CPA Tim Jorstad relishes money almost as much as he loves Jerry Garcia and Bob Weir of the Grateful Dead, Carlos Santana, Journey and the Doobie Brothers. He helped dozens of musicians make fortunes in an industry known for ripping off artists whose creative juice generates fountains of revenue.

San Rafael-based Jorstad, 65, was brilliant at managing musicians’ money and the business side of their art. On Father’s Day last weekend, plenty of Bay Area musicians had occasion to hail Jorstad as a papa of music who helped turn tunes into serious dough.

For bands such as the Grateful Dead, known for songs such as “Truckin’,” “Touch of Grey” and “Ripple,” revenue gushed in at a torrent. Jorstad renegotiated contracts, lined up gigs and managed deals with venues and numerous contractors that touring groups need to keep the show and money rolling.


Jorstad got his start in the music business when he bought a 50 percent stake in Russell Mustola’s one-person CPA firm located in Sausalito. Mustola had Journey as his client as well as Jefferson Airplane, later known as Jefferson Starship and for the song “We Built This City,” a San Francisco tune whose video has garnered 28 million YouTube views.

Journey had its best years in the decade after 1978, such as the 1981 single “Don’t Stop Believin’,” which was certified platinum (1 million in sales) five times over. The band started in 1973 in San Francisco with former members of Santana and Frumious Bandersnatch. Steve Perry was lead singer with Neal Schon on guitar. Jonathan Cain played keyboards.

Journey still tours, with dates booked through next month. The band was inducted into the Rock and Roll Hall of Fame in April of this year. Arnel Pineda, whose vocal qualities resemble Perry’s, has worked as lead singer since 2007.

Perry spoke at the induction ceremony.

“There was one instrument that was flying above the entire city of Los Angeles,” Perry said. “That was the magic fingers of Neal Schon’s guitar.”

Jorstad said he knew nothing about the business of music when he bought into Mustola’s firm. Mustola was one of Jorstad’s supervisors from Main Hurdman, an accounting firm he worked for in San Francisco.


Journey was pulling in worldwide revenue of more than $100 million a year, according to Jorstad. The band released an album almost every year.

They would sell out Pasadena’s Rose Bowl stadium, which has 92,542 seats.

“That payday was $1 million in 1982 dollars,” Jorstad said. That’s about $2.5 million today.

Journey pioneered live video projection and in 1981 started a separate company called Nocturne Productions, now PRG Nocturne Productions, after 2011 acquisition by Production Resource Group.

“It is still the Tiffany of concert video projection in the music world,” Jorstad said. “We would make stadiums more intimate.”


Band manager Herbie Herbert and Jorstad hit it off. They sought to shift more money to musicians.

“Most artists didn’t and still don’t understand the food chain of where the money comes from, who gets paid, how much should be left over for them,” Jorstad said.

Live concerts used to guarantee a flat amount. Jorstad established a financial arrangement that provided a percentage of gross revenue or net income, whichever is greater.

“You keep your guarantee,” he said. “We’re so confident we can sell tickets.”

Another stream of revenue came from tour merchandising, novel at the time.

He renegotiated the fee a concert hall could charge: “What we paid for product, what was left over for our members,” he said. “That is still being used today.”

He reexamined licensing deals.

“Artists were taken advantage of,” he said. “Deals in the ’60s were terrible for artists, absolutely terrible.”

Record-distribution deals were heavily skewed to favor record companies.

“As we got more negotiating clout via selling millions and millions of records, we would renegotiate our deal every so often — increase our share,” he said.

On a $1 million concert, some bands would not even earn $50,000.

“They take whatever the booking agent says they can get. We all used booking agents — CAA (Creative Artists Agency), Paradigm (Talent Agency) or William Morris.”

To boost a band’s income, its manager needs to negotiate hard.

“If you leave it up to the booking agent,” the amount will be lower, Jorstad said.

Journey did its own management with Herbert and Jorstad in command.

“They did all their booking, and paid a 5 percent booking fee,” Jorstad said.

That’s half of what is typically charged for a large band. The band would create detailed contracts for every venue, with all expenses itemized and capped, that could be applied against gross revenue. For each show, the pair would seek to better the band’s previous deal.

“They were making so much money,” Jorstad said. “Journey was the highest-paid band in the early 1980s, considered a corporate band, but run extremely well” as one of the bestselling touring and recording bands worldwide. In a typical year, band members would easily net $50 million.

“We would ship albums sometimes 10 million at a whack,” he said.


In 1987, the Grateful Dead took off.

“They started selling every ticket they were printing,” Jorstad said. "They blew up," with stadium performances quickly outrunning Journey.

The band, which had an office nearby in San Rafael, needed a business manager. Jorstad went to meet the band. Lead singer Jerry Garcia lived in several places in Marin County, such as one place near Lucas Valley Road and another in Mill Valley, “depending on who he was with at the time,” Jorstad said.

“They were having their band pow-wow,” he said, chuckling. “They were very awkward about the money end of it. They knew they needed somebody who had experience with large money and international issues. They hired me,” he said.

“Grateful Dead was a major home run,” Jorstad said. “They were the largest independent record company with their own music releases.”

In a typical year, The Grateful Dead had revenue easily exceeding half a billion dollars. “There was a lot of money made,” Jorstad said.


In 1994, Carlos Santana came to Jorstad. His 1970 album “Abraxas,” with the hit “Black Magic Woman,” has been certified platinum five times over, according to Recording Industry Association of America.

“He wanted to self-manage. He was done paying somebody 20 percent,” said Jorstad, who worked typically for hourly fees. Band business managers usually took 5 percent.

“When bands aren’t making very much, 5 percent of their gross is very little,” he said. “Then when they blow up, 5 percent looks like a big number. Everybody is going, gee, are they really worth that? I never wanted to have that conversation — grossing $100 million a year and paying $5 million a year. Is that fair? We made a very good living on our hourly.”

That gave Jorstad an incentive to work.


Music revenue “keeps a lot of mouths fed along the way,” Jorstad said. That includes hall fees, booking agents (5 percent–10 percent), management (15 percent), business manager (5 percent), attorneys (5 percent), and sales and excise taxes.

“You finally get down to a number that the band gets to cover its overhead,” he said.

That’s roughly 25 percent of a concert’s gross revenue.

Then come band expenses — staff, sound, lights — before musicians earn a penny. Jorstad wanted band members to take 40 percent of the total the band received. In effect, artists got about 10 percent of overall gross — 40 percent of 25 percent.

“It’s easy to lose track of the engine — artists,” Jorstad said. “For most artists, money was never the goal. It was a byproduct of doing what they wanted to do. Money complicates and can really screw up their lives.”


When income flowed easily, musicians often would “elevate their lifestyle,” Jorstad said. To sustain that, they may compromise artistic integrity by commercializing music.

“The whole Grateful Dead beast drove Jerry crazy,” Jorstad said, “in terms of him having to work to keep everybody fed.” Garcia became de facto CEO. “Coming up with brand new, high-quality music on a timeline really doesn’t set well with them,” he said of musicians.


Touring is tough on artists. “I have ridden the tour bus,” Jorstad said.

In 2009, he put together the Dead tour, negotiating with Live Nation nearly two dozen concerts in six months.

“I brought the four (original) band members together, took them on the road,” he said, (Bob Weir, Phil Lesh, Bill Kreutzmann and Mickey Hart), plus Jimmy Herring, Jeff Chimenti and Warren Haynes.

Jorstad joined the band when they visited President Obama in the White House Oval Office.

“I don’t think he understood Grateful Dead culture,” Jorstad said of Obama.

“You sit up with these guys until 3 in the morning,” Jorstad said. “They’re not tired. But if I’m not hanging around them, they’re going to misbehave. Not all of them. Fans come around. I was" like their dad, Jorstad said, even musicians near his age; he is 65.

“Some are much more receptive to guidance than others,” he said. “Some of it is substance abuse, where they make poor decisions.”

"It's a job," he said of tour management. “At one point I had to sit them down and say, you’re not giving fans a quality show."

Musicians were tired, out of practice. “We rehearsed 11 days, a set list of 125 songs,” he said. “That was an eye-opener to go on the road and ride buses with them, not a healthy environment.”

Total 2009 tour revenue was about $300 million, with $30 million for the band’s share, according to Jorstad.

“That was a tour to refill their coffers,” he said.


Jorstad spends more of his work time on music business than anything else because he loves it.

“I am their CFO,” he said of musicians. “I run a lot of their business. We receive all their money in this office, pay all their bills, negotiate production and merchandising deals, oversee record contracts and compliance, audits, licensing.”

Of bands he has worked with, Jorstad’s favorite is still Journey, where he started.

“Grateful Dead was almost contrarian,” he said. “They wanted to do things opposite of how a normal business runs — just because they could.”

“The man I admire the most is Carlos Santana — respect he has for people around him,” Jorstad said. “He is a soulful man."


“John Lee Hooker was a very sweet man who came up through the deep South, Mississippi,” Jorstad said. Hooker died in 2001. “He couldn’t write, his name signed with an X. He had been taken advantage of, horror stories a musician can go through, he was able to survive. Santana sent me to John Lee, (who) looked at me and said, you’re really white to be dealing with a dude like me. I said, well, I’m good with green. He said, I like green.”

Early music contracts provided that the publisher, part of the record company, would own the copyright in perpetuity.

“We are getting some copyrights back,” Jorstad said, as they began expiring in 2013. “Master recording copyright reverts back to the recording artist, not the producer, not the manager. That’s a big, big thing going on in the business now. We send cease-and-desist” letters to curb improper use.

Hillary Clinton used “Don’t Stop Believin’,” he said. “I called. The band was supportive, but (she) should ask for permission.”

During the World Series, the Giants were “using it like crazy,” he said. “We love the Giants, but I made them pay a license fee.”

For three years he represented the estate of Jerry Garcia to defend music rights.


Beyond monitoring royalty payments, he negotiates digital use and distribution.

“Sometimes the contract is convoluted,” Jorstad said. “We clean it up so we can audit.”

He may stay with major labels for distribution, but gets a percent of gross revenue, “close to the top of the food chain.”

Many clients would get behind on income taxes if he didn’t manage that part of their money. For band tours, state income-tax returns had to be filed for every state in which concerts took place.

“Returns are 3 feet tall,” he said. “Canada, there’s a big tax. And England, Europe, Australia, New Zealand.”

Tax savvy was “critical to keep Journey,” he said, and take on the Grateful Dead, Santana and Doobie Brothers.


The music industry is shifting. “Music sales dropped off precipitously,” Jorstad said. “The pie has shrunk dramatically. Downloads are falling off. It’s about streaming — not tangible product. We’re making money with licensing for commercials and film.”

An artist with a long career will have “three or four fortunes,” Jorstad said. “The first goes to youth, the second to divorce or drug use. The third — maybe they get to hang onto that one. There’s no guarantee you get to keep the money you earn.”

James Dunn covers technology, biotech, law, the food industry, and banking and finance. Reach him at james.dunn@busjrnl.com or 707-521-4257