09/15/2010 08:21 am ET Updated May 25, 2011

Picture Me -- Professional Models Battle In the Freakonomics Tournament

I recently chatted with director Ole Schell after previewing his latest film, Picture Me which opens this week in NY. Ole previously screened Win in China, his documentary about a Chinese game show at the United Nations.

From an economics point of view, there were two aspects of Picture Me and my follow-up discussion that grabbed my attention: (1) young women who succeed in the modeling industry can make vast sums of money by winning the genetics lottery of being tall, skinny and, of course, lucky and (2) according to Ole, a lion's share of the revenue usually falls to the agent, not the model. Concerning point (1), the film portrays Sarah Ziff rising from a new model with dreams of success to soon becoming apathetic about receiving six figure checks. Models openly joke in the film that their profession requires little more skill than standing and walking. Sarah clearly has won the lottery in terms of modeling success while other models in the film are still struggling.

In one of the film's segments a young model explains that she is in debt to all of her agents. Her plane fare, her apartment, her fashion book and the costs for promoting are all arranged by her agent who then passes the costs along to her. While she survives by shifting debt from credit card to credit card, Ole explained that the agent is profiting on every transaction. While at the top of the modeling food chain, Giselle, Tyra Bank and Brooklyn Decker make millions of dollars, the aspiring model often barely pays the rent. In fact, one model in the movie described that with the fresh crop of new aspiring models arriving regularly, the young talent is paid "new girl rates" and soon discarded. The high turnover rate in the industry keeps entry level modeling salaries down much like in other, less glamorous industries.

The situation reminded me a bit of the description in Freakonomics of why drug dealers live with their moms. In the book, we learned of the organizational chart of the gangs where those lowest on the rung earn little more than a typical job at the mall while taking on huge risks such as a 25% chance of being killed. Those at the top of the drug dealer food chain are multi-millionaires who are less exposed to risk. In Freakonomics, the authors argued that this can be viewed as a tournament where winning the tournament results in huge financial gains while the tournaments loser get paid below minimum wage before getting killed.

The tournament analogy certainly holds true in the modeling industry. Those at the lowest rung of the ladder, the "new girls" live lives that are less than glamorous: leveraged with debt, pressured by unscrupulous agents for money, sex and other favors surrounded by a superficial world of, as was described in the film, being a "living doll". The few that succeed make fortunes while the many that don't move on to another career after growing up quickly in the modeling world.

Modeling and drug dealing aren't the only industries where the tournament analogy holds. Sports are an obvious example where the vast majority toil in low pay while a few rise to make enormous fortunes. Some would also argue that Corporate America, where US CEO's now make hundreds of times more than typical workers at the company, is another tournament though the junior executive in the cubicle is making far more than the single A baseball player, the "new girl" model or the guy selling crack on the corner.

An ongoing joke that used to get tossed around our corporate office went something like, "of course I am massively overpaid compared to millions of Americans, but compared to fool in the corner office I am getting completely robbed!"

Note: View a clip from the movie where an aspiring model describes her financial situation and relationship with her agent here.