(Forbes) The Times Square headquarters of Authentic Brands is a very glamorous graveyard. A black-and-white photo of Marilyn Monroe hangs above the front desk.
On a wall opposite, Elvis Presley sings and signs autographs in an endlessly looping video. Nearby, a pair of Muhammad Ali’s gilded boxing gloves glimmer alongside red-and-black Michael Jackson “Thriller” socks.
Marilyn, Elvis, Ali, Michael: They’re four of the world’s top-earning dead celebrities, pulling in a combined $509 million last year. And their estates are all represented, in full or in part, by Authentic Brands Group, the creation of Jamie Salter.
“There’s not a lot of the estates in this sort of icon business exploiting these assets correctly,” says Salter, 55. Most are owned by family members who can’t all agree or who have little business experience.
“They live off the music or off certain parts of the assets. They’re not building them into long-term brands. I think it’s not that they wouldn’t. They just don’t know how.”
No one better knows how to take a dead brand and revive it than Salter. He first did this with decayed old brands like Airwalk shoes—and then moved onto doing it with celebrities. In all, Authentic Brands does an estimated $400 million in revenue.
For Marilyn Monroe, Salter purchased 80% of the Monroe estate in 2012 for a reported $20 million to $30 million before slashing its 300 licensing deals—from T-shirts to refrigerator magnets—down to 80. Then he built the business back up, purchasing the other 20% of the estate and increasing the number of licenses to the sweet spot of 100, focusing on venerable brands that Monroe actually used in life—like Chanel No. 5.
“You can sell X amount of Marilyn Monroe fragrance at a mass-market retailer, or you can do a deal with Chanel No. 5,” Salter says.
“A No. 5 deal doesn’t pay as well, but I think that’s important for the brand because it gives a halo effect. And the truth of the matter is, she wore Chanel No. 5.”
Salter got his start during the 1980s, driving store-to-store to sell windsurfing equipment. Next he bought a snowboard business for $35,000, selling it for $5 million four years later.
Then he started his own, Ride Snowboards, and took it public in 1993. As Nike sniffed around, the company’s market cap soared to $450 million, but it plummeted when the sporting giant walked away.
Marilyn, Elvis, Ali, Michael: They’re four of the world’s top-earning dead celebrities, pulling in a combined $509 million last year.
He shifted to licensing, cofounding Lifestyle Brands, which bought and licensed dormant names like Airwalk. When Payless Shoe Source bought his company for $85 million, Salter decided to double down, teaming up with liquidation specialist Jeff Hecktman to run Hilco Consumer Capital. They spent $220 million over four years, buying brands like Polaroid, Sharper Image and Linens ‘N Things out of bankruptcy and licensing them out.
In 2010, Salter left Hilco and put up $20 million of his own to launch Authentic Brands, raising a war chest of $250 million mostly from private equity firm Leonard Green & Partners. Other investors include General Atlantic and billionaires such as the Walton family and George Soros. Salter still owns 12% of the company, forming a controlling 51% stake with Leonard Green.
“We had a view that there was a demand out there for acquisitions for intellectual property, broadly defined,” says Jonathan Seiffer, a senior partner at Leonard Green. “That could be everything from traditional consumer brands to celebrity name, image, likeness and their rights.”
One of Salter’s first experiences in the world of the dead and famous came with the estate of Bob Marley, but the large number of family members involved—there are around a dozen members of the artist’s clan—made decision-making tricky. When Salter tried to buy the estate outright, he was rebuffed.
He also went after the Marilyn Monroe business and received a no. But eventually Anna Strasberg, the widow of Monroe’s acting coach Lee Strasberg (to whom she’d left her estate), came back and agreed to a deal to sell 80%. (And three years after Salter bought into Monroe, Strasberg sold him the rest of the business.)
Elvis was next. Salter bought the bulk of the Elvis Presley business, including part of Graceland, for $150 million in 2015. In the same deal, he acquired rights to the Muhammad Ali brand, sold by the boxer’s family years before his death to the company that had previously controlled Presley’s.
Meanwhile, Monroe’s business became so successful in the years following Salter’s arrival that he ended up paying the same amount for the last 20% than he had for the first 80%. He wouldn’t reveal precise numbers, but industry insiders were nevertheless impressed.
"There’s not a lot of the estates in this sort of icon business exploiting these assets correctly."
“We started to get approached a lot by people—either agents or celebrities—about, ‘Well, we’ve watched what you’ve done with Marilyn, Elvis and Muhammad. Would you partner with me to do the same thing?’” Seiffer says. “Then we realized we had a real platform in that space and had brands that were really relevant and timeless.”
Lately, Salter has been applying the blueprint to living celebrities. He came to an agreement with Shaquille O’Neal that made them equal partners on the Shaq brand and gave the NBA Hall of Famer a slice of Authentic Brands equity surpassed only by Salter’s. Terms weren’t released, but according to Salter, Shaq’s business and the value of his Authentic Brands stake have both grown by a factor of three.