New Year, New Challenges

A very happy 2005 to everyone
in cyberspace!

As usual, my plans and my excecution aren't matching up. This update should have been written a week or two ago, but 2005 is alreading proving to be chock full of new personal and professional opportunities and juggling acts are never easy.

The most important has been a career change. The short version: I left here to work here.

Most business professionals who are approached for a second time to with an offer to do the same job in a more relaxed environment with an improved client base and better comission structure would leap at the chance before it dissapeared. I, on the other hand, was damn near drug away kicking and screaming.

Maybe it wasn't that dramatic, but it was hard for me to leave behind all the personal relationships I'd fostered with my last firm. They really, really liked me over there - from the Vice-President of Sales all the way down to the new hire that just asked me for some advice on how best to persue his next account. I had seen the current management staff rise up through the ranks, and that respect and familiarity with management afforded me a fair amount of credibility with most everyone I worked with. These people were my friends. They looked out for me. In turn, I did my best to remain focused on my job and flexible in my tasks.

On the other hand, my old firm promoted a corporate culture of exclusion - you're either with us or you're against us. Though a certain level of that mentality can be allowed given the rampant competition in my industry, the thought of never being around an environment which had become so disfunctionally comfortable certainly gave me pause. Knowing that once I'd made it official that I was leaving for "the competition", and how that would be responded to with an immediate escort from the office without an opportunity to say any proper goodbyes almost made me reject the new offer again.

I pride myself on my loyalty. It's so important to my personal and professional relationships that my wife has identified it as a borderline character fault. I was leaving for the competition I thought to myself. How could I turn my back on everyone like that?

Once I realized that it was less of "turning my back" and more of "accepting a better opportunity to provide for my family", the choice became less difficult. I was still escorted out almost immediately, and ended up being short a week's worth of pay as a result. Though I'm going to attempt to recover my missing funds, there is a part of me that wants to chalk it up to a fundamental business error; I failed to put it in writing.

This brings me to the promised topic from last post - business lessons from The Beatles.

The Fab Four Flounder Financially

Quick history lesson; in 1976, my stepbrother loaned me his collection of original Beatles albums for me to record and return. Somehow, more than 30 years later, I still have everything from Vee-Jay Records' release of "Introducing The Beatles" to "Let It Be" in my posession.

Johnny, really. If you want them back just call me. At least I'd get a chance to hear from you guy!

That Liverpudlian quartet ended up affecting my life more deeply than any one influence aside from Mom and Dad. I know more about their history and details than someone born the same
day on the first day of recording "Hey, Jude" probably should, but without their style as one of my guiding lights I'd hardly be the witty, charming screwball everyone knows and loves today.

Now back to the point; while rearranging our living room, my wife and I were having a free flowing discussion about growing her startup professional services business. We were discussing comission structures between my "old" and "new" firms as I moved my antique Remco Beatle dolls, and I found my thoughts turning to a story I'd read about Beatle manager Brian Epstein's incredible failure in managing the Fab Four's merchandising opportunities as Beatlemania stood at the cusp of becoming a worldwide phenomenon.

Though Brian had a keen sense of style and theatrics, he had only passing talents in business. To his credit, few entertainment managers in 1963 really knew how to negotiate licences for products like dolls, t-shirts and acne cream, but even a gay theatre major should have known to "get it in writing" and to be precise in his language.

It's a startling tale when you think of how many doors the flood of Beatle-labled products have opened in the years since. In fact, anyone with a background in finance or management will find it positively cringe-worthy. But rather than recap, it's easier to excerpt the well scribed words of Peter Brown from his book The Love You Make.

In the beginning Brian's office handled the merchandising requests, deciding which would be honored and which denied, but Brian soon became bored with persuing dolls and rubber boots and began to look around for someone to take care of the matter for him.

He made some inquiries around Londo for a solicitor. Brian wanted an attorney who would be a confidant as well as a legal advisor, and he was always referred to the firm of one David Jacobs. Of course, Brian had already heard of David Jacobs, the flamboyand celebrity attorney whose exploits were carefully covered by the Fleet Street press.

Jacobs finally advised Brian to set up a completely separet company for the merchandising end, from which Brian and The Beatles would simply take a percentage of the profits, while they did the work. Jacobs said he knew of someone who would "take the merchandising business off their hands," which is exactly what he did.

His name was Nicky Byrne, and Jacobs knew hims personally through social circles. Byrne had once been a partner in a club called the Candor Club, so he knew all about show business, Jacobs contented. Byrne agreed to take on the job of merchandising and formed a partnership with five friends, none of whom Brian or Jacobs knew. His other partners were all in their twenties, and one of them was allowed to buy a 20% share in the business for only 1000 pounds sterling.

David Jacobs had Brian's power of attorney in the matter and was prepared to sign the contracts in his absence. The one point still unnegotiated in the contracts was simple: the percentages to each of the parties. Now Brian and Jacobs knew there was a lot of money to be made in merchandising, but no on knenw exactly how much. A little bit of research would have turned up the fact that Elvis Presley-licensed soft goods had grossed over $20 million in 1957 alone.

Jacobs casually asked Byrne what percentage he wanted. Byrne glibly suggested 90% for himself, epxecting Jacobs to start barganing. Jacobs nodded. "Well," he said, "10 percent is better than nothing," and he signed the contracts.

Brian had never studies the finalized agreements, nor thought about the terms until he had a meeting with Nicky Byrne in New York. Then Nicky presented him with a check, collected funds from merchandising, for $9,700.00. Brian was delighted. It was an unexpected $9,700.00 and after all, he had agreed to three appearances on the Ed Sullivan show for what had averaged out to be $2,400.00 and appearance. This would help offeset some of the losses.

"How much of this do I owe you?" asked Brian.

"Nothing, Brian. That's your 10%," Byrne said.

All Brian understood was that he was to keep the entire amount of the check. "That's marvelous, Nicky. How do you do it?"

Nicky explained that he had already collected over $100,000.00 and that after expenses there was $97,000.00, of which Nicky was keeping $88,000.00. And that was only the beginning, Nicky added. He had already been offered $500,000.00 for his share of the partnership by Columbia Pictures, with Ferrari automobiles thrown in
for all the partners in Nicky's firm.

When it dawned on Brian what had happened he became physically ill. Thinking of it make him want to vomit. One of the first deals that Byrne had made was with the Reliant Shirt Corporation to make Beatles t-shirts for which they'd pay $100,000.00.

Brian at first thought that figure to be inflated, until he learned Reliant had sold more than one million shirts in three days. REMCO, one of the best-known toy manufacturers in America, bought the licesning to manufacture dolls. They had produced 100,000 dolls with orders for a half-million more.

It took a long, long time for the magnitude of it to sink in. Nicky Byrne's personal income alone, Brian estimated, could add up to five million dollars. Brian was sick. They had given it away! An incomprehensible sum signed away for nothing! He wondered what The Beatles would say when they found out. He decided it was best they know nothing about it for the time being and plotted to keep it from them. The task of getting it back began to gnaw at him. It was his first major failure, and for all the good success, he felt a fool.

A cautionary tale, to be sure. Though it pains me a little to know my heroes were only paid pennies for their rubber and nylon likenesses on my shelf, the knowledge that it was recovered
in the merchandising flood for the film release of Yellow Submarine makes the hurt bearable.

Of course it's not like thousands of dollars of my own money hasn't found its way to the coffers of Yoko and "The Threetles" over the years. So no, I don't really feel bad for them at all. Not a bit. I'm just glad that I got to know them even as a "secondhand fan".

With that I'll dim the Lantern's Light for this session.

NEXT - Back to business?