Saturday, August 12, 2006

Business Week Online

AUGUST 10, 2006

By Christopher Palmeri

Making Money Off Mel

Don't forget the camera on your next vacation. A chance encounter with a celebrity could pay for the trip—and then some

A chance encounter with Mel Gibson in a Malibu bar will likely turn into a major moneymaker for the three vacationing friends who snapped photos of the apparently pie-eyed movie star. Todd Hausberger, the 29-year-old Phoenix resident who was frolicking at Moonshadows that night with high school buddies Kimberly Lesak, 29, and Julie Smith, 27, has been told that the three stand to make between $80,000 and $120,000 from the sale of the photos.

"The life of the pictures will carry through any court proceeding [involving Gibson]," says Gary Morgan, a co-owner of Splash News & Picture Agency, which has contracted to sell the images. "Unlike some paparazzi photos that have a short shelf life, they'll be used over and over."

The Gibson story also illustrates the cutthroat world of celebrity journalism, where media outlets and broadcast networks compete fiercely for the big stories. Hausberger and his friends were able to sell other photos from their trip—photos that didn't include Gibson—during negotiations for an exclusive television appearance on Entertainment Tonight. "They're not allowed to pay for interviews," Hausberger told "That's how they got around the rules."

CITIZEN PAPARAZZI. Hausberger, an Arizona State University grad who now works in the insurance industry, says he immediately initiated a "little marketing campaign" for the pictures after hearing that Gibson had been arrested for driving under the influence on the morning of July 28. Hausberger began calling celebrity-focused publications such as People, US Weekly, and the National Enquirer.

By that afternoon he had cut a deal to sell the U.S. rights to the Gibson photos on an exclusive, two-week basis to In Touch Weekly, a glossy publication sold in supermarket checkout aisles—for an amount Hausberger identified on his MySpace page as $10,000. The magazine confirms the fee was in the thousands of dollars. The friends have agreed to split the proceeds three ways.

Hausberger admits that he probably sold too soon. The following day broke the news of a secret police report that said Gibson had been belligerent and made anti-Semitic remarks at the time of his arrest (see, 8/8/06, "Mel Gibson's Dollars and Sense"). "We probably could have gotten a lot more after that," Hausberger says.

PERSONAL APPEARANCES. Another aspect of the deal likely limited their initial take. In Touch acquired what the magazine calls "PR rights" to the photos, and the publication quickly began distributing the pictures for free to other media outlets under the condition that they show the In Touch logo when running the photos.

At the same time, Hausberger was also asking broadcast outlets for payment in exchange for TV appearances. As a rule, the networks do not pay for interviews but they have long figured out ways around that by hiring sources as consultants, for example. In this case, Hausberger confirmed that he sold Entertainment Tonight some photos from their trip that did not include Mel Gibson.

Those pictures were not shown when Entertainment Tonight broadcast the first television interview with the three friends on Aug. 1. A spokesperson for Entertainment Tonight says that the show "paid him to license his photos. It's a common practice," and added that photos without Gibson would be aired the weekend of Aug. 12-13.

LICENSE FEES. After negotiating the In Touch and Entertainment Tonight deals himself, Hausberger and his friends hired an attorney, Darran D. Winslow of Lynch, Cox, Gilman && Mahan in Louisville, Ky., where the three grew up and where Lesak and Smith still reside. Their big payday will come after Aug. 14 when In Touch's exclusive period on the Gibson photos ends and Splash begins asking U.S. media outlets to pay for them.

Morgan, who has already begun marketing the photos internationally, said his agency will charge anywhere from $500 to $5,000 for the rights to run the Gibson pics depending on size of the reproduction and whether the buyer wants it for an exclusive period. Given the worldwide interest in the Gibson case, those fees are expected to add up.

Splash has a link on its Web site that offers "cash 4 pix" taken by amateur photographers. As lucrative as the Gibson shots may be, they're not the agency's top seller. That honor belongs to photos of singer Britney Spears' first wedding in Las Vegas taken by a man who happened to be getting married in the same chapel. Splash's Web site says that photo, from 2004, was worth $150,000, an amount Morgan says is outdated. "He's still getting checks," Morgan says of the seller. "I just signed one for him yesterday."