million ($4.0 million), compared with L1.7
million in 1996 which represents an increase of 40 per cent. Earnings per ADR
were $0.21 for the year and $0.41 excluding the litigation settlement and the
impact of goodwill.
At December 31, 1997 Getty had cash of L17.8 million, long and short term
debt of L10.2 million and shareholders equity of L72.8 million. During the
year, cash generated by operations amounted to L8.0 million. Investment in
fixed assets amounted to L9.4 million, with cash spent on business
acquisitions and debt repayments totalling L13.3 million and L2.0 million,
respectively.
FINANCIAL RESULTS FOR THE QUARTER ENDED DECEMBER 31, 1997
Reported sales increased by 10 per cent to L15.4 million in the fourth
quarter of 1997 compared to L13.9 million in 1996. On a currency neutral
basis, sales grew by 17 per cent in the fourth quarter of 1997 compared to
1996.
Gross margin for the quarter improved from 63.3 per cent of sales to 63.8
per cent of sales. This reflects increased sales from scanned images following
the acquisition of Energy Film Library and a change in the sales mix at Tony
Stone Images and Hulton Getty.
Selling, general and administrative charges increased by 11.4 per cent in the
fourth quarter to L6.6 million due to the acquisitions. At Tony Stone Images
and Hulton Getty selling, general and administrative expenses, as a
percentage of sales, reduced from 42.4 per cent in 1996 to 41.8 per cent in
1997 reflecting management's progress in introducing efficiencies into the
business.
On a currency neutral basis, EBITDA for the fourth quarter increased by 19
per cent. Reported EBITDA increased to L3.2 million ($5.3 million) from L2.9
million in the fourth quarter of 1996.
Net income for the quarter was L171,000 ($281,000) after the Digital Stock
exceptional charge. Excluding this, net income for the quarter was L586,000
($962,000). Earnings per ADR excluding the settlement, was $0.05 and
excluding the impact of goodwill and the exceptional charge, earnings per ADR
would be $0.10.
<PAGE>
1997 HIGHLIGHTS
- - Since formation in 1995, Getty's strategy has been to grow both
organically and by making acquisitions in the fragmented visual content
industry, with the goal of creating the world leading company in the
industry. Getty completed a number of key acquisitions of companies and
image collections in 1997: Energy Film Library, a leading stock footage
business; Gamma-Liaison, with its news and photojournalism imagery; the
Slim Aarons collection with its wealth of imagery depicting the
American way of life; and, exclusive representation of a collection of
300,000 images spanning the 40 year career of the legendary Ernst Haas.
Getty believes that each of the businesses and image collections in the
group are complementary and meet customers' image requirements.
- - During 1997 Getty expanded the company's network of sales offices with
the appointment of agents in South Africa, Poland and Mexico as well as
four new agents in South East Asia and the acquisition of a leading
stock photography agency in Hong Kong. Getty believes that this
expansion is key to providing the best service and products to all of
the group's clients and will be instrumental in ensuring long term
growth.
- - At the end of the year, 180,000 Hulton Getty images have been digitised
to high resolution and the company's online search and retrieval
facility has been active since mid 1997.
- - COMPASS, Getty's tailored search system for Tony Stone Images, has been
tested and launched internally. Getty believes that it is one of the
most in-depth and sophisticated indexing and search engines in the
industry. COMPASS has already had an impact in terms of increased
efficiency in the company's picture research departments as it enables
researchers to search the large image files electronically instead of
manually. For clients it also enhances the quality of the research and
the speed at which imagery can be presented to them for their approval.
COMPASS will form the basis of the Tony Stone Images' web commerce enabled
web site which will be launched in the second half of 1998.
- - In September Getty opened the Hulton Getty Picture Gallery which
specializes in the production of high quality prints from the Hulton
Getty historical archive. Since opening, the Gallery has shown a
variety of themed collections all of which have been very positively
received by the public. The success of the Gallery has exceeded
expectations.
- - In 1997 Getty launched six catalogues compared to two in 1996. The six
catalogues include a flagship and a specialist ('Interpretations')
catalogue from Tony Stone Images, an analogue catalogue from Liaison
('Portraits') and another from Hulton Getty, as well as two CD-ROM
catalogues containing over 10,000 images from Tony Stone Images and
Hulton Getty.
<PAGE>
NOTES TO EDITORS
DESCRIPTION OF GETTY COMMUNICATIONS
Getty Communications (NASDAQ: GETTY) is one of the leading international
providers of visual content to a diverse range of professional users of
images, including advertising and design agencies, magazines,
newspapers, broadcasters, production companies and traditional and new
media publishers. Getty Communications markets rights to images and
footage through its international network of wholly owned offices in
London, Chicago, New York, Los Angeles, Toronto, Munich, Hamburg,
Paris, Amsterdam, Brussels, Copenhagen, Stockholm, Vienna, Barcelona
and Hong Kong and dedicated agents in 15 countries. Getty
Communications' visual content collections are: (i) Tony Stone Images,
one of the world's leading providers of contemporary stock photography;
(ii) Hulton Getty, one of the two largest privately owned collections
of archival photography in the world; (iii) Gamma Liaison, a leading
North American news and reportage agency; and (iv) Energy Film Library,
one of the world's lending stock footage companies.
MERGER WITH PHOTODISC
In September 1997, Getty announced that it had agreed to merge with
PhotoDisc, Inc. This merger has been approved by the shareholders of both
companies and is now subject to the approval of the High Court in England.
Getty anticipates that the required approval will be granted on February 9
with completion of the merger and the commencement of trading in shares in
Getty Images Inc., the new holding company for both Getty Communications and
PhotoDisc, on the Nasdaq National Market expected early next week.
In the twelve months to December 31, 1997, PhotoDisc sales were approximately
$41 million which represented a 48 per cent increase over the previous year.
Approximately $7.5 million was generated by single image sales on its
award-winning web site (www.photodisc.com). This figure represents a year
over year increase of 430 per cent. In December 1997 sales generated on the
web were approximately $1.3 million. Management of PhotoDisc currently
estimates that PhotoDisc currently anticipates that operating income and
earnings before interest, taxes and exchange gains/losses, depreciation and
amortization ("EBITDA") for 1997, as a percentage of sales, will be
substantially consistent with the results previously reported for the nine
months ended September 30, 1997.
DESCRIPTION OF PHOTODISC
PhotoDisc is the leader in the development and marketing of digital stock
photography products and electronic delivery of images. PhotoDisc's products
are offered on a royalty-free basis, a licensing model pioneered by
PhotoDisc, which allows customers to pay a one-time fee to use an image on a
non exclusive basic for almost any purpose. As of December 31, 1997,
PhotoDisc offered more than 125 different CD-ROM products, each of which
included a collection of between 100 and 336 thematically related digital
images. In addition, each image in its 50,000 photographic image library ("the
PhotoDisc Image Collection") is available for immediate licensing and
downloading for a fixed price from the PhotoDisc web site. PhotoDisc market
its products to professional users, such as graphic designers and advertising
agencies: corporate users, such as managerial and sales professionals within
an organization; and small office/home office ("SOHO") users, such as owners
and employees of small businesses. PhotoDisc has coupled the benefits of
advanced technologies with its royalty-free licensing model to make stock
photography more
<PAGE>
accessible to users in emerging markets, such as corporate users and SOHO
users and, potentially, consumers.
ENQUIRIES:
Getty Communications Jonathan Klein (44 171)544 3456
Chief Executive Officer
Lawrence Gould
Chief Financial Officer
Colette Furey
Group Communications Manager
Taylor Rafferty Jim Prout (1 212)889 4350
Hudson Sandler Andrew Hayes (44 171)796 4133
<PAGE>
CONSOLIDATED INCOME STATEMENT HIGHLIGHTS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Getty Communications plc
Three Months Ended
December 97
1996 1997 1997(1)
-------------------------------------
<S> <C> <C> <C>
SALES L13,922 L15,354 $25,227
Cost of sales 5,108 5,554 9,126
--------- --------- ---------
GROSS PROFIT 8,814 9,800 16,101
--------- --------- ---------
Selling, general and administrative 5,911 6,583 10,818
Amortization 374 587 965
Depreciation 941 1,530 2,514
--------- --------- ---------
OPERATING INCOME 1,588 1,100 1,806
Litigation settlement (4) (594) (976)
Net interest received/(expensed) (32) 63 104
Exchange gains/(losses) 30 (14) (24)
--------- --------- ---------
Income before tax 1,586 555 910
Income tax (698) (384) (631)
--------- --------- ---------
Net Income L888 L171 $279
--------- --------- ---------
--------- --------- ---------
Net income per share L0.03 L0.00 $0.01
Net income per ADR (2) L0.05 L0.01 $0.02
EBITDA (3) L2,903 L3,216 $5,283
--------- --------- ---------
--------- --------- ---------
</TABLE>
Notes:
(1) Solely for the convenience of the reader, pound sterling amounts have
been translated into U.S. Dollars at the Noon Buying Rate on December
31, 1997 of $1.6430=L1.00.
(2) Net income per ADR is calculated by adjusting net income per share for
the ratio of two class A Shares per ADR.
(3) EBITDA is defined as earnings before interest, taxes, exchange
gains/(losses), depreciation and amortization.
(4) Relates to the settlement of the Digital Stock litigation.
<PAGE>
CONSOLIDATED INCOME STATEMENT HIGHLIGHTS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Getty Communications plc
Year Ended
December 97
1996 1997 1997(1)
--------- --------- ---------
<S> <C> <C> <C>
SALES L54,475 L61,503 $101,049
Cost of Sales 20,605 22,890 37,608
--------- --------- ---------
GROSS PROFIT 33,870 38,613 63,441
--------- --------- ---------
Selling, general and administrative 23,869 26,808 44,046
Amortization 1,381 1,985 3,260
Depreciation 3,515 5,012 8,235
--------- --------- ---------
OPERATING INCOME 5,105 4,808 7,900
Litigation settlement (4) (594) (976)
Net interest received/(expensed) (1,250) 724 1,190
Exchange gains/(losses) (196) (121) (200)
--------- --------- ---------
Income before tax 3,659 4,817 7,914
Income tax (1,911) (2,363) (3,882)
--------- --------- ---------
Net income L1,748 L2,454 $4,032
--------- --------- ---------
--------- --------- ---------
Net income per share L0.06 L0.06 $0.10
Net income per ADR (2) L0.13 L0.13 $0.21
EBITDA (3) L10,001 L11,805 $19,396
--------- --------- ---------
--------- --------- ---------
</TABLE>
Notes:
(1) Solely for the convenience of the reader, pound sterling amounts have
been translated into U.S. Dollars at the Noon Buying Rate on December 31,
1997 of $1.6430=L1.00.
(2) Net income per ADR is calculated by adjusting net income per share for
the ratio of two class A Shares per ADR.
(3) EBITDA is defined as earnings before interest, taxes, exchange
gains/(losses), depreciation and amortization.
(4) Relates to the settlement of the Digital Stock litigation.
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited, in thousands)
<TABLE>
<CAPTION>
At December 31, At December 31,
1996 1997 1997 (1)
-------------------------------------------------
<S> <C> <C> <C>
Cash and cash equivalents L34,441 L17,793 $29,234
Other current assets 14,243 19,032 31,270
------------ ------------ ------------
Total current assets 48,684 36,825 60,504
Fixed assets, net 19,692 24,256 39,853
Intangible assets 24,187 40,700 66,870
Deferred assets 2,981 2,685 4,411
------------ ------------ ------------
TOTAL ASSETS L95,544 L104,466 $171,638
------------ ------------ ------------
------------ ------------ ------------
Short term borrowings L1,700 L1,276 $2,096
Other current liabilities 17,041 21,512 35,345
------------ ------------ ------------
Total current liabilities 18,741 22,788 37,441
Long term debt 10,466 8,921 14,657
Shareholders' equity 66,337 72,757 119,540
------------ ------------ ------------
L95,544 L104,466 $171,638
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
NOTES:
(1) Solely for the convenience of the reader, pound sterling amounts have
been translated into U.S. Dollars at the Noon Buying Rate on December 31,
1997 of $1.6430 = L1.00
<PAGE>
[LOGO]
FOR IMMEDIATE RELEASE February 6, 1998
GETTY AGREES TO ACQUIRE ALLSPORT,
A LEADING SPORTS PHOTOGRAPHIC AGENCY
Getty Communications plc (NASDAQ: GETTY), one of the leading international
providers of visual content, today announces a further broadening of the
group's portfolio of visual content as a result of its agreement to acquire
Allsport plc. This acquisition is expected to be completed early next week
after completion of the pending merger between Getty and PhotoDisc Inc. The
aggregate purchase consideration for the entire share capital of Allsport
will be L16.5 million in cash and the issuance of 1.1 million new shares of
Getty Images common stock.
In a separate announcement released today, Getty also reported record results
for the year ended December 31, 1997, as well as a proposed further
significant investment in the company by Getty Investments.
Allsport is uniquely positioned as one of the world's highest profile sports
picture agencies. Its photographers supply high quality images to a wide
variety of media, direct from sports events throughout the world. Its
business derives from both the distribution of current photographs and the
licensing of usage rights from its archive of approximately four million
edited original images. Getty plans to grow this business by making
Allsport's imagery additionally available via its own international network
of wholly-owned offices and agents, through penetration of the advertising,
design and corporate markets and by further developing the digital
distribution of Allsport's imagery over the internet.
Chairman Mark Getty said, "Our agreement to acquire Allsport reflects our
determination to provide the best possible imagery to the largest possible
client base. The growth in demand for sports imagery from all parts of our
client base has accentuated the need to add this type of imagery to our
collections. The proposed acquisition of Allsport will provide us with access
to major sports events worldwide on a pre-planned and accredited basis and to
the good relationships that Allsport has established over the years with many
sports governing bodies, sponsors and publishers of books, newspapers and
magazines."
Jonathan Klein, Chief Executive Officer of Getty, said "In Allsport we saw a
tremendous opportunity to acquire both a dynamic sports photography business
with a well-established, efficient system for sourcing and distributing
photography, and a sports archive of quality and depth. Allsport has already
digitised approximately 180,000 of its images which are available on a
24-hour basis and so the acquisition complements our strategies for on-line
search, retrieval and delivery of imagery for all of the businesses in our
group."
Steve Powell, Chairman and Chief Executive Officer of Allsport, said "We have
built Allsport into a lending sports photographic agency. Our markets are
global and are growing rapidly. Although we are proud of our strong position
and brand within these markets, we recognise the need to develop Allsport
further as the demand for visual content expands and media technology becomes
increasingly sophisticated. We chose Getty as our partner because we felt
that its strong market positions, high quality content, digital expertise,
and future market strategy make it, for us, the most attractive group in our
industry."
<PAGE>
Getty's agreement with Allsport comes at the same time as the proposed
closing of Getty's merger with PhotoDisc, a leading royalty free digital
stock provider, and believed to be the largest provider of imagery over the
internet. This transaction has been approved by the shareholders of both
companies and is now subject to the approval of the High Court in England
which Getty expects on February 9 with closing and dealings in Getty Images
shares expected during next week.
Getty's high quality visual content portfolio also includes Tony Stone
Images, one of the world's leaders in contemporary stock photography; Hulton
Getty, one of the two largest privately owned archival photograph collections
in the world; Gamma Liaison, a leading North American news and
photojournalism business; and Energy Film Library, one of the world's leading
stock footage companies. Getty's strategy has been to pursue acquisitions of
business that are among the leaders in all sectors of the visual content
industry and to prepare content for digital search, selection and delivery.
Getty envisages a number of benefits as a result of the Allsport acquisition:
- - Getty believes that the growth of sport, as an industry and a leisure
activity, and the resulting need for sporting imagery, is set to
continue. The combination of Allsport's broad penetration of global
sports coverage, and Getty's visual content expertise, make the enlarged
group well positioned to benefit from developments in the sports imagery
market.
- - The professionalism and talent of Allsport's award-winning photographers
are evidenced by the fact that Allsport is the official photographer to a
number of sports' governing bodies including the International Olympic
Committee, the International Amateur Athletics Federation and the PGA
European Tour. These and other relationships provide Allsport with
reliable regular access to major sports events. The high quality of
Allsport's imagery is directly in line with Getty's commitment to
providing the highest quality imagery across all areas of the visual
content business.
- - In addition to product excellence, Allsport has been very successful in
building relationships with sportsmen and women, publications and
sponsors. The position of Allsport in the sports photography industry,
together with the quality of the imagery, has led to contracts with the
most important sports sponsors, including Nike, Reebok, AT&T, IBM and
McDonalds, for advertising and promotional use. The agency's strategy of
building partnership-style relationships is welcomed by Getty and is in
line with Getty's own strategies.
- - Getty already owns brands which are amongst the leaders in the sectors of
contemporary, archival, news and reportage, and the company believes that
the addition of Allsport is a further important step in implementing its
strategy of completeness in terms of content provision to its customers,
in particular the editorial segment of the market which consists of book,
magazine, CD ROM and web publishers as well as newspapers.
- - Allsport's clients include a wide variety of the world's media, in
particular national and local newspapers, magazines and book publishers,
television companies and commercial publishing, merchandising and
advertising companies. As a result of the acquisition, Allsport will also
have access to Getty's advertising, design and corporate client bases.
<PAGE>
- - Access to Getty's wholly-owned offices in twelve countries as well as the
company's network of licensees will enhance selling opportunities for
Allsport and further extend that agency's brand worldwide.
- - Allsport has an archive of approximately four million images,
approximately 85 per cent of which are copyright-owned. In addition,
Allsport has exclusive permanent rights of usage over, approximately, a
further 10%. This means that the company has greater flexibility in
maximising sales as there are no restrictions on sales of the images nor
commission payable.
- - Allsport provides a 'live' digital subscription service to over 1,000
newspapers worldwide and already has approximately 180,000 high
resolution digital images online on the company's website
(www.allsport.com), increasing weekly by approximately 5,000. Getty
believes that this capability, along with Getty's own web commerce
expertise, will enhance the online search, retrieval and delivery of
imagery across the enlarged group.
- - Allsport has an experienced management team with a background in the
sports photography industry that goes back over 30 years. The key
management have all renewed their committment to continue to develop the
business in partnership with Getty after the acquisition. Allsport also
employs award-winning photographers who are backed up by skilled support
teams.
<PAGE>
NOTES TO EDITORS
DESCRIPTION OF GETTY COMMUNICATIONS
Getty Communications (NASDAQ: GETTY) is one of the of leading international
providers of visual content to a diverse range of professional users of
images, including advertising and design agencies, magazines, newspapers,
broadcasters, production companies and traditional and new media publishers.
Getty Communications markets rights to images and footage through its
international network of wholly owned offices in London, Chicago, New York,
Los Angeles, Toronto, Munich, Hamburg, Paris, Amsterdam, Brussels,
Copenhagen, Stockholm, Vienna, Barcelona and Hong Kong and dedicated agents
in 15 countries. Getty Communications' visual content collections are:
(i)Tony Stone Images, one of the world's leading providers of contemporary
stock photography; (ii)Hulton Getty, one of the two largest privately owned
collections of archival photography in the world; (iii) Gamma Liaison, a
leading North American news and reportage agency; and (iv) Energy Film
Library, one of the world's leading stock footage companies.
DESCRIPTION OF ALLSPORT
Allsport is amongst the world's leading sports photographic agencies with
offices in London and Los Angeles, as well as agents providing representation
in approximately 30 countries. Allsport's customer base includes major
newspaper groups worldwide, publishers, sports governing bodies and sponsors.
For the year ended November 30, 1997, Allsport's revenues were approximately
L10 million.
MERGER WITH PHOTODISC
In September 1997, Getty announced that it had agreed to merge with
PhotoDisc, Inc. This merger has been approved by the shareholders of both
companies and is now subject to the approval of the High Court of England.
Getty anticipates that the required approval will be granted on February 9
with completion of the merger and the commencement of trading in shares in
Getty Images, Inc., the new holding company for both Getty Communications and
PhotoDisc, on the Nasdaq National Market expected early next week.
In the twelve months to December 31 1997, PhotoDisc sales were approximately
$41.0 million, representing a 48 per cent increase over the previous year and
of this, approximately $7.5 million was generated by single image sales on
its award-winning web site (www.photodisc.com). This figure represents a year
over year increase of 430 per cent. In December 1997 sales generated on the
web were approximately $1.3 million. Management of PhotoDisc currently
estimates that PhotoDisc currently anticipates that operating income and
earnings before interest, taxes and exchange gains/losses, depreciation and
amortization ("EBITDA") for 1997, as a percentage of sales, will be
substantially consistent with the results previously reported for the nine
months ended September 30, 1997.
<PAGE>
DESCRIPTION OF PHOTODISC
PhotoDisc is the leader in the development and marketing of digital stock
photography products and electronic delivery of images. PhotoDisc's products
are offered on a royalty-free basis, a licensing model pioneered by PhotoDisc,
which allows customers to pay a one-time fee to use an image on a
non-exclusive basis for almost any purpose. As of December 31, 1997,
PhotoDisc offered more than 125 different CD-ROM products, each of which
included a collection of between 100 and 336 thematically related digital
images. In addition, each image in its 50,000 photographic image library
(the "PhotoDisc Image Collection") is available for immediate licensing and
downloading for a fixed price from the PhotoDisc web site. PhotoDisc markets
its products to professional users, such as graphic designers and advertising
agencies; corporate users, such as managerial and sales professionals within
an organization; and small office/home office ("SOHO") users, such as owners
and employees of small businesses. PhotoDisc has coupled the benefits of
advanced technologies with its royalty-free licensing model to make stock
photography more accessible to users in emerging markets, such as corporate
users and SOHO users and, potentially, consumers.
Contact:
Getty Communications
Jonathan Klein, 011-44-171-544-3456
-or-
Taylor Rafferty Associates
Jim Prout, 212-889-4350
<PAGE>
GETTY IMAGES, INC.
FOR IMMEDIATE RELEASE FEBRUARY 10, 1998
GETTY COMMUNICATIONS AND PHOTODISC
COMPLETE MERGER AND FORM
GETTY IMAGES, INC.
Getty Images, Inc. (NASDAQ: GETY - formerly GETTY), one of the leading
international providers of visual content, today announced the completion of
the merger of Getty Communications plc, a leading provider of still and
moving imagery, and PhotoDisc, Inc., a leading provider of royalty-free
imagery on the Internet. This news follows the recently announced acquisition
by Getty Communications of Allsport Photographic plc, a leading sports
photography agency. The deal, valued at approximately $200 million was
concluded on February 9th, 1998.
Co-Chairmen, Mark Getty and Mark Torrance, released a joint statement which
said, "We are delighted to announce the completion of the merger between
Getty Communications and PhotoDisc. Our primary focus in 1998 will be to
combine the PhotoDisc and Getty web teams and accelerate the development of
electronic distribution of our branded product lines. We expect the Tony
Stone web site to be fully commerce enabled during the second half of 1998
and we look forward to providing our clients with additional selection,
purchasing and delivery options, as well as continuing to provide a wide
variety of high quality imagery."
Jonathan Klein, Chief Executive Officer of Getty Images, said "Our customers
demand high quality and broad selection, as well as, increasingly, Internet
access to digital images. The additional content reinforces our commitment to
enhancing our collections of relevant, high quality imagery, and we also
believe increases our customers' confidence that they will find the right
image when sourcing pictures from any of the Getty Images companies."
-MORE-
[LOGOS]
<PAGE>
Getty Images has a broad spectrum of high quality, branded content across
visual content categories. Getty Images' collections include Allsport (sports
photography); Energy Film Library (stock footage); Hulton Getty (archival
photographs); Liaison Agency (news and reportage); PhotoDisc (royalty-free
digital imagery) and Tony Stone Images (contemporary stock photography).
Getty Images combines this breadth of content with an extensive international
distribution network and a range of service and delivery options, from
full-service to self service access and from rights-protected licensing to
royalty-free licensing. As a result, whether the customer is an advertising
executive looking for high resolution images with exclusive use rights, a
broadcasting executive needing footage, a sales representative preparing a
client presentation or anyone with a need for a picture, Getty Images will
have the selection and distribution capabilities to meet that customers'
creative needs.
CONTACTS:
GETTY IMAGES PHOTODISC
Colette Furey Laurie McEachron
Group Communications Manager Communications Director
(011 44) 171 544 3456 (206) 441 9355
# # #
<PAGE>
NOTES TO EDITORS
The merger was completed on February 9, 1998. Pursuant to the merger, Getty
Communications plc formed Getty Images, Inc. as the new U.S. holding company
for Getty Communications and PhotoDisc. Ordinary shares of Getty
Communications (including ordinary shares underlying Getty Communications
American Depositary Shares ("ADS")) were converted into approximately 19.2
million shares of Getty Images common stock. Approximately 8.0 million shares
of Getty Images common stock were issued to the former PhotoDisc stockholders
in the merger, in addition to approximately $39 million paid to the former
stockholders and option holders.
Trading in Getty Communications ADSs on the Nasdaq National Market (NASDAQ:
GETTY) completed at the close of trading on Monday, February 9, 1998, and
trading in shares of Getty Images common stock (NASDAQ: GETY) will commence
on the Nasdaq National Market at the opening of trading on Tuesday, February
10, 1998.
Getty Images also completed on Monday, February 9 the previously announced
acquisition of Allsport Photographic plc and the investment of $28 million by
Getty Investments LLC.
DESCRIPTION OF GETTY IMAGES
Getty Images, Inc. (NASDAQ: GETY) is one of the leading international
providers of visual content to a diverse range of professional users of
images, including advertising and design agencies, magazines, newspapers,
broadcasters, production companies, and traditional and new media publishers.
Getty Images markets rights to images and footage through its international
network of wholly owned offices in London, Seattle, Chicago, New York, Los
Angeles, Toronto, Munich, Hamburg, Paris, Amsterdam, Brussels, Copenhagen,
Stockholm, Tokyo, Sydney, Vienna, Barcelona and Hong Kong and dedicated
agents in 15 countries.
<PAGE>
DESCRIPTION OF PHOTODISC
PhotoDisc is a leader in the development and marketing of digital stock
photography products and the electronic delivery of images. PhotoDisc's
products are offered on a royalty-free basis, which allows customers to pay a
one-time fee to use an image on a non-exclusive basis for almost any purpose.
Each image in its 50,000 photograph image library is available for immediate
licensing and downloading for a fixed price from the PhotoDisc website at
WWW.PHOTODISC.COM. as well as selected images available on thematic CD-ROM
collections. PhotoDisc markets its products to creative professionals, such
as graphic designers and advertising agencies; corporate professionals, such
as managerial and sales executives within an organization; and small
office/home office ("SOHO") customers.
DESCRIPTION OF ALLSPORT
Allsport is among the world's leading sports photographic agencies with
offices in London and Los Angeles, as well as agents providing representation
in approximately 30 countries. Allsport's customer base included major
newspaper groups worldwide, publishers, sports governing bodies and sponsors.
