Elvis Presley Enterprises, Inc.

views updated

Elvis Presley Enterprises, Inc.

P.O. Box 16508
3737 Elvis Presley Boulevard
Memphis, Tennessee 38186-0508
U.S.A.
Telephone: (901) 332-3322
Toll Free: (800) 238-2000
Fax: (901) 345-8511
Web site: http://www.elvis.com

Private Company
Incorporated: 1981
Employees: 500
Sales: $50 million (2003 est.)
NAIC: 711410 Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures; 712110 Museums; 712120 Historical Sites

Elvis Presley Enterprises, Inc. (EPE) manages Graceland and other assets of the Elvis Presley Trust, which is owned by Elvis Presley's daughter, Lisa Marie. EPE owns the rights to Elvis's name and likeness, and some music publishing. RCA Records, now a unit of Bertelsmann Music Group (BMG), acquired rights to his recordings before 1973. There were 110 official licensees producing 700 Elvis-related items in 2002. Elvis Presley was the largest-selling recording artist of all time and continued to be BMG's biggest star 25 years after his death. From the beginning of his recording career in 1954 to 2002, Elvis Presley sold one billion records around the world; he had 131 gold and platinum albums in the United States; he also made more than 30 movies.

EPE also manages his estate's real estate holdings, centered around that most evocative address, Graceland. With 650,000 visitors a year, Graceland, Presley's Memphis mansion, is second only to the White House among the most visited residences in the United States. EPE does not release financial information, and estimates of annual revenues vary from $25 million to $250 million, with $50 million a likely number. With an economic impact of up to $400 million a year for Memphis, and charitable programs reminiscent of Presley's legendary generosity, EPE is one of that city's prized corporate citizens.

Origins

Elvis Presley Enterprises, Inc. was formed in 1981 to take care of business, the business of managing the estate of the most influential popular singer of all time. Elvis Presley died on August 16, 1977. He had been legendary for giving away such items as Cadillacs (as many as 14 in one day), and he left assets valued at $4.5 million to $10 million—a relatively small fortune, considering Elvis's stature.

Elvis's father, Vernon Presley, was made executor of his estate, but he too died two years later, in 1979. By this time, reported Britain's Daily Mirror, royalty revenues had fallen to $1 million a year, with little left over after the upkeep of Graceland. Worse, the estate owed the Internal Revenue Service $13 million in inheritance tax.

It was then left to Elvis's ex-wife, Priscilla Beaulieu Presley, to look after the estate, as stipulated in Vernon Presley's will. She had two co-executors, the National Bank of Commerce of Memphis, and Elvis Presley's former accountant, Joseph A. Hanks.

A for-profit company, Elvis Presley Enterprises, Inc. (EPE), was set up in 1981 to manage the assets of the estate. Jack Soden, a former stockbroker, was brought in as executive director. Priscilla Presley had been a client of his through Kansas City, Mo.-based Strategic Financial Services. According to the New York Times, Soden was able to impress upon Mrs. Presley the importance of guarding the integrity of Elvis's brand identity.

The first order of business was to take care of Graceland. The 23-room mansion was reportedly costing $500,000 a year to maintain. Both the City of Memphis and the Grand Ole Opry declined to operate it as a public attraction, so Soden was placed in charge of this iconic landscape at the tender age of 35. He modeled the operation after that of the Hearst Castle in San Simeon, California.

Graceland had been built in 1939 on the site of a farm owned by a wealthy Memphis family. The surrounding area was eventually developed into a suburb called Whitehaven. Presley bought the mansion in 1957 for $102,500. He was only 22 years old at the time, and would live there throughout his adult life. Graceland was also a gift to his parents and grandparents, who lived there until he died. It was the opposite of the Mississippi shotgun shack Elvis's father had built by hand during the Depression.

Over the course of two decades of redecorating, it had come to be filled with stylistic excesses of the 1970s, including red and gold walls and elaborately carved oversized furniture. Some of the affected rooms were tastefully returned to their 1950s charm prior to Graceland's opening to the public.

Presley's estate spent $550,000 to ready the mansion for public tours. Graceland—at least the main floor—was opened to public tours on June 7, 1982. Some of Elvis Presley's relatives continued to live on upper levels, and he himself was buried on the grounds.

By the mid-1980s, Graceland was drawing 500,000 visitors a year. Attractions on the 32-acre complex included Elvis's tour bus, two private planes (the "Lisa Marie" Convair airliner and the "Hound Dog II" Lockheed Jet Star corporate aircraft), and eight gift shops.

Taking Care of Business in the 1980s

Two developments cemented EPE's role as custodian of Elvis's name and likeness. In 1983, Presley's controversial former manager, Colonel Tom Parker gave up all rights to Elvis's name and likeness for $2 million, an EPE spokesman told the Chicago Sun-Times. EPE lobbied for a law passing rights to deceased celebrities' images to their heirs, resulting in Tennessee's Personal Rights Protection Act of 1984.

Another area was also being tidied. In November 1983, the estate and a pair of Kansas City investors acquired an adjacent strip mall of souvenir shops for $2.5 million. A reported $1 million was then spent to upgrade its façade and landscaping; the site was relaunched as "Graceland Crossing" in 1987. It featured a retro diner as well as gift stores.

Debbie Johnson became general manager of EPE in 1987. Revenues that year were estimated at around $9 million. Graceland then employed 70 full-time and 300 seasonal workers.

Though Elvis's early generations of fans were aging, over half of Graceland visitors were younger than 35, reported the Boston Globe. There were more than 300 fan clubs around the world. Graceland was a kind of Mecca for rock stars of the day: Paul Simon wrote songs about it; Bruce Springsteen was said to have jumped the fence one night while Elvis was still in the building.

Presley had supported 50 local charities while he was alive. This legacy continued on May 14, 1985, as EPE formed the Elvis Presley Memorial Foundation, Inc., later called the Elvis Presley Charitable Foundation (EPCF).

Still Making History in the 1990s

Graceland was added to the National Register of Historic Places in November 1991. A widowed aunt, Delta Biggs, was the last of Elvis's relatives to live at Graceland; she died in 1993. In the early 1990s, Graceland increased its attention on special events such as family reunions and corporate meetings.

The U.S. Postal Service issued an Elvis stamp in January 1993. With 500 million printed, it had by far the largest circulation of any commemorative stamp until then.

Lisa Marie was scheduled to inherit the estate when she turned 25 in 1993. She chose to form a new trust, the Elvis Presley Trust, retaining the three executors. Priscilla Presley handed the trust over to Lisa Marie in 1998. In the 20 years she had been responsible for it, it had gone from being nearly insolvent to being worth an estimated $200 million.

Graceland had a record 750,000 visitors in 1995. It employed 500 people at the peak season surrounding the anniversary of Elvis Presley's death—Elvis Week. This culminated in a candlelight vigil on August 15 that drew thousands of fans.

A Virtual Graceland CD-ROM was released in the summer of 1996. By this time, EPE's corporate headquarters had moved to a two-story building next to the grounds. The Sincerely Elvis Museum showcased Presley's considerable collection of memorabilia.

A restaurant and nightclub, Elvis Presley's Memphis, opened on historic Beale Street in 1997. The menu featured Southern cooking, including Elvis's favorite dishes. Opened at a cost of $5.3 million, it was shut down in October 2003 after six years in business.

At the 20th anniversary of Elvis Presley's death in 1997, there were more than 100 companies manufacturing more than 500 licensed products, noted the Boston Herald. International Creative Management Inc. had been hired to explore licensing possibilities. In 1998, EPE produced a live show in conjunction with SEG Events, featuring members of the Taking Care of Business Band performing live along with a video projection of archived clips of Elvis himself.

The privately owned company did not release sales figures, and revenue estimates varied wildly, from $35 million to $500 million a year. Graceland's revenues alone were estimated at $20 million to $25 million based on an adult ticket price of $18.50 in 1998.

Company Perspectives:

Elvis Presley Enterprises, Inc. (EPE) is the corporate entity that was created by the trust to conduct business and manage its assets. EPE is wholly owned by the Elvis Presley Trust. The Graceland operation in Memphis is a major source of revenue for EPE and is the home base. EPE also has an office in Los Angeles.

EPE's business extends far beyond the Graceland operation. It includes worldwide licensing of Elvis-related products and ventures, the development of Elvis-related music, film, video, television and stage productions, the ongoing development of EPE's Internet presence, the management of significant music publishing assets and more.

EPE acquired a nearby Wilson World hotel for $3.2 million and spent another $3 million to transform it into the Heartbreak Hotel, which opened in 1999. Its modern, eclectic furnishings were much more luxurious than might be suggested by the famous song that gave the inn its name. Four of the suites were modeled after rooms at Graceland. Others included the Hollywood Suite, a nod to Elvis's 1950s film career, and the "Burning Love" honeymoon suite. There were 128 rooms in all.

Elvis's family had once lived in public housing, and Lisa Marie Presley displayed an interest in the concerns of homelessness. Through the EPCF, she funded Presley Place, a 12-unit transitional housing development in Memphis. It opened in 2001. Interestingly, its laundry building was styled after Graceland, reported the Commercial Appeal.

Thriving After 25 Years

Fifty employees were laid off at Graceland in the lull in tourism that followed the September 11, 2001 terrorist attacks on the United States. However, the business soon recovered. Soden told the New York Times there were no plans to take the company public. Lisa Marie Presley remained the sole shareholder.

A number of record-setting events accompanied the 25th anniversary of Elvis's death. The Disney film Lilo & Stitch incorporated a half-dozen Elvis songs in its soundtrack. A dance club remix of "A Little Less Conversation" topped the charts worldwide after first appearing in a Nike ad. Presley also had a chart-topping album, 30 No. 1 Hits, that sold nine million copies around the world. Forty percent of Elvis's record sales were abroad; foreign visitors accounted for up to one-third of revenues at Graceland.

There were 110 official licensees producing 700 Elvisrelated items in 2002. Merchandise included Graceland-inspired furniture produced by Vaughan-Bassett, and a special edition of the Monopoly board game. The web site was getting 45 million hits a month. Exposure from the 25th anniversary carried over into increased sales in 2003.

Elvis Presley remained one of the most enduring icons of American pop culture. According to EPE spokesperson Todd Morgan, "The way we say it at Graceland is, if music is the universal language, Elvis Presley spoke it fluently. And when he opened his mouth to sing, the whole world listened and understood and sang along."