the sale of EPE a good or bad thing?
fans have reacted quickly and emotionally to Lisa Presley's
sale of majority interest in EPE to Robert Sillerman. Widespread
concern and condemnation has been registered on messageboards,
through email groups and via an online petition against the
owner of EPE Lisa has made a decision, while unpopular with
many, that she had every right to make and one that we are
sure was not taken lightly and one that was only done because
Lisa fervently believes it is the appropriate way to ensure
the Elvis legacy continues to grow and prosper.
is EIN's view that Elvis fans should be optimistic about the
is well known that EPE's earnings have plateaued in the past
two years and its business ventures with Elvis Presley's Memphis
(now closed) and Heartbreak Hotel have not been the success
EPE had originally expected (with a related, significant capital
debt to be met).
to the mix the "greying" of the core Elvis demographic and
the consequent need to open up the Elvis market to a younger
generation, and we can appreciate how Lisa Presley and the
EPE board could see the need to inject some real dynamism
into the EPE business operation. In a capitalist system most
major businesses only survive if they grow.
Presley's decision to sell majority ownership of EPE to Robert
Sillerman has the potential to reap substantial benefits in
the future. Sillerman's business credentials are impressive
and it may just be that it will be the injection of his proven
business skills, new ideas and ability to achieve goals that
transforms EPE and takes it to the next level.
fans fear that the Elvis brand will become something nefarious
and that the core element of "Elvis = music" will be lost.
Elvis already is a global icon like Mickey Mouse and Coca-Cola,
and while Robert Sillerman is sure to develop some new initiatives
that will anger (some) fans, hasn't this has always been the
case anyway - since EPE opened Graceland and began marketing
Elvis as a "trademark" in the 1980s?
of us just don't like progress. Sometimes this is warranted,
sometimes it isn't.
than get caught up in an emotional reaction to the sale we
should view the decision as an exciting opportunity to bring
the Elvis legacy to a larger, 'global' family of fans and
to introduce the Elvis icon in new and innovative ways to
diverse markets worldwide.
Sillerman's guidance there is considerable potential to expand
the Elvis business empire, attract new fans, and as Lisa Presley
has expressly stated, effectively protect and preserve the
Elvis legacy for future generations.
US$100 million enough for EPE?
commentators have suggested the sale price undervalues the
worth of the EPE assets. EIN offers the following analysis.
Elvis has been the #1 earning dead celebrity on the annual
Forbes Annual list since it was introduced four years ago,
the estimated earnings for EPE ($40 million in 2004) are a
gross figure. Net profit is more likely in the range of $5
million to $7 million per annum.
net profit into the future, it means the sale price equates
to up to 20 years annual profit based on current net profits.
plateauing earnings, other business ventures not succeeding
and capital debt to be met, Lisa Presley and the EPE board
may have internally forecast diminishing returns rather than
increased profits if EPE continued to operate solely under
their control and direction. At the same time Lisa Presley
retains a 15% interest in future profits. And if Robert Sillerman
is successful in taking the Elvis brand to the next business
level, the profits generated could be significantly greater
than what has been achieved by EPE until now.
also need to remember that Lisa Presley retains ownership
of Graceland and all of Elvis' personal belongings, a not
sale price would have been carefully considered by both parties
and Lisa Presley's acceptance of the Sillerman offer would
not have been made in isolation from high level financial
all of the above factors it appears the sale price is a reasonable