All You Need is Merch (Ker-ching!)

As The Beatles phenomenon grew in scale, it soon became clear that money could be made by catering to obsessed British teenagers. Eventually, millions of pounds were spent on Beatle-goods, but initially, The Beatles’ manager, Brian Epstein, failed to see the profit potential.

Epstein viewed licensing as merely a form of public relations; therefore, the first Beatles merchandise – sweaters (for 30 shillings) and badges (for sixpence) – were marketed primarily to Beatles Fan Club members. These were handled by a small company run by his cousins, who eventually sold 15,000 sweaters and 50,000 badges as the Beatles’ popularity grew.

As Beatlemania spread over the UK in the summer of 1963, Epstein was soon besieged by novelty-goods companies seeking to use The Beatles’ name and images on all manner of merchandise.

Epstein stood firm; The Beatles would not directly endorse products, but would grant licences to companies that produced quality products at a fair price.

Looking for someone to manage the escalating volume of merchandising requests that NEMS couldn’t cope with, Epstein asked his London-based celebrity lawyer, David Jacobs, to oversee a solution and gave Jacobs power of attorney in the matter.

Jacobs invited Nicky Byrne, a Chelsea socialite and music business dabbler, to manage the merchandising and in December 1963, Byrne took control of Stramsact Ltd. in the UK and set up Seltaeb Inc. (Beatles spelt backwards) in the United States.

Astonishingly, when the contract was drawn up, Byrne was asked to choose whatever share of the profits he wanted, so he put down the first figure that came to mind — 90 per cent.

The deal was done and Epstein, without even seeing the contract, was assured that matters were now under control.

By Christmas 1963, shops were bulging with both officially licensed Beatles products and a large variety of unauthorised items.

These were cranked out by shady manufacturers who hoped to escape legal prosecution by changing a single letter (‘Beetles’ as opposed to ‘Beatles’).

There were plastic guitars, miniature drum kits, belts, badges, wallpaper, lockets, aprons, jigsaw puzzles, bedspreads, shoulder bags, kitchen aprons, pencils, serving trays, bubblegum and even a confectionery dubbed the ‘Ringo Roll’.

When The Beatles hit #1 in America with I Want To Hold Your Hand in February 1964, the Reliant Shirt Corporation paid Nicky Byrne’s company an instant $25,000 for the right to make Beatles T-shirts. They sold a million in three days.

The buoyant US economy meant American teenagers had considerably more purchasing power than their counterparts in the UK (who they outnumbered five to one).

According to the Wall Street Journal, Beatles goods would account for $50 million of US spending in 1964.

Byrne remembered handing a cheque for $9,700 to Brian Epstein when he flew into New York on 7 February.

Delighted at first, Epstein asked Byrne, “How much of this do I owe you?” to which Byrne replied, “Nothing, Brian that’s your ten per cent.” Byrne had just banked $97,000.

Lennon and McCartney were unhappy that Epstein had missed out on this commercial bonanza, but they may have been appeased slightly in April when they reportedly received a cheque for $140,000 – their share of the previous four months’ profit just from sales of Beatles chewing gum.

There were Authentic Beatles Wigs from Lowell; Beatles Shampoo (“for all the family”) and Beatles Hair Spray (“brushes out instantly”) from Bronson; Beatles magnetic toys from Merit; and Beatles stockings, pens, lariat ties, tie pins, and (note careful spelling) “Beetle” boots.

Also sold were Milton Bradley’s “The Beatles Flip Your Wig” board game, Aladdin’s Beatles lunchbox, and World Candies’ Beatles candy sticks.

The merchandise list quickly expanded to include egg cups, dolls, plastic windmills, crayon sets, airbeds, ice cream, bow ties, edible liquorice discs, masks, balloons, pillowcases, panties, umbrellas, garters, coat hangers, talcum powder, bread rolls, biscuits, cutlery, wallpaper, tea towels, ottomans, berets, ponchos and empty cans of “Beatle Breath”.

Remco’s darling, wiry-haired Beatle dolls were hot sellers, but their likenesses ran hot and cold. John and Ringo were OK, but George had King Charles’ teeth, and Paul resembled a Zanti Misfit (from The Outer Limits).

When Ben Cooper – purveyors of chintzy (but enchanting) Halloween costumes – did the Beatles, they did ’em right.

The boys appeared in good likeness on BC’s crackly, rigid, nostril-blocking, sweat-trapping masks.

Brian Epstein renegotiated a more favourable commission of 49% in August 1964, but then became embroiled in a three-year court battle with Byrne over payment of monies due.

Epstein accused Seltaeb of improper accounting and cancelled its licence-granting authority, prompting Byrne to file a counter-lawsuit seeking $5 million in damages.

Epstein then instructed NEMS employees to deal directly with American companies, so Byrne instigated court proceedings, which took three years to settle, as it entailed 39 individual claims against NEMS.

Byrne won the case, and Epstein paid the court costs and legal bills himself, although the judgement was later rendered null and void.

Because of the legal battle, many companies refused to finalise merchandising agreements, cancelling orders worth $78 million.

The court case and its effect were estimated to have cost NEMS and the Beatles approximately $100,000,000

In 1967, Brian Epstein launched Maximus Enterprises Ltd. to try to capitalise on the merchandising boom.

But as so many companies had withdrawn their interest in the wake of the Seltaeb fiasco – and John Lennon had angered many people in America’s Bible Belt with his remark that The Beatles were “more popular than Jesus”- the opportunity had passed.

In August 1967, Brian Epstein died from what was ruled an accidental overdose of sleeping pills and alcohol.

Lawyer David Jacobs was found hanged in his garage on 15 December 1968. His death remains a subject of speculation, and rumours suggest that shortly before his death, he was approached for legal help by an emissary of gangsters Ronnie and Reggie Kray.

He reportedly refused to assist them and had allegedly asked for police protection.

Byrne later retired to the Bahamas on his yacht.