Nor did Michael tell his brothers of his plan to meet with Berry, since he felt certain that they would try to talk him out of it. The Jacksons prided themselves on one vote each, even though Joseph's vote usually trumped everyone else's. Most certainly, Michael's siblings would have felt that by meeting with Berry he was seizing more power than he was entitled to have as part of the group.
Michael and Berry arranged to meet at the Gordy estate in Bel Air on 14 May 1975. ‘It was one of the most difficult things I've ever done,’ Michael would recall. Mustering up his courage, he laid his cards on the table.
‘We're all unhappy, Mr Gordy,’ he said, according to his memory. ‘Do you really want us to leave Motown?’
‘Well, Michael, someone as smart as you,’ Berry began, ‘should know that without Motown, The Jackson 5 would still be in Gary, Indiana, today.’
Michael wasn't cowed by the fact that Berry had apparently decided to play the guilt card. ‘That doesn't answer my question,’ he told him.
Michael would later recall that he complained to Berry about the fact that Motown would not allow the brothers to write or produce their own music or control publishing rights. He was unhappy because he hadn't been allowed to contribute to The Jackson 5's most recent album, Dancing Machine, despite the fact that he thought he had some strong songs he could have added to the package. If he could have had just one song on the album, Michael said, it would have shown that Gordy had confidence in him as a songwriter.
Berry remained calm. ‘I've been hearing this from my artists for years,’ he said. ‘However, we can work it out, Michael. Look, I worked it out with Stevie [Wonder], and Marvin [Gaye], didn't I?’ He was clear. He said he did not want the group to leave Motown. However, he added, ‘If you think you can get a better deal somewhere else, then you have to go somewhere else, I guess. But it just won't be right… or fair.’
In Michael's eyes, Berry Gordy was a hero. He respected him and admired the tenacity with which he had transformed The Jackson 5 of Gary, Indiana, from local homeboys to international superstars. He thought of Berry as one of the smartest men he had ever known, and was amazed by the way he had made Motown such an international success story. Berry was an inspiration to Michael. To hear him now say that the Jackson family was being unfair to him – after he had brought the group to Los Angeles, made arrangements for their living conditions, paid for their educations, and made them stars – was difficult for Michael.
‘What makes you think you can write or produce your own hit?’ Berry asked Michael.
‘I just know it,’ was Michael's quick answer.
Berry looked at him sceptically. ‘I don't know that that's good enough.’
‘Well, what made you think you could build Motown into what it is today?’
Berry didn't answer.
‘You just knew it, right?’ Michael challenged.
Berry flashed a tolerant grin. ‘He nodded at me as if to say, “You're going places, kid,”’ Michael recalled. It ended with Berry emphasizing that he thought of himself as a father-figure to Michael, yet also stressing that it was important for the teenager to honour his natural father. ‘He said he believed I would do what was best,’ Michael told me later, when remembering the meeting. Michael added that he ‘felt a little sick about the whole thing’, especially when Berry hugged him as he was leaving because, in his gut, he knew that no matter what he expressed to Joseph and the brothers about it, the cards were stacked against the Jacksons staying with Motown.
‘I can promise you this,’ Berry concluded, ‘I won't do anything to hurt you or your family.’
Michael's meeting with Berry Gordy showed surprising initiative, as well as no small measure of courage for a teenager. It was the first hint to many at the time that he was more than just a child prodigy. He had moxie. He seemed to understand what his father didn't: that there are times when it makes sense to sit down with your opponent and try to reason with him. In his own uncomplicated way, Michael was able to cut through some of the rhetoric that had lately been so prevalent in the communication between Berry and the Jackson family. He was able to extract from Berry a promise that he would not do anything to hurt the family, which was quite a statement for him to make, and seemed genuine.
Joseph had heard from an associate at Motown that Michael had seen Berry in private. Imagine his fury. When Michael got back to Encino, he was pacing in the living room like a caged animal waiting for dinner. Michael would not discuss with me the details of the argument that ensued between him and his father, but it isn't difficult to imagine that Joseph made it clear that, in his view, Michael was out of his league in trying to negotiate with someone like Berry Gordy. Once he calmed down, he had to admire his son's nerve, though. At least, one would hope so. The brothers, however, were annoyed.
‘Michael had no right to meet with Berry Gordy,’ Jackie said, years later. ‘It was unfair of him to go behind our backs. We were all mad at him. And really, what did he accomplish?’
Perhaps Michael didn't accomplish much in terms of The Jackson 5's future at Motown, but his meeting with Berry was an important personal milestone. He had obtained Berry's attention, which was something even his father, as well as his brothers (with the exception of Jermaine), had not been able to do. However, it did set him apart from the brothers and, from this time onward, none of the brothers would be warm to any suggestion that Michael be further individualized from the group. ‘Michael always had his own idea of how things should be done,’ Marlon Jackson once said. ‘But The Jackson 5 was a group, not his special project, and his was just one vote.’ In other words, Marlon saw the writing on the wall.
The night after Michael's meeting with Berry, Joseph called a group meeting in the living room of their Encino home. All of the brothers were expected to appear, except for Randy and Jermaine. Young Randy had no say in any group matters, at this time. Jermaine was on holiday with Hazel, but he probably would have been excluded, anyway, since the family felt he had lost his objectivity about Motown. Jermaine later said, ‘Because of me being married to Hazel, they thought they couldn't trust me so they kept me in the dark.’
Jackie, Tito, Marlon, Michael and Joseph voted unanimously to leave Motown. Michael was ambivalent, but he knew it wasn't smart to be the one dissenting vote. What good would it do him, anyway?
‘I just want it to be done fairly, and something about this doesn't seem fair to me,’ Michael said. ‘Berry made us stars. Don't forget that.’
‘Look, Berry's fine, but it's over,’ one of the brothers said. ‘It's time for us to be making the big bucks.’
‘I agree,’ said another one. ‘It's time to go. We're dying at Motown.’
‘He said he wouldn't hurt us,’ Michael said, trying to stick up for Berry.
‘Yeah, right,’ Joseph said, sarcastically. ‘Look, it's settled,’ he concluded.
‘But what about Jermaine?’ Michael wanted to know.
‘I'll take care of Jermaine,’ Joseph said. ‘What do I always tell you kids?’
‘There are winners in this life, and losers,’ Michael said, parroting his father's credo. ‘And none of my kids are ever gonna be losers.’
Joseph smiled. ‘If we stay at Motown,’ he concluded, ‘we lose. And we're not losing.’
CBS Offers the Jacksons a ‘Sweet Deal’
After the die was cast, Joseph Jackson and his attorney, Richard Arons, quietly began scouting for a new record deal, meeting first with Atlantic Records, which had a long experience with rhythm-and-blues music. Surprisingly, Atlantic's chairman, Ahmet Ertegun, was unenthusiastic about The Jackson 5, he said, because of their inconsistent record sales at Motown in recent years. Joseph was not interested in trying to convince anyone of his sons' popularity. He'd had enough of that at Motown. If anything Ahmet's view helped to underscore Joseph's opinion that Motown truly had damaged his sons' reputation in the music industry.
Joseph was more interested in the CBS Records Group anyway, at which most of the black
acts were contracted to the Epic subsidiary. CBS was renowned for its excellent record distribution and promotion network. ‘They make Motown look sick,’ is how Joseph put it.
Ron Alexenberg, president of Epic, and, ironically enough, a former protégé of Motown's Ewart Abner, was interested in signing The Jackson 5. Joseph respected Alexenberg – under his guidance, Epic had increased its annual billing from less than $10 million to over $100 million. A competitive leader with his finger on the pulse of the record industry, he suspected that Berry Gordy had tapped only a small percentage of the Jacksons' fullest potential. He wanted to find out what else was there.
Joseph was also attracted by the company's profitable relationship with Kenny Gamble and Leon Huff, producers of the so-called Philly Sound that had generated millions with hit records by black groups like The O'Jays and Three Degrees. Gamble and Huff had their own label at CBS, which they called Philadelphia International. Though Joseph felt that Philadelphia International was too small a subsidiary for The Jackson 5, he admired CBS's commitment to black music. Perhaps the company would one day award him his own label, as well, he thought. He saw a future at CBS, not just for his sons but for himself.
Ron Alexenburg told Walter Yetnikoff, president of CBS Records, that he wanted to sign The Jackson 5 immediately. Walter was sceptical. ‘They haven't been hot in a long time,’ he said. ‘And now look at them. They're into this kitschy, Vegas thing.’
‘Trust me,’ Ron told him, according to his memory. ‘This group isn't finished. It hasn't even begun yet.’
After quick and easy negotiations, an agreement was struck, one that Joseph called ‘a sweet deal’. The Jackson 5 would receive an advance – known in the record industry as a ‘signing bonus’ – of $750,000. They would also receive an additional $500,000 from a ‘recording fund’ – money meant specifically to produce the group's albums. They were guaranteed to be paid $350,000 per album, far more than they had ever received at Motown (but many millions less than Michael Jackson would be paid for his services a scant five years down the road).
All of the advance money from CBS was to be recouped from royalties, but the royalty rate the new label offered was 27 per cent of the wholesale price for records released in the United States. At Motown The Jackson 5 had been paid 2.7 per cent, and before they saw that they knew they would have to pay back the costs of expenses – including studio time, over which they had little to no control – from royalties.
At this time, 1975, an album retailed for approximately $6.98, $3.50 wholesale. So at Epic the Jacksons would make approximately 94.5 cents per album sold in the United States, and 84 cents abroad. At Motown, they made roughly 11 cents per album sold in the United States, with no difference in the European rate.
As outlined in the Epic deal, after each Jackson 5 album topped $500,000 in sales, the group's royalty rate would jump to 30 per cent, about $1.05 a disc. In terms of income, this new deal was worth about five hundred times more than the one the group had at Motown.
A snag in negotiations occurred when Walter Yetnikoff refused to allow the Jacksons to write and produce, or even choose, all of their own material. He simply did not have confidence in their abilities as writers or producers since none of them had any experience in that arena. Ron Alexenberg assured Walter that ‘demos’ – roughly recorded samples – of songs penned and produced by the Jacksons, which Joseph had submitted, showed great promise. Still, Walter was not swayed. Therefore, the best Joseph could negotiate was that his sons would be able to choose at least three songs on each album, written by them or someone else. Also, there was an understanding that if the group came up with three good songs of their own, those tunes would receive fair consideration for use on an album. This, too, was more than they had ever gotten at Motown. However, the concession was not to be in the contract. It was verbal, and anyone knows that in the world of business a verbal agreement is tough to enforce. Still, at least there was some dialogue about the notion of the group having artistic freedom. Joseph was confident that his boys would only have to prove themselves one time… and after that they'd never look back.
Michael was amazed by the contract CBS had offered the family. He had no idea that the group was worth so much and that this was the kind of contract other superstar acts were accustomed to in the record business. He had to admire his father's tenacity. After all, had it not been for Joseph, The Jackson 5 might have slid into obscurity at Motown. ‘I had to admit it,’ Michael later noted, ‘this was one incredible record deal. My father did an amazing job for us.’
Still, Michael was torn between the notion of loyalty to Berry and that of good business sense. He decided to discuss the matter with Diana Ross. Her reaction was predictable. She said that she had no influence over Berry where business matters were concerned – and she wasn't lying, she didn't – but that Michael should listen to him because, as always, he knew what was best for all of his artists. ‘I just believed that the boys should stay at Motown,’ she recalled in a 1981 interview. ‘I was loyal to Berry at that time, and I felt that they should be as well. I told Michael that loyalty is the most important thing, not money.’
In six years Diana Ross would change her mind about being loyal to Berry Gordy and Motown. When she was having her own disagreements with him and decided to check on her value at other companies, RCA offered her $20 million, much more than what Berry could offer her. She turned to Smokey Robinson for advice. Smokey gave her the same advice she had given Michael about loyalty to Berry. However, she felt she had no choice. It didn't make sense to turn down that much money: she signed with RCA.
Joseph to Jermaine: ‘Sign It!’
The CBS contracts were drawn up in a couple of days. Each of the four brothers eagerly signed them.
The problem then became how to break the news to Jermaine, and convince him to sign the deal. Jermaine's father-in-law, Berry Gordy, was now considered to be the enemy, but Joseph realized that Berry had a powerful influence over his son. Berry had recently promised Jermaine an exciting and lucrative future at Motown; he suspected that the group would try to leave and he wanted to assure Jermaine of his future at the company. He had trusted him enough to give him his only daughter in marriage. It would be Joseph's challenge to convince his son that his wishes should prevail over Berry's. He waited three days before summoning Jermaine, trying to determine a strategy. He soon realized there was no easy way to coax Jermaine away from Berry. It shouldn't be that difficult a decision for Jermaine, anyway, he decided. After all, he was Jermaine's father, not Berry. He was certain that Jermaine would make the ‘right’ decision. ‘After all,’ he said, ‘Jermaine's not stupid. I hope.’
‘Come to the house tonight,’ he told Jermaine on the telephone. ‘Come alone. Don't bring that wife of yours.’
‘That's when I knew something was wrong,’ Jermaine recalled, years later. ‘Hazel is a very strong person and asks a lot of questions. I'm sure my father thought he could get me to do anything if Hazel wasn't there. I was afraid to go, afraid of what I'd find.’
When Jermaine arrived at the Encino estate, Joseph escorted him into the bedroom and closed the door. The contracts were spread out on a bureau, signatures on four of them. A fifth contract was unsigned. Joseph picked up Jermaine's contract and handed it to him. ‘Sign it,’ he ordered. He didn't attempt to reason with him, or even explain anything to him… he just told him to ‘sign it’. How Joseph could be so obtuse remains a mystery. He may have been able to get Jermaine's signature if only he had used a modicum of common sense in his approach. Of course, Jermaine refused.
‘I said, sign it.’
‘No, Joseph,’ Jermaine said. ‘I'm not signing.’
‘You sign this damned contract, Jermaine.’
‘I ain't signin'’
‘Think about the money,’ Joseph shouted at him. ‘Real money. You think Motown's gonna come close to this deal? Look at this money.’ He flipped through the pages, trying to find the clause that outlined terms.
‘I don't care,’ Jermaine said. ‘It's not about money for me.’
‘You don't care? You're crazy. That's what you are,’ Joseph said, angrily. By now he was shaking his fist at his son. ‘You sign this goddamn contract, Jermaine, or you'll be sorry. CBS says The Jackson 5 will be the next Beatles, and you know that's what we've been working for.’
‘Hell no. I don't want to be no Beatle,’ Jermaine said. ‘I'm not signing it, Joseph. Forget it.’
With that, as Jermaine recalled it to me in an interview years later, he ran from the bedroom and out of the house. He told me that he knew he had to tell Berry what had happened – and that the Jacksons were actually leaving Motown – and the news couldn't wait until he got home. He pulled over to a pay telephone and called his father-in-law.
‘The brothers, they signed with CBS, Berry,’ he blurted out as soon as Berry picked up. ‘I can't believe it. But they did it. They left Motown.’
Jermaine recalled that there was silence on the other end of the connection. Finally, in a soft and calm voice, Berry spoke. ‘Are you absolutely sure, Jermaine?’
‘They already signed the contracts,’ Jermaine answered, his tone frantic. ‘I saw them with my own eyes.’
‘Well, what about you? Did you sign?’ Berry asked.
‘The brothers are leaving because there are problems at Motown,’ Jermaine said, ‘but I want to stay, Berry. I want to help work out the problems.’
Jermaine later recalled, ‘I told him I didn't sign and that I wasn't going to. He told me to come by his house, which I did. We talked it out. That night, he became like a second father to me, a sensible father. “You're on your way to the top,” he told me. “You could be running Motown one day.” That's what I wanted. I wanted to be the president of Motown. I knew I could do it. I knew I had it in me, even if Joseph never believed I did. Berry gave me the confidence to know that I could go places if I stayed with him and with Motown. I believed him. I didn't believe anything my father had to say about anything. I believed in Berry Gordy, not in Joseph Jackson.’
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