Love Me Legal Tender Time Magazine
August 4, 1997 Vol. 150 No. 5

IF ELVIS REVOLUTIONIZED POP, HIS ESTATE HAS REVOLUTIONIZED CELEBRITY MERCHANDISING. DEAD FOR 20 YEARS, THE KING IS RICHER THAN EVER BY S.C. GYWNNE/MEMPHIS

Let's say, just for argument's sake, that you have been bitten by the Elvis bug. You dye your hair black, don a white rhinestone-studded jumpsuit, curl your upper lip into a passable sneer and venture forth. You start the world's 481st Elvis fan club. You print up personalized Elvis stationery and Elvis T shirts, and start a Web page with photos of Graceland. You throw Elvis-themed parties.

Having your way with the image of a long-dead superstar--it may sound like innocent if somewhat obsessive fun. Legally speaking, however, virtually everything you are doing is a form of copyright infringement. If you keep it up, you are likely to receive, as have thousands before you, something called a cease-and-desist order from a company in Memphis, Tenn., telling you that no matter how many times you may have loyally sat through Viva Las Vegas or Roustabout on the late show, you may not use the name and image of the King without the company's permission. If you do not desist, its minions will visit upon you what might be termed, in the vernacular, a hunka hunka burnin' litigation. And you will lose, because this company is bigger and richer than you are and has been down this road before.

The name of this tenacious corporation, not coincidentally, is Elvis Presley Enterprises. It controls much of the half-billion-dollar global Elvis industry, strictly limiting the world's supply of singing hound-dog dolls, Heartbreak Hotel matchboxes, leather-jacketed teddy bears and pink Cadillac key chains--not to mention the Graceland mansion in Memphis, headwaters of all things Elvis. As that city licks its lips in anticipation of the 75,000 free-spending fans who are expected for the 20th anniversary of the King's death on Aug. 16, Elvis Presley Enterprises reigns supreme as the guardian, keeper and main arbiter of one of America's most prominent cultural myths. It owns one of the most prodigiously popular "brands" on earth, one whose potential to generate revenue may have only just begun to be tapped. The market's elasticity will be tested by the new 330-seat Elvis Presley's Memphis, a theme restaurant and nightclub that opened last week in Memphis (opening act: folksinger Jewel, "the kind of entertainer," an EPE spokesman maintained, "Elvis would have selected were he alive today"). The company hopes that similar clubs, all serving the deep-fried peanut butter and banana sandwiches Elvis adored (as well as more healthful fare), will follow in Orlando, Fla., and New York City--not to mention an entire Elvis mini-resort in Las Vegas.

While it may not seem very difficult to take a foursquare American icon like Elvis and make money off of him, in fact the reverse has been true, and therein lies an illuminating tale. Unlike the story of Elvis' rise from poverty to fame and bloat, which will certainly be told and told again in the coming weeks, the story of what happened after his death is both more unfamiliar and nearly as compelling, at least from a fiduciary point of view. Its unlikely heroine turns out to be none other than Elvis' "child bride," Priscilla Beaulieu Presley, who divorced him in 1973 but took over EPE six years later as trustee for their young daughter Lisa Marie. (EPE was and is the operating arm of the trust that owns the Presley estate.) At the time, the company's principal asset was dead, his shockingly modest estate of $4.5 million was rapidly dwindling, and his popularity was in sharp decline. As the company struggled through the courts to regain control over the name, image and reputation of Elvis, it managed to both redefine American publicity law and revolutionize the marketing of dead celebrities--a not inconsiderable achievement in an era of rampant nostalgia and digital technology. When you see John Wayne in a beer commercial, you can take comfort in the knowledge that it is thanks to EPE's efforts that his heirs have a piece of the action.

The upshot is that in a decade and a half, the woman Elvis met and fell in love with when she was a pretty 14-year-old Army brat (and he the world's most famous private) has taken a company with a market value of $3 million and virtually no income and built an enterprise with yearly revenues of an estimated $75 million and a likely value in excess of $250 million, with a public offering of stock expected soon for its new restaurant properties. The accomplishment is all the more remarkable given that EPE does not have title to most of the recordings that made Elvis Elvis in the first place.

The struggle to salvage the King of Rock 'n' Roll's estate was largely a struggle with the shortcomings of the star himself, whose profligacy is well documented: he was known to keep $1 million in a checking account, a widely reported fact that strained the credibility of the average American in the late 1950s and '60s. He lived lavishly and consumed conspicuously: he owned Rolls-Royces, Ferraris and Stutz Blackhawks; bought a 96-passenger Convair 880 jet for $250,000, then spent $800,000 to have it customized, a project that included gold-plated seat-belt buckles and a queen-size bed. He once took a $16,000 flight to Denver to buy peanut-butter sandwiches.

But as his income from record sales and movies declined in the '70s, his tastes remained expensive. When he died in 1977, his $4.5 million estate would have fetched little more than $3 million in the sort of forced liquidation that the IRS and other creditors would have soon brought about. Unfortunately for his heirs, Elvis had found one particularly short-sighted way to generate quick income in his declining years: in 1973 he sold his entire catalog of recordings--the performances themselves--to RCA for $5 million, an absurdly low price considering that he had sold 1 billion records, more than any other musician in U.S. history. Just how good an investment this was for RCA is strikingly evident today: Elvis remains, in 1997, its most successful act (though this is perhaps as much a comment on the moribund label as on the singer). The sale left EPE with only the royalties from recordings after 1973, which included few hits. The company in recent years has purchased the publishing rights to the music of two-thirds of Elvis' recorded songs, but it never got back the recordings themselves.

Elvis had left his entire estate to Lisa Marie, naming his father Vernon executor until Lisa Marie reached age 25. Vernon, who died in 1979, named Priscilla, who was not an heir, as executor. Vernon believed, no doubt correctly, that with dozens of bankers and lawyers circling the estate, Priscilla was the one insider most likely to keep the interests of her daughter at heart.

"I was shocked when the estate was handed to me, because there was very little money available. We really didn't have anything," said Priscilla during an interview in her modest office on Sunset Boulevard in Los Angeles, where she has run Elvis' estate since 1979, when not making a name for herself as an actress in prime-time soap operas or Naked Gun movies. Then again, perhaps she should not have been so shocked at the estate's relative puniness. "Elvis," she notes with an ex-wife's hard-won lucidity, "did not plan for the future. When he needed money, he would just call [manager] Colonel [Tom] Parker up and say, 'Get me a tour,' and he would spend the money just as fast as he got booked."

The estate was heading toward the red when Priscilla took over. There were the taxes and maintenance on Graceland, salaries for hangers-on and family members, the looming depredations of the IRS. By the early '80s, Priscilla, now both trustee for the Presley estate and president of EPE, had recruited her own money manager, a Kansas City, Mo., businessman named Jack Soden, and the two of them set about figuring out what to do with the estate. The most obvious move, which they explored, would have been to sell off Graceland; one potential buyer, the city of Memphis, did a feasibility study on using Graceland as a tourist attraction and concluded that interest in Elvis had waned and that no one would pay to see the garish, crimson shag-carpeted house of a has-been rock star. Now Priscilla reversed herself, acting, she says, on faith as well as a sentimental attachment to what had been, after all, her nuptial home. While their bankers looked on aghast, she and Soden blew the last of the estate's cash, $560,000, on their own plan to open Graceland to the public--a smart move, as it turned out. EPE made back its full investment in a mere 38 days when Graceland opened its doors for tours in 1982 at $5 a head. Today the mansion has some 750,000 visitors a year and generates revenues in excess of $20 million. Meanwhile, EPE has steadily bought up much of the adjoining land, clearing the way for the sort of Disney-like development (without the rides) Priscilla and Soden have long dreamed of, including convention hotels and a high-tech Elvis museum.

With money flowing in from Graceland, EPE could afford to turn its attention to a thornier problem: controlling Elvis' name and likeness. Earnest collectors of Elvisabilia remember the late '70s and early '80s as a woeful time when shoddy gewgaws--Elvis toenail clippers, vials of "Elvis Presley's Sweat"--were sold with impunity and by companies that paid no licensing fees to EPE. At issue was what is known as "rights of descendability of publicity"--legalese for the ability of a famous person to control the use of his or her name and likeness. Existing law, while not entirely clear, suggested that the heirs of dead celebrities had few, if any, claims. Soden and Presley lobbied hard for legislation, and in 1984 the state of Tennessee passed a bill supporting EPE's interests.

With laws, of course, come litigation--so much of it in this case that EPE quickly became known as the Darth Vader of the merchandising-licensing business. "All we want," says Soden, "is to run our business and not have every little schlocky guy around ripping off Elvis and putting his face on edible underwear and all kinds of things that demean the long-term value of what we've got." One of these cases went all the way to the Sixth Circuit Court of Appeals, which in an oft-cited landmark 1991 case involving a British retailer named Elvisly Yours--yes, they were selling edible Elvis panties--upheld the Tennessee law.

Like the Walt Disney Co. and Lucasfilm Ltd., EPE is indeed a ferocious guardian of its properties and with a wolverine-like tenacity, has managed to back off everyone from the Thomas Cook travel agency (trinkets for Memphis tours) to the state of Mississippi (Elvis-shaped flower arrangements) to fan clubs in Kuala Lumpur to the Federal Government of the U.S. (in a dispute over licensing the popular 1993 Elvis stamp). The Presley cases remain the legal precedent most often cited when other stars' estates attempt to lay cease-and-desist orders on "infringers," making EPE a hero to many a Hollywood Jr.

The company's rousing growth has meant that Lisa Marie Presley has personally made tens of millions. In 1993, when she turned 25, with cash rolling in from Graceland and some 100 well-heeled Elvis licensees, she quite wisely reappointed her mother as trustee of the estate. Besides facilitating her brief marriage to Michael Jackson, Lisa Marie's majority has freed EPE to take greater risks; thus the real estate deals and coming clubs and casinos. Even in Elvisworld, however, there is such a thing as excess. Priscilla turns up her nose at the notion that Elvis clubs might some day reach a McDonald's level of saturation. "Then it's about nothing but money," she says, "and you lose what it is all about." All of which begs the question, How many Elvis bowling shirts are too many? It's a fair bet we'll have a chance to find out.