Seltaeb: Difference between revisions

| logo = [[File:Sign-beatles-buttons01.jpg]]
| logo_caption = A poster advertising products for sale; licensed by Seltaeb

'''Seltaeb''' was a company set up in 1963, by Nicky Byrne (''né'' Douglas Anthony Nicholas Byrne) to exclusively look after [[merchandising]] interests on behalf of [[Brian Epstein]], who managed [[NEMS Enterprises]] and [[Thethe Beatles]]: [[John Lennon]], [[Paul McCartney]], [[George Harrison]], and [[Ringo Starr]].

Directly prior to Thethe Beatles' first American visit, Brian Epstein wanted someone to manage the escalating volume of merchandising requests that NEMS found itself unable to cope with, and asked his lawyer, David Jacobs, to oversee this task. Jacobs knew Nicky Byrne and asked him if he would be interested in taking over the merchandising subdivision from NEMS altogether, paying NEMS a commission. Byrne accepted the offer subject to a 90% rate, leaving only 10% for the Beatles and NEMS combined. Completely unaware of the potential market that existed, particularly in Americathe United States, Epstein agreed to the deal, and subsequently lost Thethe Beatles an estimated $100,000,000 in possible income.

In December 1963, Byrne took over the control of Stramsact in the UK, and then set up Seltaeb (Beatles spelt backwards) in the United States. Epstein was able to renegotiate a more favourable commission of 49% in August 1964, but then became embroiled in a three-year court battle with Byrne regarding payment of monies due, during which time potential sponsors lost interest. In August 1967 Epstein died, from what was ruled an accidental overdose of a prescribed drug. Jacobs was found hanged in his garage on 15 December 1968. Byrne later retired to the Bahamas.

Before the Beatles achieved nationwide success in Britain, Epstein had permitted a small company (run by his cousins, and which initially catered only to fan club members)<ref name="Mojop100">Mojo Magazine (2002). ''Special Limited Edition # M-04951 '', p. 100.</ref> to produce Beatles' sweaters for 30 [[shillings]] and badges for six [[penceSixpence (British coin)|sixpence]], eventually selling 15,000 sweaters and 50,000 badges as the Beatles' popularity grew.{{sfn|Coleman|1989|p=35}} When [[Beatlemania]] stormed the UK in 1963, Epstein was besieged by [[Novelty item|novelty goods]] companies wanting to use Thethe Beatles' name and images on plastic guitars, drums, disc racks, badges, belts and a huge variety of assorted merchandise. Epstein was adamant that the Beatles would not directly endorse any product, but through NEMS Enterprises he would grant discretionary licences to companies who were able to produce a quality product at a fair price, although many companies were already selling products without a licence.{{sfn|Spitz|2005|p=465}}

When NEMS was swamped with offers of endorsements from Americathe United States following the success of "[[I Want Toto Hold Your Hand]]", Epstein, who was usually meticulous in matters involving the Beatles, decided to delegate this responsibility as he felt it was distracting him from his main task of managing his expanding roster of artists.{{sfn|Brown|Gaines|1983|p=112}} He then asked Jacobs, his London-based, Hove-living celebrity lawyer who lived in [[Hove]] (Jacobs's other clients included [[Marlene Dietrich]], [[Diana Dors]], [[Judy Garland]], [[Liberace]] and [[Laurence Harvey]]){{sfn|Brown|Gaines|1983|p=111}}{{sfn|Norman|1993|p=171}} to appoint someone specifically to take over the assignment and gave Jacobs [[power of attorney]] in the matter.{{sfn|Brown|Gaines|1983|p=112}} Jacobs at first handed the daily management of this to his chief clerk, Edward Marke, but it transpired that Marke knew almost nothing about the merchandising business, and so Jacobs was forced to look elsewhere.<ref name="BeatleMoneyMerchandising">{{cite web |url= http://www.beatlemoney.com/epstein6467.htm |title=Merchandising |publisher=Beatle Money |access-date=2008-08-04}}</ref>

Byrne controlled two companies: Stramsact in the UK and Europe, and Seltaeb in the USAUnited States. He invited five friends to become partners — four of whom were unknown to either Jacobs or Epstein — with each investing around $1,600. They were: Mark Warman, Simon Miller-Munday, John Fenton (a business acquaintance of Jacobs),{{sfn|Norman|1993|p=202}} [[Peregrine Eliot, 10th Earl of St Germans|Peregrine Eliot]] (heir to the ninth [[Earl of St Germans]])<ref name="TheTimesDec91964">[[The Times]]: "$1 Million lawsuit" (9 December 1964)</ref> and Malcolm Evans (not to be confused with [[Mal Evans]], the Beatles' roadie).{{sfn|Harry|1992|p=127}}

During the first Beatles' flight to Americathe United States, Epstein was offered numerous samples of products by merchandisers who required a licence to be allowed to sell them such as clocks, pens, plastic wigs, bracelets, and games. Epstein rejected all of them;{{sfn|Spitz|2005|pp=458-464}} directing the merchandisers to Byrne instead, who was already in New York ensconced in [[The Drake Hotel, New York|The Drake Hotel]] on Park Avenue at 56th Street.<ref name="BeatleMoneyMerchandising"/> Byrne rented expensive offices on [[Fifth Avenue]], hiring two limousines (on 24-hour standby) and a helicopter to fly clients to and from the airport,<ref name="BeatleMoneyMerchandising"/> insisting that only the presidents of merchandising companies were allowed to talk directly with him, or with his partner, Lord Eliot, who helped to promote the company name with use of his title.{{sfn|Ryan|1990|p=103}} Eliot would later recall going to the Seltaeb office once or twice a week to draw $1,000 from [[petty cash]].<ref name="BeatleMoneyMerchandising"/>

The ''[[Wall Street Journal]]'' predicted that American teenagers would spend $50 million during 1964, on wigs, dolls, egg cups, T-shirts, sweatshirts and narrow-legged pants,{{sfn|Harry|1992|p=584}} and the ''[[The New York Times]]'' wrote that the Reliance Manufacturing Company's factories were "smoking night and day&nbsp;... to meet demand",<ref name="RelianceManufacturingCompanyHistoricalBoysClothing">{{cite web|url=http://histclo.com/Fashion/store/man/alpha/r/man-rel.html|title=Manufacturers of Boys' Clothing: Reliance Manufacturing Company (United States) |publisher=Historical Boys' Clothing |access-date=2009-07-19}}</ref> and had already sold products valued at the retail value of $2.5 million.{{sfn|Spitz|2005|p=466}} The Reliant Shirt Corporation paid $100,000 for a licence and sold over a million Beatle T-shirts in three days,{{sfn|Harry|1997|p=584}} [[Remco]] Toys had produced 100,000 Beatles' dolls and had orders for another 500,000,{{sfn|Brown|Gaines|1983|p=114}} and the Lowell Toy Corporation were selling Beatle wigs faster than they could produce them, at more than 35,000 per day.{{sfn|Brown|Gaines|1983|p=114}}

Seltaeb licensed over 150 different items internationally: Beatle dolls, scarves, mugs, bath water, wigs, T-shirts, bubble gum, liquorice, empty cans of "Beatle Breath", badges, and many more.<ref name="PowerhouseMuseumMerchandise"/> The badges had "Seltaeb 1964 Chicago Made in USA" on one side, and "Green Duck Co., Chicago Made in USA" on the other. (The Green Duck metal stamping company was based at 1520 West Montana, Chicago, operating from 1906 until the late 1960s, making election badges for politicians, as well as memorial spoons).<ref name="GreenDuckCovPatterson">{{cite web |url=http://www.oscn.net/applications/oscn/deliverdocument.asp?citeid=9231 |title= Green Duck Co. v. Patterson |publisher=Supreme Court of Oklahoma |date=1912-10-23 |access-date=2008-09-11}}</ref> American businessmen saw Thethe Beatles' merchandising as the "biggest marketing opportunity since [[Walt Disney]] created [[Mickey Mouse]]".{{sfn|Norman|1993|p=210}} The [[Columbia Pictures Corporation]] offered to buy Byrne's share in the companies for $500,000, with the incentives that the money would be paid into a low-tax [[offshore bank]] account in the [[Bahamas]], Byrne and his partners would retain 50% control of the companies, and Ferrari cars would be given free to every partner, but Byrne turned down the offer.<ref name="BeatleMoneyMerchandising"/>

Byrne passed on the first cheque for $9,700 (US${{formatnum:{{Inflation|US|9700|1964}}}} in {{Inflation-year|US}} dollars{{inflation-fn|US}}) to Epstein, who was impressed, but after innocently asking how much out of the amount Byrne was owed, was told, "Nothing Brian, that's your 10%". Byrne then went on to describe the massive amount of interest he was getting from companies across the USAUnited States. Epstein was horrified, realising he had made an appalling error by accepting such a small percentage, and decided he could never tell Thethe Beatles.{{sfn|Brown|Gaines|1983|p=113}} He immediately instructed Jacobs to re-negotiate the contract with Byrne, which was finally achieved seven months later, in August 1964, which raised the royalty to 49%.{{sfn|Spitz|2005|p=543}}

In ''[[The Times]]'' on 9 December 1964, it was reported that Eliot was suing Byrne for damages of $1 million (US${{formatnum:{{Inflation|US|1000000|1964}}}} in {{Inflation-year|US}} dollars{{inflation-fn|US}}). Eliot accused Byrne of spending $150,000 for his "personal comfort and benefit", over some months. The suit also accused Byrne of charging hotel bills to Seltaeb, which were as much as $19,000 every week for girlfriends, and also opening "charge accounts for them in [[Fifth Avenue]] shops".{{sfn|Norman|1993|p=253}} Eliot also alleged that Byrne had hired a chauffeur for $700 a week and had withheld $55,000 in royalties to NEMS, after which NEMS had said they would cancel the agreement between the two companies unless monies were forthcoming. Byrne denied all the charges, but admitted he had hired a chauffeur, as he was not familiar with the streets of New York. A supreme court judge [[Reserved decision|reserved his decision]].<ref name="TheTimesDec91964"/>

Epstein accused Seltaeb of not accounting properly, and cancelled its power to grant licences, which started a counter-lawsuit by Byrne against Epstein's New York accountant, Walter Hofer, asking for $5,168,000 in damages (US${{formatnum:{{Inflation|US|5168000|1964}}}} in {{Inflation-year|US}} dollars{{inflation-fn|US}}).{{sfn|Spitz|2005|p=544}} 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.<ref name="PowerhouseMuseumMerchandise">{{cite web |url= http://www.powerhousemuseum.com/collection/database/?irn=12283 |title= Beatles merchandise (Australia) |publisher=Powerhouse Museum |access-date=2008-08-04}}</ref>{{sfn|Spitz|2005|p=544}} Byrne won the case, and Epstein paid the court costs and legal bills himself, although the judgement was later [[Vacated judgment|vacated]];{{when|date=March 2020}} meaning to cancel it, or render it(rendered null and void).{{sfn|Spitz|2005|p=544}} Due to the legal battle, [[F. W. Woolworth Company|Woolworth's]], [[J. C. Penney|Penney’s]], and other companies refused to finalise any merchandising agreements, cancelling orders worth $78 million.{{sfn|Spitz|2005|p=544}} The court case and its effect was estimated to have lost NEMS and Thethe Beatles approximately $100,000,000.{{sfn|Harry|1997|p=584}}

Epstein, in 1967, launched Maximus Enterprises Ltd.,<ref>{{Cite book|last=Soocher|first=Stan|url=https://books.google.com/books?id=SIJ7CgAAQBAJ|title=Baby You're a Rich Man: Suing the Beatles for Fun and Profit|date=2015-08-22|publisher=University Press of New England|isbn=978-1-61168-813-9|pages=27|language=en}}</ref> to try to capitalise on the merchandising boom,<ref name="q magazine">Ballantyne, Maddy. ''Q Collectors Limited Edition'', p61</ref> but as so many companies had withdrawn their interest in the wake of the Seltaeb fiasco,{{sfn|Harry|1997|p=584}} and Lennon had angered America's [[bible belt]] with his remark suggesting that Thethe Beatles were "more popular than Jesus", the opportunity had passed.{{sfn|MacDonald|1998|p=188}} Epstein feared that the Beatles would not renew their contracts with him—due to expire in the Autumn of 1967—if they discovered the truth about Seltaeb.{{sfn|Brown|Gaines|1983|p=217}}{{sfn|Norman|1993|p=293}} Epstein's problems with Seltaeb would remain with him until his death on 27 August 1967,{{sfn|Norman|1993|p=293}} from what was ruled an accidental overdose of a prescribed drug.{{sfn|Brown|Gaines|1983|p=211}} Many investors had also missed out on massive profits following the cancelling of contracts, and Byrne would later claim of having received two mysterious phone calls foretelling of Epstein's death.{{sfn|Norman|1993|p=301}} Jacobs was found hanged in his garage on 15 December 1968.{{sfn|Brown|Gaines|1983|p=237}} Days before his death Jacobs had asked for police protection, telling a private detective, "I'm in terrible trouble, they're all after me," and going on to list six well-known showbusiness people.{{sfn|Ingham|2006|p=365}} Byrne retired to the Bahamas on his yacht,{{sfn|Norman|1993|p=347}} later moving to the [[Trowbridge]] area of Wiltshire.<ref name="ThisisBathByrneWanted">{{cite web|url=http://www.thisisbath.co.uk/news/Nicky-Byrne-wanted-help-new-book/article-504371-detail/article.html|title=Crime writer David Seabrook asking for help in contacting Byrne

At the time, very few managers of pop groups knew about the income music merchandising could generate, as very few artists survived long enough in the pop domain to be a viable investment. As far as Epstein was concerned it was merely good public relations, and any revenue that arose from the sale of Beatles-endorsed products was regarded as merely extra money that supplemented the Beatles' individual incomes from live performances and record sales.{{sfn|Granados|2002|p=3}} Epstein had not recognised an industry which had grossed $20 million for [[Elvis Presley]] in 1957 alone.{{sfn|Brown|Gaines|1983|p=112}} [[Alistair Taylor]] (Epstein's assistant) later admitted that financial mistakes were made: "We did our best; some people have said it wasn't good enough. That's easy to say with 20/20 hindsight but remember that there were no rules. We were making it up as we went along."<ref name="BeatleMoneyMerchandising"/>

In AmericaUnited States, Epstein had met the well-known divorce lawyer, Nat Weiss, whom Epstein later asked to take over the merchandising affairs of the Beatles and NEMS. Weiss would later state, "The reality is that the Beatles never saw a penny out of the merchandising&nbsp;... Tens of millions of dollars went down the drain because of the way the whole thing was mishandled. Even after the judgement was [[vacated]], you could smell the smoke from the ashes, that's how badly they had been burned."{{sfn|Spitz|2005|p=544}} Beatles' memorabilia, licensed by Seltaeb, is still sold at Beatles' conventions and on the internet.<ref name="BeatlebaySiteMap">{{cite web |url=http://www.beatlebay.com/site_map.htm |title=Site Map |publisher=Beatlebay |access-date=2008-08-08}}</ref>

*[https://books.google.com/books?id=cucbMgzt-bUC&pg=PA103&lpg=PA103&dq=%22Lord+Peregrine+Eliot%22&source=web&ots=2PqwffJD7m&sig=1mk9oNpG2idLdPaY3sB5P04c6ac&hl=en&sa=X&oi=book_result&resnum=4&ctpg=result#PPA104,M1PA104 John Lennon's Secret (book)]

[[Category:1963 establishments in New York (state)City]]