Right now I'd like to take a little bit of time considering why it is that Sam
Phillips of Sun Records would of sold Elvis's contract the way he did to RCA.
You would think, I would, I would think not knowing if I, if I didn't know how
the, the business work. That you know if you have a singer like
Elvis Presley, and he's just starting to rise in the charts and heard of becoming
a big star. Why would you want to sell that person's
contract to another label when maybe if you became a star, you could make all
that money, and grow your own company, right?
Well it's, it's kind of ironic that the way things work for the independent label
actually is at, at that time actually punished too great of a success and
here's why. If you have a record that really starts
to take off. You have to pay, in order to make as many
copies as you want to be able to sell. You have to pay to have all those records
pressed, and all the sleeves printed, and all of it assembled and shipped out.
You have to pay all that money up front. The record store people, or whoever else,
the jukebox people, or wherever, they're not going to pay you for those records
until sometimes months later. So, if you're a small independent label
and you've only got so much capital to work with.
And you put out all this capital to get these records out there.
Those records could be selling like hot cakes, but it doesn't do you any good,
because you're not going to see that money, maybe for six weeks eight weeks.
In the meantime, you're really kind of frozen out, I mean there's, unless you've
got tons and tons of money at your disposal, which is not the definition of
an independent label, right. You're kind of, kind of frozen out and
its, its, it actually ruin a big record like that could, could back in those days
is ruin an independent label, because of the time lag between the money that they
put out there. So it's ironic they would be going under,
just at about the time they were having their biggest possible success.
By the time the money comes into them it's too late they, they haven't had
enough money to sustain the business during that period.
And so, what Sam Phillips decided to do in the case of Elvis is, Elvis's contract
was coming up for renewal anyway, and there's no guarantee that Elvis would
have resigned it. And this is a little bit like talking
about athletics these days or sports, professional sports.
So, while Elvis's contract was still worth something he sold it to RCA, but he
wasn't even sure he wanted to sell it at that point.
The way he tells the story, he says that he offered them, he made an offer to them
when he offered $35,000. He thought they would never take it in a
million years. It was like a way of telling them to go
away, setting the price so high that they just wouldn't take it.
But to his surprise, they took it, and when it, when the money was actually, was
actually that much money in the deal, he had to think, well should I grab this,
you know, a bird in the hand versus two in the bush.
Should I grab this now? Take this money and use it to reinvest in
the company and other artists. He had other people coming along at Sun
Records, we'll talk about in the next lecture.
People like Johnny Cash and Roy Orbison and Jerry Lee Lewis and Carl Perkins.
Maybe he thought that he would take that money and would reinvest in his business,
and he would grow the entire thing, even if he lost Elvis.
and so, that's one reason or at least a couple of reasons why Sam Phillips would
have sold Elvis's contract as he did.