www.cmgworldwide.com celebrities: the past and the future

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CELEBRITIES: CELEBRITIES: The Past and the FutureThe Past and the Future

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Today, “Entertainment and Today, “Entertainment and Media” is America’s biggest Media” is America’s biggest industry. industry.

The core segments, (including The core segments, (including newspapers, book publishing, newspapers, book publishing, recording, music, periodicals, recording, music, periodicals, motion pictures, radio and motion pictures, radio and television broadcasting) account television broadcasting) account for an estimated 12% of the for an estimated 12% of the United States Gross Domestic United States Gross Domestic Product at $1.25 trillion dollars Product at $1.25 trillion dollars annually. annually.

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A Comparison of Value Added to the United States GDP by Sector in 2002

$698 billion $1,254 billion

$1,189 billion

Entertainment/Copyright

Total State and LocalGovernment

Federal Government

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A Comparison of the Top-Five United States Exports in 2002

$83.59 billion

$89.26 billion

$40.33 billion

$43.88 billion

$50.36 billion

Entertainment/Copyright

Chemical

Automotive

Aircraft

Food

And “Entertainment And “Entertainment and Media” is and Media” is America’s leading America’s leading export.export.

The industry achieved The industry achieved foreign sales and exports of foreign sales and exports of over $90 billion last year, over $90 billion last year, making it the United States’ making it the United States’ leading export.leading export.

Our Constitution has played a key role Our Constitution has played a key role in the creative development and the in the creative development and the industries that come about from the industries that come about from the fruits of intellectual property. fruits of intellectual property.

The framers included language The framers included language mandating the development of mandating the development of science science and the useful arts.and the useful arts.

This has encouraged creative This has encouraged creative development and lays the groundwork development and lays the groundwork for copyright, trademarks, and patentsfor copyright, trademarks, and patents—all forms of limited monopolies.—all forms of limited monopolies.


Hollywood’s Creation of Hollywood’s Creation of CelebritiesCelebrities

The motion picture industry is a The motion picture industry is a century old. century old.

Players who performed in early, silent Players who performed in early, silent motion pictures, were not given screen motion pictures, were not given screen credit and were not even identified by credit and were not even identified by name. name.

Audiences came to see "the picture Audiences came to see "the picture show," but not any particular show," but not any particular performers in the movie.performers in the movie.


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Silent Era films were NOT supposed to have “stars”

Her appearance in 1914's “Tess of the Storm Country” propelled her to stardom.

Pickford would go on to become Hollywood's biggest female star, earning the right to not only act in her own movies, but produce them and supervise their distribution.

She was also the first female actor to receive more than a $ 1 million per year (the first male actor who made a million-dollar deal was Charlie Chaplin, but not until several years later).


Hollywood’s First CelebrityHollywood’s First Celebrity

•Others came along and followed suit.Others came along and followed suit.

•Charlie Chaplin was one, and Douglas Fairbanks was another. Charlie Chaplin was one, and Douglas Fairbanks was another.

•Pickford married Fairbanks and together with Chaplin and D.W. Pickford married Fairbanks and together with Chaplin and D.W. Griffith they formed their own motion picture production Griffith they formed their own motion picture production company called United Artists. company called United Artists.

•In their wake came the likes of Clara Bow, Gary Cooper, Jean In their wake came the likes of Clara Bow, Gary Cooper, Jean Harlow, Humphrey Bogart, Marilyn Monroe, James Dean and Harlow, Humphrey Bogart, Marilyn Monroe, James Dean and the world has been star struck by Hollywood Royalty ever since.the world has been star struck by Hollywood Royalty ever since.


Mary Pickford opened the doors for others to be “Movie Stars”Mary Pickford opened the doors for others to be “Movie Stars”

mnagel

Thereafter the definition of a “Star” came to mean someone Thereafter the definition of a “Star” came to mean someone whose name appears on screen ahead of the film titlewhose name appears on screen ahead of the film title



Brands are part of our Everyday LifeBrands are part of our Everyday Life

These brands are easily recognized around the These brands are easily recognized around the world by their images alone. world by their images alone.

The common denominators behind all of these The common denominators behind all of these powerful brands:powerful brands:

• universal recognitionuniversal recognition

• a high level of brand equity or valuea high level of brand equity or value

• a clear and consistent presentationa clear and consistent presentation

• a specific set of feelings, emotions and a specific set of feelings, emotions and associations from the consumer population associations from the consumer population (i.e. (i.e. Coke – refreshing beverages, Disney– The most Coke – refreshing beverages, Disney– The most magical place on earth).magical place on earth).

• Often many years of success necessary to Often many years of success necessary to achieve this “high level of brand value”.achieve this “high level of brand value”.


Power Brands – 2005 Value & RatingPower Brands – 2005 Value & Rating

Company Brand Value Worldwide Rank

Coca-Cola $67.5 Billion 1 of 100

Microsoft $59.9 Billion 2 of 100

Disney $26.4 Billion 7 of 100

McDonald’s $26 Billion 8 of 100

Ford $13.1 Billion 22 of 100

Google $8.4 Billion 38 of 100

Apple $8 Billion 41 of 100

Starbucks $2.6 Billion 99 of 100

**Business Week “The Top 100 Brands” August, 2005


Celebrities have become powerful brands too…Celebrities have become powerful brands too…

They, too, can have universal recognitionThey, too, can have universal recognition

(Michael Jordan—2(Michael Jordan—2ndnd Most Recognized face in the world) Most Recognized face in the world)

They also have a high-level of They also have a high-level of brand equity or value…brand equity or value…

(Dale, Jr. accounts for 25% of (Dale, Jr. accounts for 25% of NASCAR licensing revenue)NASCAR licensing revenue)

Often times, celebrities evoke a specific and very Often times, celebrities evoke a specific and very strong set of feelings, emotions, or vivid strong set of feelings, emotions, or vivid associations from their adoring fans…which can associations from their adoring fans…which can result in very high level of sales. ….. result in very high level of sales. ….. Oprah was Oprah was ranked # 1 on the “Celebrity Power 100” in 2005ranked # 1 on the “Celebrity Power 100” in 2005


Case Study: Tiger Woods — The BrandCase Study: Tiger Woods — The Brand

• Good looking, clean-cut, articulate, and Good looking, clean-cut, articulate, and scandal free– A marketers dream!scandal free– A marketers dream!

• Ranked 5Ranked 5thth on the 2006 Forbes “Celebrity on the 2006 Forbes “Celebrity Power 100Power 100

•2005 Earnings were over $90 Million2005 Earnings were over $90 Million

• Blue chip deals with Nike, Buick, Accenture, Blue chip deals with Nike, Buick, Accenture, American Express, EA Sports, Golf Digest, Net American Express, EA Sports, Golf Digest, Net Jets, Tag Heuer, and Upper DeckJets, Tag Heuer, and Upper Deck

• Multi-year deal with Nike in 2000 was Multi-year deal with Nike in 2000 was reported to be over $105 Millionreported to be over $105 Million


Britney Spears — Suddenly a BrandBritney Spears — Suddenly a Brand

• Edgy, Fun, Beautiful Pop Music Star turned brand queen

• Has own company called “Britney Brands”

•Has done endorsements with Pepsi, Proactiv Solution, Got Milk!—to name a few

•The Britney Spears doll broke all records for an individual personality doll, selling six million units at $10 to $15 retail price.

•Her three fragrances Curious, Fantasy, and In Control are at the top of the marketplace

Even Deceased Celebrities are Brands Increasing in ValueEven Deceased Celebrities are Brands Increasing in Value

Marilyn Monroe

Elviswww.CMGWorldwide.com www.MarkRoesler.com

Top Earning Dead Celebrities According to ForbesTop Earning Dead Celebrities According to Forbes


Top-earning deceased celebrities for the year 2005Top-earning deceased celebrities for the year 2005

1. Elvis Presley1. Elvis Presley $45 million $45 million 2. Charles M. Schulz 2. Charles M. Schulz $35 million $35 million 3. John Lennon3. John Lennon $22 million $22 million 4. Andy Warhol4. Andy Warhol $16 million $16 million 5. Theodor Geisel (Dr. Seuss) 5. Theodor Geisel (Dr. Seuss) $10 million $10 million 6. Marlon Brando6. Marlon Brando $9 million $9 million 7. Marilyn Monroe7. Marilyn Monroe $8 million $8 million 8. J.R.R. Tolkien8. J.R.R. Tolkien $8 million $8 million 9. George Harrison9. George Harrison $7 million $7 million 10. Johnny Cash10. Johnny Cash $7 million $7 million

Millions


Source: Forbes.com

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Hits Entire Site (Successful) 113,684,408Average Per Day 404,570Home Page 1,219,756

Page Views Page Views (Impressions) 7,462,258Average Per Day 26,612Document Views 6,508,299

Visitor Sessions Visitor Sessions 3,387,637Average Per Day 12,055Average Visitor Session Length 00:09:42International Visitor Sessions 28. 05%Visitor Sessions of Unknown Origin 12.67%Visitor Sessions from United States 59.26%

Visitors Unique Visitors 1,457,184Visitors Who Visited Once 1,163,262Visitors Who Visited More Than Once 293,872

Report Range: 01/01/2004 - 12/31/2004

ChuckBerry.com Web Site Statistics

Domain Names have become their “new” & “personal” media outlets

Summary of Activity by Time Increment

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MarilynMonroe.com Web Site Statistics

Visitorsessions

Celebrities can use a variety of arrangements to maximize Celebrities can use a variety of arrangements to maximize their revenuetheir revenue


• license agreementslicense agreements

• master license agreements master license agreements

•complete sales of right of publicity or other intellectual property rightscomplete sales of right of publicity or other intellectual property rights

These forms include:These forms include:


Terms of a license agreementTerms of a license agreement

•License agreements can be structured in License agreements can be structured in a variety of different waysa variety of different ways

•Royalty rates and fees can vary greatly Royalty rates and fees can vary greatly dependent upon structuredependent upon structure

•Some of the factors involved with Some of the factors involved with outlining the terms of the license include: outlining the terms of the license include: Breadth of products, territory, distribution Breadth of products, territory, distribution restrictions, length of term, exclusivity restrictions, length of term, exclusivity versus non-exclusivityversus non-exclusivity


Master License AgreementMaster License Agreement

•Master licenses generally cover a broad Master licenses generally cover a broad range of licensing and merchandising rights in range of licensing and merchandising rights in relation to the Propertyrelation to the Property

•Master licenses usually are significant, Master licenses usually are significant, exclusive arrangements that typically give the exclusive arrangements that typically give the master licensee the right to sublicense.master licensee the right to sublicense. •Example: Jessica Simpson and Camuto Example: Jessica Simpson and Camuto Consulting GroupConsulting Group

• Master license is a worldwide Master license is a worldwide arrangement for most product categories arrangement for most product categories including apparel including apparel •Simpson was paid $15 million on the 10-Simpson was paid $15 million on the 10-year deal year deal


Outright SalesOutright Sales

• Outright sales of intellectual property Outright sales of intellectual property rights are now happening with celebritiesrights are now happening with celebrities

• Personality may sell all or part of their Personality may sell all or part of their intellectual property assetsintellectual property assets

• Recent transactions involve Elvis Recent transactions involve Elvis Presley, George Foreman & Muhammad Presley, George Foreman & Muhammad AliAli

How & Why Do You Value a CelebrityHow & Why Do You Value a Celebrity

It has become increasingly important and more common place to It has become increasingly important and more common place to perform valuations to assign a dollar value to a celebrity’s portfolio of perform valuations to assign a dollar value to a celebrity’s portfolio of Intangible intellectual property rights.Intangible intellectual property rights.

The need often arises in the following situations:The need often arises in the following situations:

•A Publicly Held Company whose image is closely associated with a A Publicly Held Company whose image is closely associated with a celebrity (i.e. The George Foreman Grill or Hugh Hefner’s contribution to celebrity (i.e. The George Foreman Grill or Hugh Hefner’s contribution to Playboy)Playboy)

•A Celebrity DivorceA Celebrity Divorce

•A transfer of the celebrity’s Intellectual Property RightsA transfer of the celebrity’s Intellectual Property Rights

• Litigation over unauthorized uses of a celebrity’s RightsLitigation over unauthorized uses of a celebrity’s Rights


•Only assets of significance that Mr. Simpson claimed to Only assets of significance that Mr. Simpson claimed to own where those IP rights associated with his name and own where those IP rights associated with his name and likenesslikeness

•Punitive damages therefore based on a present value of Punitive damages therefore based on a present value of those IP rights.those IP rights.

•Submitted report stated that Mr. Simpson had a value of Submitted report stated that Mr. Simpson had a value of $25 million at that time, which represents the exact amount $25 million at that time, which represents the exact amount that was awarded by the jury.that was awarded by the jury.

•In 2006, Fred Goldman asked the court to transfer In 2006, Fred Goldman asked the court to transfer Simpson’s “Right of Publicity” to Goldman in satisfaction of Simpson’s “Right of Publicity” to Goldman in satisfaction of the Judgement. the Judgement.


O.J. Simpson Civil SuitO.J. Simpson Civil Suit

• World Heavyweight Champ in 1973 and 1994World Heavyweight Champ in 1973 and 1994

•In 1994 Foreman teamed with Salton, a leading home In 1994 Foreman teamed with Salton, a leading home appliance companyappliance company

•Under the original deal, Foreman had a right to roughly Under the original deal, Foreman had a right to roughly 60% of the profits60% of the profits

•In 1999 Salton paid royalties to Foreman of $36 millionIn 1999 Salton paid royalties to Foreman of $36 million

•In 2001, Foreman sold all of his IP rights in the home In 2001, Foreman sold all of his IP rights in the home appliance category to Salton for $137.5 million.appliance category to Salton for $137.5 million.

• Salton wanted to make this arrangement so they would Salton wanted to make this arrangement so they would own this “brand” and never have to pay royalties again.own this “brand” and never have to pay royalties again.

The George Foreman GrillThe George Foreman Grill


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What Was Acquired:What Was Acquired:

* On February 7, 2005, CKX, a publicly traded company, * On February 7, 2005, CKX, a publicly traded company, acquired an 85% interest in the intellectual property rights acquired an 85% interest in the intellectual property rights owned by the Presley Estate. owned by the Presley Estate.

•The transaction included all copyrights owned by the The transaction included all copyrights owned by the estate, all the trademark rights, and all of the right of estate, all the trademark rights, and all of the right of publicity associated with Elvis.publicity associated with Elvis.

• The transaction also included the tour business, retail The transaction also included the tour business, retail operations and hotel operation at Graceland. operations and hotel operation at Graceland.

• The transaction did not include any artifacts of Presley, the The transaction did not include any artifacts of Presley, the Graceland Mansion itself or the real estate. Graceland Mansion itself or the real estate.


$100 Million Elvis Sale – Shows Value of Deceased celebrity$100 Million Elvis Sale – Shows Value of Deceased celebrity

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•Including the prepaid rent, the total value in cash & stock Including the prepaid rent, the total value in cash & stock for 85% of the assets sold by the Presley Estate was for 85% of the assets sold by the Presley Estate was $111.3 million, meaning that the total valuation for all of $111.3 million, meaning that the total valuation for all of those assets were $131 million.those assets were $131 million.

• In 2004, the year prior to the transaction, the Presley In 2004, the year prior to the transaction, the Presley Intellectual Property rights generated $13 million in revenue Intellectual Property rights generated $13 million in revenue while the Graceland tour operation, hotel operation and while the Graceland tour operation, hotel operation and other retail establishments grossed $28 million (but these other retail establishments grossed $28 million (but these were really break even business units).were really break even business units).

•The vast majority of the price paid in this transaction was The vast majority of the price paid in this transaction was for the intellectual property rights that were purchased. for the intellectual property rights that were purchased.


How The Presley Assets were ValuedHow The Presley Assets were Valued

•The latest sale of a celebrity’s Intellectual The latest sale of a celebrity’s Intellectual Property was in April of 2006 when CKX acquired Property was in April of 2006 when CKX acquired 80% interest in the IP rights owned by 80% interest in the IP rights owned by Muhammad Ali for $50 Million cash to AliMuhammad Ali for $50 Million cash to Ali

•In the 5 previous years, average gross revenue In the 5 previous years, average gross revenue was $5.5 million per year by Aliwas $5.5 million per year by Ali

•Since the $50 million was for 80% of the rights, Since the $50 million was for 80% of the rights, the total value would be $62 millionthe total value would be $62 million


Muhammad Ali scored one of his biggest wins with a $50 Muhammad Ali scored one of his biggest wins with a $50 Million Cash Sale of his Intellectual Property RightsMillion Cash Sale of his Intellectual Property Rights

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Diet Coke in 1994 was the first to digitize deceased personalities in a major advertising campaign to interact

with current personalities

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Volkswagen in a current TV ad demonstrates how life like and commonplace this technique

is

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It is now on at least a par

revenue wise to the Movie

Industry and is utilizing

deceased icons in creative

ways as we see here with

Marlon Brando

The Video Game Industry

Celebrities in the Emerging Telecommunication IndustryCelebrities in the Emerging Telecommunication Industry


•Mobile technology is one of the fastest growing categories in the licensing world

•Personalities, both living and deceased, are being used on everything from ring tones to screen savers.

• This license for mobile ring tones and wallpapers bring Marilyn back to life in a fun and light-hearted way to new generations of users that were almost all born AFTER she died.


New Movie Opportunies for Deceased Celebrities

•Laurence Olivier appeared in this major motion picture “Sky Captain” over 15 years after his death

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“If a Man can bridge the gap between life and death…..I mean live on after he has died….then he was a great man”

…… James Dean 1954

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www.cmgworldwide.com celebrities: the past and the future

Documents

celebrity slide

high level of brand

high level of brand

motion picture industry

high level of sales

powerful brands

power brands

charlie chaplin