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A Little More Action

July 02, 2008 | Other
The July / August edition of BusinessTN magazine features Elvis on the cover with inside an article by Donnie Snow on the possible future of EPE entitled "A Little More Action".

A Little More Action

When celebrated deejay Junkie XL remixed a lesser Elvis Presley hit into a 2002 smash, it returned the long-dead king of rock 'n' roll to the spotlight of mainstream pop music. "A Little Less Conversation" was the first relevant blockbuster splash featuring Presley since before his untimely, unseemly death in 1977. And despite an attempt by bona fide deejay royalty Paul Oakenfold to copy Junkie XL's success with a laudable yet forgettable remix of "Rubberneckin'" the following year, Presley hasn't had a new original hit since. (At press time, a remix of the Elvis classic "Baby Let's Play House" by Italian DJ Spankox was released digitally by Sony BMG Music Entertainment.)

But give the guy a break — he's been dead more than 30 years.

This August marks the 31st anniversary of Presley's passing, and since the JXL remix, the biggest U.S. headlines involving the King included Presley losing his top spot in 2006 on Forbes' morbid richest dead celebrities list to iconic grunge rocker Kurt Cobain (though he regained it the following year) and a flurry of announcements in the financial pages, beginning with the sale of his estate by daughter and sole heir Lisa Marie Presley to billionaire Wall Street wunderkind Robert F X Sillerman in 2004.

Sillerman's acquisition took the cherished "family" business public, and since then he has released several statements relating to the expansion of the Elvis brand—be it in the form of casinos and cruises or hotels and touring shows—and plans for major financial stake in the economic development of the dilapidated Whitehaven neighborhood that surrounds Graceland. With the possible exception of some of the locals who live near Graceland, most believe the brand has been under-commercialized. Lisa Marie Presley said as much when she sold the stagnating company. Sillerman, renowned for building billion-dollar media companies, can mine capital for fuel, but ultimately, it's still the world's first rock star who will power the ship, which begs the question: How long can Elvis float in the famously fickle pool of pop culture?

Fame, Fortune & the Future

Since Elvis Presley Enterprises (EPE) went public, there has been little action, despite a lot of talk (or rather, a lot of announcements), and the corporate culture around Graceland has become much less interactive with the press. (Not unexpectedly, EPE declined to participate in this story.) According to analysts, the long wait should have been anticipated. "One thing I didn't fully appreciate is the time it takes to develop the sort of large-scale projects they have planned," says Mark Argento, senior research analyst at Craig-Hallum Capital Group.

"Developing anything that can drive big revenue and big profits will take a while," he continues, pointing out that the deal Sillerman's company, CKX, is hammering out with French Canadian circus troupe Cirque du Soleil has taken more than a year. "The planning that goes into it—the lead time is significant. They expect very little increase in revenue in 2008 and 2009, with it really kicking in in 2010 and 2011."

The original deal CKX made with Lisa Marie was announced in December 2004. CKX paid $114 million for an 85% interest in Elvis Presley Enterprises. Lisa Marie, who retained the remaining 15%, was paid $50 million in cash plus $26 million in CKX common and preferred stock. CKX also paid $25 million in EPE debt. Sillerman got a 90-year lease on Graceland, rights to Elvis' name, likeness, image and trademark, publishing rights to 650 songs and royalty rights to the few songs Elvis recorded after 1973, as well as to two dozen Presley movies.

Sillerman also paid $6.5 million to Elvis' ex-wife, Priscilla Presley. Fortune reported that CKX didn't have to pay Priscilla anything, but that doing so would make her more agreeable to appearing at grand openings and the like. It seems just that Priscilla would share in the sale, given that she was among the brain trust that turned the floundering, bankrupt estate into a trailblazing company—and Graceland into the most-visited private residence in the world. Barry Ward, former general counsel to the Elvis estate, was also in that management group, which included long-time family accountant Joseph Hanks; Jim Roscoe, trust officer at the National Bank of Commerce in Memphis; and Jack Soden, hired to head EPE. Ward helped appeal a court decision that denied Presley's estate rights to the rock star's name, likeness and image. This paved the way for the creation of the Elvis Law, the groundbreaking precedent that awarded celebrity estates control of intellectual property and trademarks after death.

"From where I sit, the Sillerman acquisition helped immensely, giving the estate the capital to ratchet up to a new level," Ward says, echoing a common refrain about the deal. When announced, Lisa Marie admitted that EPE could only grow so much and that it needed a bigger player to monetize future interest in Elvis.

"That's the amazing thing about the Elvis estate: just how many things they haven't done over the past 30 years," says longtime rock critic Stan Soocher, an entertainment attorney and associate professor of music and entertainment industry studies at the University of Colorado-Denver.

Elvis is one of the few examples in pop music of a star whose fame hasn't flagged, says Soocher, who is currently finishing his book, They Fought the Law: Rock Music Goes to Court, containing coverage of Elvis Presley's estate. (The book will be published in early 2009.)

"The CKX buyout is the most important financial development in the structure of the estate since it was founded," he says.

"Elvis Presley didn't do any international tours," he continues, "and because he's been so popular in England, it seems there is a pent-up demand to exploit." Soocher has a point: Presley's re-mastered No. 1 singles, which EPE released one at a time over the last couple years, tore up the British charts, which leads Soocher to think an international virtual, multimedia tour would likely reap large revenues.

But there's much more to the Elvis brand than music.

"Rockabilly may resurge, but it's never going to be mainstream rock again," Soocher says. "This whole other level [of enterprise] is so important to maintaining the Elvis brand."

He points to the proposed casino as one aspect of enterprise, as well as Elvis-themed destination venues around the world, à la Hard Rock Café.

"Domestically, there's a ton to do" says Argento, "but internationally, the opportunity to take the Elvis brand into a foreign market could dwarf the opportunities in the U.S.

"Put a casino in Macau or Dubai, put a replica of Graceland in Tokyo—the opportunities are huge. It would be epic for the Elvis brand."

The Mansion that Elvis Built

No kidding. Presley's estate has already earned far more than Presley did while he was alive, but Graceland in Tokyo? What would that do to local commercial and tax revenue streams? Most, including EPE and CKX, believe expanding the brand in such a way will increase interest and revenues in Memphis. According to Fortune, Sillerman's stake in the Presley estate exceeds its worth. Yet the company has announced a commitment to developing Graceland and its 120-acre campus. Plans include building one or more hotels and developing the surrounding neighborhood to the tune of hundreds of millions of dollars—not that many checks have been written yet.

"I believe they are still gathering information on the project building specifications," says Har
Source:BusinessTN magazine
Theo wrote on July 02, 2008
"... which leads Soocher to think an international virtual, multimedia tour would likely reap large revenues." Wow an international virtual, multimedia tour, this Soocher guy has some great new ideas. They could use video images of Elvis on big screens and... Wait, didn't they start with those tours 11 years ago and just recently stop?
circleG wrote on July 03, 2008
Graceland in tokyo? are we absolutely sure beyond a doubt that the colonel is dead?
commoneverybody wrote on July 03, 2008
What did Sillerman do for Elvis Legacy so far???? 31 years afters his dead, Elvis´memory is slowly fading.....also Sony is to blame. After ALLC nothing really happened.
Brian Quinn wrote on July 03, 2008
Bob Sillerman is the best thing EVER to happen to Elvis. Without him, his vision and money, Elvis would be left floundering in in a sea of incompetency. Elvis will be more popular than he is now in twenty years time thanks to Sillerman. Mark my words.
commoneverybody wrote on July 03, 2008
Well Brian, i´m glad that your are optimistic..... but so far nothing proves that Sillerman is the best thing EVER happened to Elvis. So what are your thoughts based on? Hopes??? Anyway, i really hope i´m wrong and you are right :-)
dressingroomrehearsa wrote on July 03, 2008
well, 31 years is long time...not forgotten, but what will will be in 40 years time with lisa in her eighties...? I won't be around either...I guess, this is what it was.
elvislives72 wrote on July 03, 2008
The thing is everyone expects Robert Sillerman to make magic happen overnight. It just can't be that way. he's been on the ball ever since he bought the naming rights getting other investors interested in the name ELVIS PRESLEY to where they will want to be apart of this huge plan for Las Vegas and Memphis for starters. That article indicates that the heavily anticipated expansion at Graceland is about to get underway soon and the fact that Sillerman will be attending the Insiders this Elvis Week adds to it. And the legacy or image of Elvis is not fading slowly. If anything it's only gaining momentum and strength, thanks to Sillerman's long term plan. Bottom line is that these major residential-to-commercial redevelopments and projects take time to get all of the funding in place before groundbreakings can take place.
Harvey Alexander wrote on July 04, 2008
I can't help but think that Sillerman is nothing more than a Schmuck in a Suit. He's going to want BIG money back from his BIG investment, and if EPE's current activities are anything to go by - God help Elvis' memory. They will do ANYTHING to make a buck. That includes bastardising Elvis' name, image and likeness to the point of parody. Having impersonators as part of Elvis Week was the start of what I predict to be a very slippery slope.