. . . And the Wind Cries Money : Jimi Hendrix rivals Elvis Presley, John Lennon and Jim Morrison for posthumous profitability.

On the day he died, Jimi Hendrix was at the peak of his career--and deep in debt.

The 27-year-old rocker was one of the most successful artists of the ‘60s psychedelic era. He had recorded five top-selling albums and was one of the highest-paid concert performers of his day ($125,000 per show). But he owed tens of thousands of dollars to his record company and was the target of numerous lawsuits, ranging from management contract disputes to a paternity suit.

After his death, a series of bad investments and bitter litigation battles nearly drove his estate into bankruptcy.

But in the last decade, the Hendrix legacy has witnessed a dramatic turnaround. Twenty years after his demise, the acclaimed guitarist actually makes more money dead than he did alive.

Unlike other prominent figures of the psychedelic generation, Hendrix has little difficulty competing in today’s video-heavy, high-tech market. Only three other deceased stars in the history of rock--Elvis Presley, John Lennon and Jim Morrison--rival his marketability.

The combination of record sales, the merchandising of Hendrix’s likeness and song publishing is a multimillion-dollar enterprise--though the exact figures are tightly guarded. In 1988, Forbes magazine estimated the gross annual income from the guitarist’s music publishing and record royalties at $4 million, but the guardians of his fortune dismiss the figure as “an inaccurate guess.”

Those promoting the Hendrix legacy predict that he will sell between 2 and 3 million records internationally this year. Merchandisers estimate that they will sell more than $1 million worth of garments, posters and paraphernalia bearing his name and likeness in 1990. Ten books about his life are also being prepared for publication--and that’s just the tip of the iceberg.

In commemoration of the 20th anniversary of his passing on Sept. 18, 1970, the National Film Theatre in London is scheduled to premiere a film Tuesday of Hendrix’s last major concert at the Isle of Wight Festival.

In November, Warner Bros. Records will release “Lifelines,” a biographical four-CD set featuring interviews, studio outtakes and home demo and concert tapes culled from a 1988 Westwood One radio show. The collection also includes a previously unreleased concert recording from a 1970 show at the Forum in Inglewood.

Alan Douglas, who owns and operates Are You Experienced?, Ltd., the Hollywood-based company in charge of merchandising official Hendrix music and memorabilia, insists the appetite for Hendrix material these days is insatiable.

“Hendrix is going on his third generation of fans,” Douglas said. “Nobody has to update or manufacture some aura of mystique to sell Jimi. All we have to do is release new evidence of his greatness every once in a while. The music speaks for itself.”

Douglas, who first worked with Hendrix in 1969 and was hired by his estate to produce posthumous releases in 1974, estimates that 75% of Hendrix’s current audience is between 12 and 20 years of age. The 59-year-old producer thinks the reason Hendrix’s music holds up is because the rock star was so far ahead of his time.

“He’s still the reference point by which great artists judge relevant electric guitar music,” Douglas said. “No instrumentalist has yet to create anything which makes his contribution sound obsolete.”

Hendrix’s original five Reprise albums have all surpassed the 3-million mark, and sales are on the rise. According to Bob Merlis, vice president of national publicity at Warner Bros., the Hendrix catalogue currently generates sales of between 500,000 and 1 million copies a year.

“Item for item,” Merlis said, “Jimi Hendrix’s catalogue is probably the strongest in the business.”

Three years ago, Los Angeles-based Rykodisc released a super-clean CD remix of an October, 1968 concert titled “Live at Winterland,” which sold 200,000 copies in 1987. The sound quality of the Rykodisc recording and the corresponding consumer response inspired Warner Bros. to reissue nine digitally remastered Hendrix albums last year.

The collection includes “Smash Hits,” a best-of compilation first released in 1969 containing such classics as “Foxy Lady” and “ Purple Haze.” It comes with a new high-tech graphics track that allows fans who own a JVC CD-plus-graphics unit to view synchronized psychedelic imagery while listening.

PolyGram Records, the company responsible for distributing Hendrix’s music overseas, has plans to release an updated series of Hendrix reissues, employing a new mastering technique developed by engineer Joe Gastwert that reportedly will improve the CD sound quality.

“Lifelines,” the upcoming four-CD box set on Warner Bros., is but the first in a series of annual box sets Are You Experienced?, Ltd., intends to deliver. Douglas’ engineering crew is currently wading through hundreds of hours of unreleased club and concert master recordings for future compilations.

While more than 400 bootleg records have also appeared on the market, the legitimate Hendrix catalogue continues to draw praise from many industry observers. Former Doors keyboardist Ray Manzarek said he believed Douglas’ handling of the Hendrix legacy is right on the money.

“Marketing Hendrix as a hero isn’t just a bunch of hype,” Manzarek said. “His guitar playing tapped into the collective unconscious in exactly the same way Jim Morrison’s lyrics did. The reason so many people still revere him as a genius is because he actually was one.”

James Marshall Hendrix, born in Seattle on Nov. 27, 1942, redefined the sound of the electric guitar with his first album, “Are You Experienced?” in 1967.

Before bursting onto the pop scene he worked the “chitlin’ circuit” as a sideman. Between 1963 and 1965, he toured with and/or played sessions for many R&B; stars, including King Curtis, Ike and Tina Turner, the Isley Brothers, Jackie Wilson, James Brown, Solomon Burke and Little Richard.

Hendrix moved to England when he was 23 and began pioneering new musical genres like metal and fusion before they even had names. Within a year of linking up with bassist Noel Redding and drummer Mitch Mitchell to form the Jimi Hendrix Experience, he was cutting gold albums and selling out international tours.

After the integrated power trio folded in 1969, Hendrix created the Band of Gypsies with black musicians Buddy Miles (drums) and Billy Cox (bass), recorded an album with the group and began to publicly support the political struggle of blacks, American Indians and Vietnam veterans.

Hendrix, a New York resident, died on Sept. 18, 1970, as a result of inhalation of vomit due to barbiturate intoxication. He left no will.

Besides a sports car and some musical equipment, he had few personal possessions. Before his funeral, his New York apartment was burglarized. Everything he owned--including his clothes, music manuscripts and home demo and studio master tapes--was stolen.

“Jimi was not a very materialistic cat,” said Douglas, who worked in the studio with the Band of Gypsies. “When he made too much money, it embarrassed him.”

At the time of his death, however, he still owed thousands of dollars in advanced royalty payments to his record company and to his personal manager, Michael Jeffery. Because New York law required his estate to be administered by a New York resident, Jimi’s father, Al Hendrix, a Seattle resident, named attorney Henry Steingarten as executor.

During this period, a series of poor investments almost drove the estate into bankruptcy, Hendrix’s father said.

As a result, Hendrix senior replaced Steingarten with attorney Leo Branton to help him manage the estate. Branton restructured the assets and settled all pending litigation at home and abroad. By 1974, he had re-established control over most of the original master tapes and signed Douglas on as a consultant to help edit and prepare unreleased Hendrix material for the pop market.

The Hendrix estate was dissolved in 1975. While Hendrix’s sole heir, his father, still controls the rights to Hendrix’s name and image, he has spun off various other rights under confidential financial arrangements.

Are You Experienced?, Ltd., authorizes the licensing and distribution of Hendrix-related merchandise and acts as an agent for the present owners of the publishing and recording catalogue. As to exactly who owns the recording, publishing and royalty rights and how much money these assets generate annually, neither Douglas, Branton nor Hendrix is willing to supply details.

Al Hendrix is satisfied with the marketing of his son’s legacy.

“I still find it quite surprising that so many people are still touched by my son’s music,” the 71-year-old retired landscaper and ex-musician said in a telephone interview from his home. “The way I view my son’s contribution, he was like a scientist--always experimenting and discovering new ideas.”

But Hendrix’s penchant for loud, dissonant feedback is not all that artists and fans admire. Over the past decade, his compositions have been recorded or performed by artists as diverse as jazzy duo Tuck & Patti, classical music’s Kronos Quartet, rock groups the Pretenders and the Red Hot Chili Peppers, bluesmen John Lee Hooker and Albert King, rock stars Prince and Sting, and jazz arranger Gil Evans.

Between 1967 and 1990, his recording royalty rates were renegotiated with Warner Bros. and raised tenfold. In the past two years, revenues from publishing royalties--for Hendrix’s songwriting--have increased exponentially, according to Don Williams, who was hired by Branton to administer Hendrix’s publishing company in 1988.

Before 1987, the musician’s portfolio was earning about $20,000 annually in print publishing royalties. This year, Williams expects the portfolio to yield at least 10 times that amount and predicts that revenues will surpass the $500,000 mark before 1992.

For serious fans, a musical transcription series called the Jimi Hendrix Reference Library is also available in album-and-book packages from Hal Leonard Publishing. The series includes five instructional packages on innovative guitar techniques pioneered by Hendrix--including fuzz tone, feedback, wah-wah, whammy bar and finger grease.

Keith Mardak, president of Hal Leonard, said his company treats Hendrix’s contribution to the guitar as seriously as any of the classical artists offered in their catalogue. Mardak estimates between 100,000 to 150,000 Hendrix packages are sold annually worldwide at a price range of $14.95 to $24.95.

“Electronic feedback wasn’t just an accident with Hendrix,” Mardak said by phone from his Milwaukee office. “He elevated it to an art form.”

Jimi Hendrix bubble-gum trading cards are the latest item in a line of Hendrix items, including badges, key chains, post cards and calendars, due to hit record stores and retail gift outlets before November.

Dell Furano, president of Winterland Productions, the leading U.S. merchandiser of concert paraphernalia, claims orders for Hendrix merchandise have increased tenfold since his company took over the account in 1984. He estimates that sales of Hendrix items in 1990 alone will surpass the $1-million mark and predicts that annual sales will exceed $5 million before 1994.

“Jimi is to rock what Babe Ruth was to baseball,” Furano said. “While he has always had a cult following among guitar aficionados, the freedom and rebellion his music stood for is now beginning to achieve mainstream appeal all around the world.”

Even major department store chains have begun to embrace the commercial viability of Hendrix’s psychedelic mystique. This spring, JC Penney commissioned Winterland to create a Hendrix T-shirt design to be sold exclusively at its teen shops.

Furano said the company has plans to triple the number of items associated with the current product line from 25 to 75 to include beach towels, jackets, sunglasses, and possibly even a Hendrix comic book and computer video game.

To illustrate just how serious the international obsession with Hendrix memorabilia has grown, the $300 Fender guitar he played “The Star-Spangled Banner” on at Woodstock sold for $295,000 at an April auction. (Hendrix reportedly received only $12,000 for his performance at the concert.)

While Jim Morrison’s life is about to be dramatized in Oliver Stone’s “The Doors,” no feature film about Hendrix’s life is currently being considered. Although Douglas said he has received more than 100 screenplays, most tend to portray the guitarist as a drug-crazed sex maniac.

“Sure, Jimi did drugs and had women,” Douglas said. “But sex and drugs were merely a backdrop for the period he lived through. Sex and drugs aren’t what Jimi’s story is about. It’s about the metaphysical exploration of experimental music.”

A few corporations, such as TDK tapes and Wrangler jeans, have been authorized to employ snippets of Hendrix recordings to promote their products in television advertisements. Douglas also granted permission for a symphonic treatment of “Purple Haze” to be used as the score of a Porsche commercial. But most advertising proposals, he said, are vetoed.

Last month, according to Douglas, Sony terminated a contract to use Hendrix’s music in its magnetic tape advertisement because Sony officials did not want their product associated with a drug user. Sony could not be reached for comment. Douglas said he told them the same thing he told a group of Ridgefield, Conn., high school students last year who tried to petition school authorities to paint over a Hendrix mural on school property because they disapproved of Hendrix’s drug use.

“Anybody who tries to deny Jimi the acclaim he deserves just becaused he messed around with drugs is making a big mistake,” Douglas said. “Most kids are smarter than that. They don’t buy into all this whining about drug allegations. They’re into the music. And when it comes to music, nobody delivers like Jimi.”