'Can work this out,' archivist says

Learned from mistakes, Rogers asserts after hard year

Photo archive owner John Rogers poses with his collection of baseball jerseys at his his home in North Little Rock in 2011.
Photo archive owner John Rogers poses with his collection of baseball jerseys at his his home in North Little Rock in 2011.

John Rogers' photo archive business hit a wall this year, starting with an FBI raid on his office and home, followed by two multimillion-dollar lawsuits, a pending divorce and major changes at his company.

But his passion to "save America's photographic history" has not lessened, Rogers said in a wide-ranging interview this month.

"Five years ago I embarked on this journey," Rogers said in a telephone conversation as he traveled through California and Arizona seeking more deals for newspapers' photo archives. Five years ago, the New York Daily News was the only newspaper in the country that had its archives fully digitized, Rogers said, meaning photographs converted into a format to be stored on a computer.

Since then, Rogers Photo Archive has digitized the photo collections of about 50 newspapers, including the Kansas City Star; the Chicago Sun-Times; the Detroit News; the Detroit Free Press; The Sporting News; the Seattle Times; the Boston Herald; the Miami Herald; the St. Petersburg Times; and Fairfax Media, which owns newspapers throughout Australia and New Zealand.

Typically, the company digitizes the photos at no charge. In exchange, Rogers Photo Archive receives the prints and negatives, which the company can sell in auctions or on eBay. The company has obtained copyrights for most of the images, though the newspapers retain the right to reprint all their own photos.

An appraisal in February valued about 5.2 million photos from 15 newspaper archives held by the company at almost $130 million. The appraisal was conducted by Penelope Dixon & Associates of New York. None of the photos from the 15 collections had been sold by Rogers Photo Archive before the appraisal, Rogers said.

Rogers estimated the company now has more than 60 million photos and negatives, with a total value of about $300 million.

Rogers' collection of photos is "very unique," said Edward Yee, vice president of Penelope Dixon and Associates.

"It is a cultural history, to a detail that is not accessible to everyone," Yee said. "There are photos in there that have a cultural resonance on a national and global scale. They speak to the generations. And there are some gems in there."

Yee didn't disclose how much the firm billed Rogers, but its website indicates it charges $350 an hour for appraisals. The company spent four or five days in Arkansas examining the collection and then took several weeks in New York to complete the appraisal, Yee said.

Despite the value, Rogers acknowledges that he has built Rogers Photo Archive too fast.

"We took on too much digitization work," Rogers said. "The cost outweighed the [revenue]. We are adjusting to that now. We're creating new revenue streams, and I believe fully we'll pull out of this."

Assets are plentiful, but cash isn't, Rogers said.

"Right now our cash flow is not where you would want it to be," Rogers said. "Just because you have a warehouse full of toilet paper and toothpaste doesn't mean you can compete with Wal-Mart."

In the past, Rogers has said his revenue was about $8 million in 2010 and $10 million in 2011. He declined to discuss revenue figures for years since then.

Rogers Photo Archive has 90 employees, many working in Newport, Rogers said.

Quite a few of those jobs moved out of North Little Rock to Newport because of financial incentives that city gave the company, Rogers said. He also has 80 to 120 contract workers in India who put information about the photos on the files. They are paid a fee for each photo they complete, Rogers said.

Rogers remains the majority stockholder in Rogers Photo Archive, but at the direction of First Arkansas Bank & Trust of Jacksonville, Rogers no longer handles the day-to-day operation of the company. First Arkansas recently sued Rogers, seeking $14.2 million this month for unpaid loans.

Rogers signed a forbearance agreement with First Arkansas in which he agreed to a payment plan and the bank agreed not to foreclose on the loan, Rogers said. The agreement allows the bank to approve deals of $20,000 or more, Rogers said.

"Angelica, my soon-to-be ex-wife, has taken a big role in managing the company," Rogers said. "She's brilliant. She has a degree in international business and is capable of running any business."

Rogers Photo Archive has decided not to aggressively pursue any more archive deals until it can finish the digitization that isn't complete, said Mac Hogan, a partner with Rogers who owns a percentage of the archives.

He was put in the position of day-to-day manager of the company by the bank, Hogan said. Hogan now has turned the operation over to Angelica Rogers, who has filed for divorce, John Rogers said.

Attempts to reach Angelica Rogers for comment were unsuccessful.

The bank also hired a consultant, Michael McAfee, to help the company succeed, Hogan said.

Rogers, however, still is pursuing deals. He has formed a new company, RP LLC -- for Rogers Partners Limited Liability Co. -- to handle those deals, he said.

The new company has no connection with Rogers Photo Archive, Rogers said.

"Keep in mind, we're not out of money," Rogers said. "By me giving up part of the assets [the photos], that brings finances to the table."

The new company will work at a slower pace, archiving one newspaper at a time, he said.

He recently closed a deal to buy about 15 million negatives from a group of newspapers in southern California, Rogers said.

"I'm taking this opportunity because I feel I have a duty to [save the photos]," Rogers said.

In January, dozens of FBI agents searched his office and home and seized memorabilia. Rogers has an extensive collection of sports memorabilia including baseball cards and uniforms. What led to the search, Rogers said, was his participation in an obstruction of justice investigation which concluded in charges against a business partner, Doug Allen of Chicago, and two others. Allen and the two other men pleaded guilty to fraud charges.

"We have a lot of memorabilia and assets still in [the FBI's] possession that we've requested to get back," Rogers said. "Some have been transferred to Chicago and we're hoping to get them back in the near future."

Some of those assets were used as collateral on loans Rogers had with First Arkansas Bank & Trust. When Rogers fell behind on payments on the loans, the bank sued Rogers for $14.2 million.

The FBI has $3.5 million in collateral that Rogers used for a portion of the loans, Rogers said. He also offered to sell a portion of his collection -- about 1 million photos -- for $900,000 to raise money to cover the unpaid loan payments, but First Arkansas refused the offer, Rogers said.

The bank was worried that Rogers would be selling the pictures at an average price of only 90 cents each, Rogers said.

"The bank thought it was a fire-sale price," Hogan said. "A fire-sale price gets money up front, but [the bank] would rather take it over time at a more reasonable price."

Larry Wilson, chairman and chief executive officer of First Arkansas, declined to comment on the lawsuit.

In July, Mary Brace of Chicago, the daughter of the late George Brace, who photographed Chicago Cubs and Chicago White Sox games for 65 years, sued Rogers for failure to make a payment in a $1.35 million purchase of baseball photographs. Rogers Photo Archive paid an initial $500,000 and made the first of 10 scheduled $85,000 annual payments, but didn't make the second payment.

Rogers argues that when he discovered that many of the pictures the company acquired were not copyrighted by Brace -- contrary to to what Rogers had been told -- the payments to Brace were stopped on the advice of his attorney, Rogers said.

"Our main thing was we wanted what we paid for, licensed images," Rogers said. "When we found out she did not have licensed photographs, didn't have the copyrights, it greatly reduced the value of the collection."

Brace had hundreds of thousands of negatives and Rogers Photo Archive "took her at her word," Rogers said. She had signed a document stating she had full copyrights on the collection, Rogers said.

When Rogers got a closer look at the collection, he realized some of the photos had been used on trading cards up to 80 years ago, Rogers said. He gave Brace 24 hours to show she had copyrights, Rogers said.

"Unfortunately, she beat us to the punch [and sued]," Rogers said. Rogers asked recently that Brace's lawsuit be dismissed.

Rogers admits his biggest mistake in the deal was putting his "passion in front of my business sense," and said he has made some serious mistakes, including a plan to try to compete with Getty Images of Seattle, which sells stock images to businesses and consumers.

"I'm learning from my mistakes," Rogers said. "We've done deals now with Getty and Shutterstock [which also sells stock images] giving them access to millions of our images. When you look at that revenue model, in a year or a year and a half, we're going to have some very positive things going on."

Getty Images and Shutterstock are pros, Rogers said.

"We had a dream to be the next Getty Images," Rogers said. "But we didn't do a very good job of that."

The agreements with Getty Images and Shutterstock allow Rogers Photo Archive to earn a percentage of the price of a photo sold by either of the two firms, with the seller also receiving a percentage, Rogers said.

His passion for historic photographs is as strong as it's ever been, Rogers said.

"I've got every faith in the world that that we can work this out," Rogers said.

The saddest chapter of the past five years is not the lawsuits or the FBI raid "but the ending of a marriage," Rogers said.

The split has been amicable, Rogers said.

John and Angelica Rogers have three children, ages 16, 14 and 12. They have put their home in North Little Rock on the market for $2.5 million because of the divorce, Rogers said.

SundayMonday Business on 09/28/2014

Upcoming Events