Celebrating the business of the Grateful Dead this July 4th: Morning Brief

As we roll into the high summer season millions of us will be going to concerts.

For a good many that means taking in a Grateful Dead show.

As it turns out there are some salient business connections — some fascinating and others more obscure — to the Dead.

The current incarnation of the Grateful Dead today is Dead & Co, as a number of its original members have either passed away or no longer play with the band. Filling in for the late Jerry Garcia—who passed away in 1995—is guitar virtuoso and heartthrob, John Mayer. (Note to Deadheads: I’m no expert here—though I’m a big fan and did see them in Baltimore, March ‘73.)

The Grateful Dead, in all its iterations, have become a huge business over the years.

The original Dead sold $393 million in tickets alone from 1965 to 1995, according to the Grateful Seconds blog (put out by my pal and banker, Dave Davis). In 2020 Variety reported: “The band grossed $250 million in the past five years, averaging a box office of $2.3 million per concert…”

With 20 shows this summer, Dead & Co. will likely make tens of millions this year, too. And this doesn’t include merchandising and music sales which bring in many hundreds of millions more.

“The Grateful Dead is much more than buying a ticket or buying a t-shirt,” says Joe Jupille, professor of political science at the University of Colorado and an amateur Grateful Dead historian. “They built community.”

The Grateful Dead play their final concert in front of over 70,000 fans at Soldiers Field. The legendary band ended with a five show tour billed as “Fare Thee Well: Celebrating 50 Years of the Grateful Dead.” (Photo by Brooks Kraft LLC/Corbis via Getty Images)

Though the Dead were known as the ultimate counter-culture band, its ties to Silicon Valley run deep.

Founded in Palo Alto in 1965, the Dead’s first shows were in Menlo Park and San Jose. In February 1966 a show was co-produced by Stewart Brand, who became a highly influential tech visionary. The Dead, then, are a local cultural piece which meet at the intersection of art and science Steve Jobs famously articulated.

Flash-forward 30 years to Garcia’s death. “Losing Jerry Garcia was more than losing a singer and a guitar player,” says Joel Selvin, Author of “Fare Thee Well: The Final Chapter of the Grateful Dead’s Long, Strange Trip.”

“Garcia was the brains, the heart and the public face of the band,” Selvin says. “He was the hub of all the other musicians.”

“When Jerry died, the economic engine of the tour went away, leaving 60 people without touring income. They needed a new plan,” says high-profile tech investor and Deadhead Roger McNamee, who advised the band during those years.

UNSPECIFIED - CIRCA 1970:  Photo of Jerry Garcia  Photo by Michael Ochs Archives/Getty Images

Photo of Jerry Garcia (Photo by Michael Ochs Archives/Getty Images)

The Dead sought financial advice and had conversations with a number of bankers and advisors including, at one point, Houlihan Lokey. An informed source says even then-banker Steve Bannon made a pitch. (Another informed source doesn’t recall Bannon.)

In one set of discussions, $65 million was bandied about as the amount of money the band needed to raise to build out the digitization and sales efforts of its so-called Vault — the tape collection of its shows — plus the building of a Terrapin Station. According to the business plan, this would be a “a 65-70,000 square foot facility located in the heart of San Francisco…projected to draw almost a million visitors annually. In addition to entertainment, it will have a museum, library, merchandise store, restaurant, record store and research center.”

Another document mentions conversations with the likes of Silicon Valley venture capital firms like Accel, Sequoia, and Kleiner Perkins. There was also a proposal to create a company called Deadweb which would IPO with a valuation of $480 million. The exact sequence and details of some events are not crystal clear, but the bottom line is that along the way, the band turned specifically to McNamee for help.

“Roger McNamee, who, at the height of his Internet success, volunteered one day a week,” says Selvin. “We cannot measure the value of volunteering to go to the Grateful Dead’s office and try to straighten out the mess that was their web strategy. He put together a possibility of both software and deals with other bands like U2, Dylan and Dave Matthews bands, that if the Dead had gone through that would have been iTunes.”

Lisbon , Portugal - 3 November 2021; Roger McNamee, Founding Partner of Elevation Partners, on Centre Stage during day two of Web Summit 2021 at the Altice Arena in Lisbon, Portugal. (Photo By Stephen McCarthy/Sportsfile for Web Summit via Getty Images)

Roger McNamee, Founding Partner of Elevation Partners, on Centre Stage during day two of Web Summit 2021 at the Altice Arena in Lisbon, Portugal. (Photo By Stephen McCarthy/Sportsfile for Web Summit via Getty Images)

In late 1999 MTV News reported that, “The band has been approached by numerous high-tech firms, including Microsoft, with unsolicited offers of capital for the project, but until recently the remaining members shunned all suitors.” MTV quoted band spokesperson, Dennis McNally, as saying: “The board feels that these venture capitalists are in sympathy with Grateful Dead ideals. They trust them.”

Not all the band members, though. In late 1999, Dead basest Phil Lesh put out a statement: “The Grateful Dead have never accepted corporate sponsorship or venture-capital money, and I remain unalterably opposed to any deal that would lease, license or otherwise collateralize the music in the Vault.”

Other band members responded: “There has never been — nor will there ever be — any discussion of selling our Vault, our music, our name, our legacy. Not to Microsoft. Not to anyone.”

Not surprisingly, all the dealmaking came to naught. In a 2006 Lesh-driven deal, the Vault was licensed to Rhino records, a division of Warner Music. And after a number of musical fits and starts, including the band’s 50th anniversary Fare Thee Well concerts in 2015 — the last time all of the surviving members of the Grateful Dead played together — the remaining members formed Dead & Co. and were off to the races again.

“Fare Thee Well was a beautiful thing, an encore for Phil and the beginning of something new for the rest of the band. It all worked out for everyone in the end,” says McNamee.

As for Jerry Garcia, he has become and remains the stuff of legend.

In early 2010, when I was editor of Fortune Magazine, Steve Jobs visited to demo the iPad.

One of the features he showed us was that the device played music. Jobs pressed an icon and it began playing “Friend of the Devil.”

“I love the Dead,” I blurted out to Jobs.

“So do I,” Jobs nodded.

On this weekend where we celebrate America, we could do a lot worse than to remember Steve Jobs—and the Grateful Dead.

This article was featured in a Saturday edition of the Morning Brief on May 14, 2022. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

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