by Ken McNab
Lennon, Harrison and Starr saw Klein as a heavyweight, someone to take seriously, but they viewed Eastman as a greenhorn. Lennon was also irritated that Lee Eastman hadn’t taken the trouble to fly over for this meeting. Perhaps the old man thought the son would strike up a better rapport with people closer to his own age. Maybe he thought the kid could handle it, a career rite of passage. Either way, Lennon took the snub personally.
And when Eastman junior began describing the band finances as ‘Kafkaesque’, Lennon could be heard sneering loudly. The remark only stiffened his belief – and that of Harrison and Starr – that young Eastman was a conservative intellectual, a pawn of Paul’s.
Top of the agenda was Eastman’s proposal for The Beatles to buy Nems outright for £1m using an advance against future royalties from EMI. The Beatles already held ten per cent of Nems stock, but the deal would end the twenty-five per cent management fee the Epstein family still took from the band (and would continue to take until the deal expired in 1976). McCartney also floated the idea of The Beatles buying the block of shares Nems held in Northern Songs. Klein pushed back, dismissing both propositions as ‘a piece of crap’ while excoriating Eastman as ‘a fool’ and ‘a shithead’. Nothing personal, you understand, but of course that’s exactly what it was.
First, Klein insisted, they would need to earn at least £2m before tax in order to repay EMI. Secondly, it would be corporate suicide to spend money acquiring another company when Apple’s finances were so exposed. Eastman quickly sensed that this was a fight he and McCartney would not – could not – win. As the meeting descended into a slanging match, Eastman tried to ingratiate himself with the others by taking on Klein at his own profanity-littered game. He denounced his rival as ‘a perfect asshole’ and called attention to a number of federal investigations currently taking place in the States into the finances of ABKCO Industries, the company Klein had founded with his wife Betty a year earlier as an umbrella firm involved in management, music publishing, film, TV and theatrical production. But he was no match for Klein’s persuasive pitch.
‘They always sided with the underdog,’ recalled Derek Taylor, referring to Lennon, Harrison and Starr. In the end, a fragile truce was set in place to allow tempers to cool over the weekend. They agreed to hold another meeting on Monday, 3 February.
McCartney was gripped by fear at the prospect of Klein having any say in the future management of The Beatles. He felt more than a little betrayed by his three friends. Hadn’t he done everything possible to try to accommodate John and Yoko while everyone else denounced them as publicity-mad freaks? He had even allowed them to move into Cavendish for a while when Lennon’s marriage to Cynthia ran into trouble. And he had maintained a diplomatic silence as he watched his friend become enslaved to heroin. And this was how he repaid him?
Stinging even further was the fact that Yoko had by now clearly replaced McCartney as Lennon’s creative partner on every level. He felt isolated, hurt and was wondering if all this grief really was worth the effort of holding The Beatles together.
But McCartney had one last card to produce: a letter from Mick Jagger, warning them all to steer well clear of Klein or commit ‘the biggest mistake you can make’. He invited Jagger to Apple to deliver his damning verdict directly to the others,
McCartney was aware that the Stones had learned that Klein had incorporated the band in the States using the same name as their British company, Nanker Phelge. Spoken out loud, no one had any reason to doubt they were not the same company. But the USA-registered Nanker Phelge was, in fact, wholly owned by Klein; and so all of the Stones’ US royalties and publishing money ended up in Klein’s pocket, with the Stones, effectively, his employees.
But when Jagger arrived at Apple he found Klein himself in the Apple boardroom alongside all four Beatles. It was a trap, set by Lennon to embarrass McCartney and Jagger. Intimidated by the scene before him, Jagger reneged on his promise to speak the truth about Klein. No accurate accounts of what he said have ever emerged, except for McCartney’s oft-repeated quote that Jagger told them: ‘He’s all right if you like that sort of thing.’
Some in the Stones’ orbit at that time, including Jagger’s then lover, Marianne Faithfull, have offered an extraordinary alternative explanation. She later suggested that Jagger had shamelessly stacked the deck to ensure The Beatles fell under Klein’s control, thus providing the Stones with a potential escape route from his clutches. Other accounts say Jagger found the courage, a few hours later, to warn Lennon to avoid Klein. ‘He’s all right but it’s hard to get your hands on the money,’ he is said to have warned.
Either way, when The Beatles, Eastman and Klein reconvened on the Monday, with Starr arriving from the first day of shooting The Magic Christian, a decision had to be made. The inevitable majority vote gave Klein an initial mandate to examine Apple’s finances. It was dressed up in a press release to suggest that the job would be managed by ABKCO, but no one was in any doubt as to where the real power now lay.
In his inflammatory Rolling Stone interview after The Beatles had officially disbanded, Lennon revealed the full depth of his hatred for the Eastmans and all that they stood for, as well as an unresolved ambivalence towards Klein.
‘We almost signed ourselves over to the Eastmans at one time, because when Paul presented me with John Eastman, I thought, “Well . . . when you’re not presented with a real alternative, you take whatever is going.” I would say, “yes,” like I said, “Yes, let’s do ‘Let It Be’. I have nothing to produce so I will go along,” and we almost went away with Eastman. But then [Lee] Eastman made the mistake of sending his son over and not coming over himself, to look after The Beatles, playing it a bit cool.
‘Finally, when we got near the point when Allen came in, the Eastmans panicked; yet I was still open. I liked Allen but I would have taken Eastman if he had turned out something other than what he was.’
As a sop to McCartney, Apple would retain the Eastmans to offer legal advice over the future direction of the company. The agreement with Klein, though, was purely verbal. McCartney refused to sign any formal document that could tie his fate to the New Yorker. The ceasefire was conditional on Klein and John Eastman agreeing to share key information. In reality, neither party, each seething with contempt and mistrust, had any intention of playing by those rules.
Having been given a three-to-one mandate to disentangle The Beatles’ finances, Klein began untying one of the key links in the chain. His first appointment later that same day was with Clive Epstein, who arrived at the Dorchester with the band’s long-time accountant, Harold Pinsker.
Epstein had little of his late brother Brian’s theatrical flair and found himself in a situation not of his own making. He had zero in common with The Beatles; he loathed the rock world and all its long-haired, druggy associations. By now he was desperately looking for an escape route from the ties that bound his family to the biggest band in the world. The obvious exit strategy was to sell Nems – now reincorporated as Nemperor Holdings – to the highest bidder, an arrangement that could see him return to his former life in Liverpool and pay the eye-watering death taxes due on Brian’s estate.
In January, he had already rebuffed approaches for Nems from Triumph Investment Trust, an aggressive London merchant banking firm, which had offered £1.3m, to be paid over two years. But out of loyalty to Brian’s ‘boys’ who, he felt, should have first refusal on any opportunity to buy out the company, Epstein stalled for time.
He had met John Eastman the previous month and laid bare the terms of the Triumph offer. At that precise moment The Beatles were in pole position to buy Nemperor for £1m in cash, provided of course that EMI agreed to give them an advance against future royalties. But Klein had baulked at the plan, arguing in typical swaggering style that he would get the company for nothing because Nems owed The Beatles a shedload of money. It was the first of many bitter stand-offs between the Americans and their respective Apple coalitions.
Aware th
at other vultures were already circling over the body of Nemperor, Klein persuaded Epstein at that first meeting to hold off on any move to sell the company until he had the chance to examine the band’s finances.
An uneasy agreement was brokered under which Epstein cautiously agreed to do nothing for three weeks. It was, though, a non-binding accord.
Much of all the delicate, forensic work Klein undertook during February would be crucial. But no matter how well intentioned, it had little chance of progress with the Eastmans (John reported almost daily to his father) carefully watching his every move and ready to undermine him to McCartney at every turn.
On 14 February, the whole pack of cards surrounding the Nemperor buy-out discussions came crashing down. John Eastman had, inexplicably, without any authority from any of The Beatles, sent a letter to Epstein.
It read: ‘As you know, Mr Allen Klein is doing an audit of The Beatles affairs vis-à-vis Nems and Nemperor Holdings Ltd. When this has been completed, I suggest we meet to discuss the results of Mr Klein’s audit as well as the propriety of the negotiations surrounding the nine-year agreement between EMI, The Beatles and Nems.’
‘Propriety of the negotiations’ – the words burned deep into Epstein’s soul. The smear against his deceased brother, a man whose very name stood for honesty and integrity, a man whose principled stewardship of The Beatles had provided a bulwark against the worst of the industry’s predators, shocked him to his core. Bad enough to have to deal with Klein – in fact, the slur smacked more of his tactics than Eastman’s – but now here was someone else trying to drag the family name through the mud.
He wrote a furious reply. ‘Before any meeting takes place, please be good enough to let me know precisely what you mean by the phrase “the propriety of the negotiations surrounding the nine-year agreement between EMI, The Beatles and Nems.” But his mind was made up. By the end of the day he had reopened the lines of communication with Leonard Richenberg, the straight-talking managing director of Triumph Investment Trust, and signalled his desire to work out a deal to flog the family silver – and cut ‘Brian’s boys’ out of the deal.
Three days later Triumph owned the seventy per cent of the company held by Queenie Epstein, the family matriarch. The ten per cent holding that still belonged to the four Beatles had virtually zero corporate value, since they would remain as minority shareholders in a company owned by faceless City fatcats, Lennon’s biggest dread.
Eastman’s astonishing letter exposed his lack of negotiating experience and political shortcomings. With a few strokes of his pen, he had shattered the delicate alliance between Epstein and Klein. And, in doing so, he pushed up Klein’s stock even further in the eyes of his three Beatle backers.
Klein learned about the deal in a frantic phone call from Neil Aspinall at Apple. Secretly, Klein was delighted at the unexpected turn of events. Eastman subsequently insisted the letter had been sent at Klein’s behest, a claim that Klein always denied.
Epstein was in no doubt as to where the blame lay. In Apple to the Core, he told authors Peter McCabe and Robert D Schonfield: ‘Eastman spent a week negotiating for Nems on the basis of the loan EMI was prepared to make The Beatles. But he loaded the offer with so many conditions and warranties that he ended up talking himself out of the deal. In my opinion, he was a little too young to be negotiating at that level.’
Aspinall, meanwhile, as an Apple director, had been ready to write a seven-figure cheque to Epstein before Eastman junior’s extraordinary intervention capsized any hopes of a deal to purchase Nems. ‘It’s fair to say that had we got Nems, a lot of our later financial problems would never have occurred,’ reflected Aspinall, who had been with the band throughout the decade, first as a roadie and now as an inner-circle confidant. ‘It cost The Beatles a lot more to free themselves from Triumph later. You could say the deal was crucial.’
Ironically, though, Epstein’s decision managed to do what neither Klein nor Eastman could ever have done – it united all four Beatles on a common cause. They were dismayed to see their management contract fall into hands of merchant bankers, the hidden face of the establishment. And it galled them to think that a quarter of all their earnings outwith music publishing would now be siphoned off by capitalist vultures, none of whom had any interest in them as artists but instead saw them as a giant corporate cash cow.
Klein threatened lawsuits against all concerned, and Lennon was prepared to give carte blanche to go to war with Triumph. At a meeting near the end of the month, the brash American demanded Richenberg unlock the golden handcuffs that bound The Beatles to Triumph. Not surprisingly, he showed Klein the door. ‘For all I knew he might have been a nasty little gangster,’ recalled Richenberg. ‘I only agreed to see him because Clive Epstein asked me to see him for Lennon’s sake.’
With February drawing to a close, Klein now fixed his crosshairs on EMI’s sixty-eight-year-old chairman, Sir Joseph Lockwood, by demanding that in future all Beatle royalties be paid directly to Apple. Caught between two warring factions, Lockwood opted for the Swiss option of neutrality and simply froze all Beatle cash until the relevant parties mediated a truce. Right then, though, a ceasefire looked impossible. Conversely, a trilateral war of attrition between The Beatles, EMI and Triumph Investment seemed inevitable.
*
Musically, February would turn out to be The Beatles’ most fallow recording period since the last few months of 1966. At that time, despite intense media speculation, there was never any question of a split. Now, however, it seemed as though all the joy had been snuffed out. And with a new generation of bands emerging, The Beatles risked looking passé even though the staggering sales of the White Album and ‘Hey Jude’ – their most successful single ever – suggested that their place in the public’s affections remained intact. Ranged against that, though, was a drip-feed of rumours over their future.
Geoffrey Cannon in The Guardian wrote at the time: ‘Unlike the Rolling Stones, who have developed the same rich preoccupations, The Beatles are an essentially versatile band; and they are now past their own limits. Other versatile bands have developed through never being identifiable in terms of set personnel,’ as he cited The Byrds, and Frank Zappa’s Mothers of Invention. Cannon then turned to other musicians – Eric Clapton and Mike Bloomfield – who had refused identification with one band. ‘The notion of what essentially constitutes a rock music band is now in flux, and George Harrison and Paul McCartney do often get together and play with musicians they respect. But this is done privately: and that’s what’s wrong. If Harrison wants to play with Eric Clapton, he should say so on record. The Beatles should jump from being a first-generation band to embracing the creative flux of the richest third-generation bands.’
Harrison was due to go into London’s University College Hospital on 8 February to have his tonsils removed, followed by eight days of recovery. Though he had experienced indifference from Lennon and McCartney too many times, he now felt emboldened, almost reborn, spiritually and professionally. His latest contributions to the ‘Get Back’ sessions had sounded good. Even Lennon had joined in on ‘For You Blue’, a jaunty bottleneck blues number. For the first time Harrison counted the songs in his bottom drawer and was amazed to discover that there were nearly thirty. The idea of putting out a proper solo album – not a self-indulgent project like Wonderwall Music, the intentionally non-commercial, Indian-flavoured film soundtrack album, released three months earlier – drifted through his mind. Yes, one or two numbers lacked lyrics, but now, stuck in hospital, he had the peace and quiet to get them down.
One such song was ‘Something’, which he had been carrying around since the White Album sessions began winding down. Though the opening line, ‘Something in the way she moves’, was a straight crib from a James Taylor tune, everyone who had heard him run through the song reckoned it had potential. But he couldn’t figure out the words needed to sufficiently impress Lennon and McCartney. Now, though, this spell in hospital, might give him the opportunit
y to finish the words.
For the first three weeks of February, meanwhile, Lennon and Yoko kept themselves to themselves at the Montagu Square flat they were leasing from Starr, piecing together some avant-garde tapes that explored the human condition. Now, more than ever, they looked like each other’s mirror image. This was the season of dangerous curiosity, of reckless experimentation. Behind closed doors, as Yoko later attested, they imagined themselves as Sixties versions of Robert Browning and Elizabeth Barrett, those star-crossed lovers of the Victorian age. It was a fantasy image, fuelled as much by the pain-numbing chemicals now coursing freely through both their bodies. Nine months had passed since their friendship had gone from quixotic to compulsive. It had shifted quickly through the gears from lust to outright obsession from the night the previous May that had seen them consummate their relationship after making the tapes that formed Two Virgins and precipitated the end of his seven-year marriage to Cynthia, his college sweetheart. Adultery did not sit well with his image as a Beatle. Especially with a twice-married Japanese artist whose main claim to fame so far had been a bizarre film of people’s backsides. Memories of Japan’s conduct during World War Two still hung in the air, which gave free rein to appalling racist remarks being hurled in Yoko’s direction.
Barry Miles – then a close friend of McCartney’s, and the architect behind the Zapple label subsidiary of Apple, which focused on avant-garde spoken-word recordings – often saw at first hand how the other Beatles and the band’s inner circle reacted to Yoko’s presence.
He told me: ‘John railed against anyone who suggested that the other Beatles and the staff at Apple hated Yoko because they were racists. That was never the case as far as I could tell. They didn’t hate her. But the problem was they didn’t love her either.’
Now the months of public opprobrium, coupled with John’s detachment from his bandmates and his attachment to heroin, had forced the couple into a kind of quarantine. But midway through February, they received a letter that would change Lennon’s life, and public image, for ever.
