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A Dead Head For Business

Despite the Loss of Its Guiding Light, the Band's Long, Strange Trip Lives On Through Festivals and Merchandising


The parking lot scene at Irvine Meadows Amphitheatre earlier this month had all the sights, sounds and smells of a Grateful Dead concert: sweaty vendors hawking tie-dyed T-shirts, patchouli-scented waifs begging for free tickets, veggie burritos sizzling on a portable gas grill.

The only thing missing was the Grateful Dead, the improbable music industry success that called it quits after the Aug. 9, 1995, death of Jerry Garcia, the band's spiritual and musical soul.

Furthur Festival, the Dead-influenced alternative music tour that touched down in Irvine with former Dead players Bob Weir and Mickey Hart as headliners, undoubtedly gave Deadheads--devoted fans of the Dead--a welcome sense of deja vu. But the six-week concert tour also underscored challenges facing an unlikely business empire that the rock band stitched together during three decades on the road.

When rock bands break up, individual members typically scamper off to pursue their own pet projects--or simply wait for the royalty checks.

But Dead Inc. finds itself at an interesting business crossroads: It's lost a founder and creative light, and its lucrative days on the road are over. Now the ancillary businesses--most notably a cutting-edge merchandising arm that's licensing everything from a Dead Red table wine to pricey Garcia-designed neckties--are scrambling to stay successful.

T-shirts and other memorabilia were always secondary to the live concerts that defined the Dead. For nearly a decade, the Bay Area band was one of the nation's most successful and profitable live concert acts, regularly generating between $30 million and $50 million in annual ticket revenue.

Now the focus is on the product-licensing business that's ringing up tens of millions of dollars in retail sales through thousands of record stores and shops around the country.

How long can you market images of a band that no longer exists?

"The fact is that Grateful Dead has become recognized as something far broader than a rock band," said Peter McQuaid, a merchandising professional who was hired by the band four years ago. "The trademarks have become associated with, or symbolize, a lifestyle or counterculture that will continue to go on without the concert tours."

Garcia's death forced an immediate rethinking of how the thriving business was organized.

Employment at Novato, Calif.-based Grateful Dead Productions tumbled from about 60 in mid-1995 to about 35 as the company spun off a unique ticketing agency, trimmed employment at a recording studio and laid off employees whose jobs disappeared when the touring ended.

"It's been a very painful process," said Cameron Sears, a former environmental group organizer who joined the privately held production company as president in 1990. "These people were our friends; they were people who worked for the band for 25 to 30 years.

"But the handwriting was on the wall," Sears said. "The automobile factory wasn't making cars anymore. We made every effort to find holes elsewhere that could be filled with our people, even temporarily. And our severance package went beyond what most companies would have offered."

The band's decision to call it quits also caused economic pain for longtime contractors who had supported the Dead on the road. During a typical tour, the Dead created as many as 90 high-paying jobs for sound, lighting, security, catering and transportation companies.

"After Jerry died, there was a repercussion or ripple effect in San Rafael [Calif.]," said Jacky Sarti, business manager of Ultra Sound, which, along with the ticketing operation, is headquartered there. "When you look at all the companies that worked on the tours . . . there was quite a bit of money that wasn't being spent in stores."

Dennis McNally, the band's longtime publicist, said the downsizing of the company was painful for band members because "nobody ever left this place, and you really had to screw up bad to get fired. These people were friends, family. We watched each other's kids grow up."


To truly understand the Grateful Dead, one needs to look beyond the acid-tinged parking lot scene and concentrate on the numbers.

During nearly 30 years of touring, band members performed 36,086 songs during 2,317 concerts in 298 cities scattered around the world. During the band's last five years on the road, Deadheads forked over $225 million for tickets--including an astounding $34 million in the six months before Garcia died.

The business side of the band continues to pioneer the potentially lucrative market for licensed memorabilia: It recently broke onto the national retail scene with boutiques in 260 Best Buy stores.

The Dead also sold more than 20 million records--not counting the thousands of bootleg tapes resulting from the band's seemingly off-the-wall practice of encouraging fans to tape their concerts.

The band's easygoing image also overshadowed the fact that its technical crews were among the nation's finest.

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