GRACELAND! The most “priceless” real estate in the world
In 1979 Memphis Mayor Wyeth Chandler wanted the city of Memphis to buy Graceland his asking price for the 13 acres real estate was rumored to be US$11 million dollars. Jack Sodens business partner, who handled Lisa Marie Presleys estate for Priscilla Presley, wanted to sell Graceland in 1981. It is a good thing for Lisa Marie Presley that neither got their wish. Sodens business partner, Morgan Maxfield, died an untimely death in a private jet crash Labor Day weekend in 1981, leaving Soden to pursue his vision of opening Graceland to a hungry public.
When Soden took over Graceland and began the formation of Elvis Presley Enterprises, Graceland itself had haemorrhaged money. Colonel Parkers accounting for Vernon Presley had bled the estate dry. The IRS wanted a big chunk of change from the estate, too. Fans wanted to visit Graceland, but security costs and upkeep kept the estate finances in negative territory to the tune of approximately $500,000 a year. Elvis reputation had taken a beating during the Dr. George Nichopoulous trial as well as from the tawdry details of Albert Goldmans book Elvis. Elvis world did not look so good.
Elvis chronicler Bill Burk wrote in June, 1982: “When Graceland swings its doors open Monday, it will be like the founding of a new industry in Memphis” And right he was! Admission was $5.00 a head and thousands of fans (and fanatics) lined up every morning for the new tour. Graceland could handle three thousand per day, and in the first year Elvis Presley Enterprises took in $1.35 million. Cash poured through the doors
The next task Soden had was to corral all of the unlicensed Elvis products on the market and create a new paradigm for the intellectual property (trademark and copyrights) of a celebritys image. Soden and company did not just re-write the book on the celebrity image business; they created the rules of the industry. There is no doubt that they were the force behind the 1984 Tennessee statute regarding Protection of Personal Rights. EPE has used its war chest and lawyers to pursue the rights of Elvis image to the ends of the earth, sometimes at a major negative publicity cost. Seldom has Sodens team lost, and when they have, it has been over inconsequential financial circumstances. Their litigiousness has made hucksters reconsider illegally using the Kings image and has increased the negotiation value of the estate with any legitimate licensees.
Twenty-two years later, Elvis image is restored. EPEs business is intact, running like a well-oiled machine and clearing $12 million a year in profit (a surprising figure, given the very few music rights available to EPE for Elvis biggest hits, an unfortunate Colonel Parker legacy). EPE has just negotiated a sweetheart deal for Lisa Marie Presley. Presleys new benefactor is media mogul Robert Sillerman, who made a massive fortune selling his concert company SFX to Clear Channel for over $4 billion in 2000. Presley will receive $53 million in cash; $25 million in debt assumption; and $22 million in preferred stock of Sillermans new company as well as 500,000 shares in common stock of Sillermans new company. She will still own 15% of Elvis Presley Enterprises, which Sillerman is buying.
What did Presley have to give up for this treasure trove of receivables? She keeps her fathers personal effects and Graceland , which is a great PR move to appease the zealot Elvis fans as well as a physical and emotional tie to her father. She will continue to license the use of ” Graceland and these effects through EPE to Sillermans company. She merely extends the licensing capabilities from EPE to Sillermans company for worldwide promotion and exploitation. In effect she is giving the rights to Elvis image, those that EPE has accrued and has been licensing worldwide, to Sillermans new company for a huge chunk of change plus approximately 15% of Sillermans new company. If Sillerman creates a bigger licensing market for Elvis, she will profit nicely. If not, she will have received almost 8.5 times EPEs net profit per year for those rights. Although all employees of EPE are listed as remaining, were he to retire after this deal, Soden could smile, knowing that he had mastered the art of the Colonel Parker deal, getting far more than ever imaginable from the use of Elvis.