Over the weekend “The Beach Boys” played a free concert in Boston (at the same concert Hatch Shell that hosts the Boston Pop’s annual Fourth of July extravaganza). It was fun to see this classic Southern California band that holds the record for having the most top 40 hits of any American band including Surfin’ Safari, Surfin’ USA, California Girls, and Good Vibrations.
I found it interesting that of the five original Beach Boys members, only one (Mike Love – the band’s lead singer) was on stage fronting a large band. Two members are deceased and the other two - Brian Wilson and Al Jardine - still play live concerts. Intrigued about the economics of “The Beach Boys,” I happily returned to my research days and started digging for information. Luckily, the Beach Boys are litigious – there are several publicly available court documents containing a treasure trove of interesting information.
Here’s what I found: “The Beach Boys” is a registered trademark of Brothers Record Inc (BRI), which is a corporate entity equally owned (25% shares) by Brian Wilson, the estate of Carl Wilson, Mike Love, and Al Jardine. In 1998, after the death of Carl Wilson and amidst dissension in the band, BRI met to decide how “The Beach Boys” trademark should be used. As a result of this meeting, Mike Love agreed to pay a royalty on all of his gross concert revenues for the right to tour as “The Beach Boys.” C’mon, take a guess at how much the royalty rate is…Mr. Love agreed to pay a 20% royalty on the first $1 million in gross receipts and a 17.5% royalty thereafter. WOW…20% right off the top (before expenses)! I was surprised - that’s a lot of money especially since concert touring expenses are so high: managers and agents take percentages, it’s expensive to travel with a large band, and sound/light systems are costly. Of course, since Mike Love owns 25% of BRI, the net royalty he pays is 15%...but still, quite pricey.
Mike Love is a hard worker; at age 66 he performs approximately 150 live concerts per year globally (here’s a sample tour rider). As a result, both he and BRI have profited handsomely. Care to guess how much in total he has paid in royalties to tour as “The Beach Boys?” In a 2005 law suit, Mike contends that between 1998 and 2005, he paid over 11 million dollars in royalties to BRI. This means he has received gross payments of over 55 million dollars to sing “The Beach Boys” classic hits. It’s nice to be Mike Love.
We all know that brands are valuable. But from a Value Decoder perspective, I’m always interested in understanding exactly how much a brand is worth. In this case, a heck of a lot! This value is illustrated by a comment from a friend of mine who is mildly interested in music. Amidst my shock over the 20% royalty, he commented “Rafi, I know who ‘The Beach Boys’ are but I have no idea who Mike Love is.” He has a good point and Mike Love obviously feels it is worth paying $11 million dollars to tour as “The Beach Boys” as opposed to “Mike Love, former lead singer of ‘The Beach Boys.’”
With only a few weeks of summer left, I think we all should take time to enjoy the fun and sun spirit of “The Beach Boys” music!