Management
 
As the Beatles increased their popularity, Brian Epstein took on additional performers. In order to keep track of the offers that began to flood his office, he established NEMS Enterprises as the business entity. He brought on Tony Barrow to manage promotion, and to shape their initial interviews. At first, he spent much of his time as do most agents: calling newspapers and radio and television directors seeking airtime for NEMS artists. Eventually, however, he managed an increasingly aggressive press who now sought interviews and information.
The Beatles needed a tour manager. The days of travelling in freezing vans with Mal Evans driving and loading equipment were over. Epstein placed Brian Sommerville in charge of the tours to control interviews, to sign the hotel bills, and to negotiate with theater managers and police.
An even more lucrative and problematic area had to do with the licensing of the Beatles image. Widespread merchandising infringement went largely unchecked. For example, a Bethnal Green (East London) factory was producing "several thousand" Beatle wigs each week (Norman 207). Others changed the spelling to "Beetles" to claim their own marketing niche. This was certainly massively larger than any previous British experience.
Epstein saw mercshandise as a way of promotion, not a source of profit and at first, inspected each product (quality was important to him) so that official products were reasonable goods. He also refused direct endorsement by the Beatles, probably fearing this would belittle them as artists. (Indeed, this was one of the marks of Epstein's style: he actually considered pop musicians to be artists.)
By late 1963, Epstein realized that this part of the business had grown too large, too fast for him to reasonably control, and so he handed the issue over to his solicitor, David Jacobs. Jacobs, in turn, denoted Nicky Byrne to organize licensing. He formed Stramsact with a subsidiary, Seltaeb ("Beatles" spelled backwards) for American rights (should there be any developments).
David Jacobs drew up the Stramsact-Seltaeb / NEMS agreement with Byrne asking for, and receiving 90% of the profits! Jacobs and Epstein, not fully fathoming the value (both monetary and cultural) of this business, believed that their 10% is better than the nothing they were currently getting.
They had no idea of how massive this side of pop culture could be. In all likelihood, the Beatles and NEMS lost millions of pounds and dollars on the sale of Beatles inspired goods from the aforementioned wigs to the more common lunch boxes, clothing, and publications. [The lesson has not been lost on the remaining members of this crew who now jealously guard and control access to their image and materials.]
Lennon later commented:
I like Brian, and I had a very close relationship with him for years. I was the closest to Brian, as close as you can get to somebody who likes a sort of fag life. In the group I was the closest to him. He had great qualities and he was good fun. He had flair and he was a theatrical man rather than a businessman, so in that way, I liked him. But on the business end, he ripped us off on the Seltaeb thing! Brian made some deal somewhere, and I know Brian ripped us off. We never got anything out of it (Seltaeb) and Brian did! NEMS was a bigger company than the Beatles was. We have no company. The myth is that he was the great, good guy. Brian was a fag, and in tortured pain." (Badman 2000: 79)
For a website devoted to Beatle finances go to Beatle Money.
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Marketing Outline Beatlemania
  31-aug-09