by Peter Brown
But Dick James had seen the writing on the wall; it was written in Allen Klein’s handwriting, and James was determined to pull out. He had greatly enhanced the value of Northern Songs by his hard work and by diversifying the catalog with the purchase of such songs as “Stardust” and “Those Were the Days.” But he also knew that the value of Northern Songs depended not only on the 159 Lennon-McCartney tunes it already owned but also on the willingness and ability of Lennon and McCartney to continue to compose together. Already John and Paul had refused to sign an extension on their songwriting contract with Northern Songs, and Dick James had good reason to doubt the longevity of their relationship. On one of his rare visits to see the Beatles at work, at the Twickenham Studios during the filming of Let It Be, not only did the Beatles ask him to leave but the icy tension between John and Paul made the freezing studios seem warm in comparison. Yet Dick James might have stuck it out if it hadn’t been for the injection of Allen Klein into the already volatile situation. James knew of Klein’s propensity for lawsuits and tearing up contracts, and in the few meetings James had had with him, Klein’s behavior had been characteristically harrowing. This was clearly the time to abandon ship. After all, James had Northern stockholders to consider. So he sold his stock to Lew Grade—without ever mentioning it to any of the Beatles.
With John and Yoko in Amsterdam, Paul and Linda in East Hampton, New York, on their honeymoon, and Klein on vacation in Puerto Rico, that left only George to go see Dick James to ask him to postpone the sale until Paul and John could return to London. Neil Aspinall and Derek Taylor accompanied George on this sensitive diplomatic mission. I counseled them all not to get into any trouble, but Derek and Neil seemed hell-bent on giving Dick James a piece of their minds and had a few scotch and Cokes before leaving the office.
They weren’t in Dick James’ Charing Cross Road office two minutes before things got out of hand. James said he had no intention of waiting for John to get out of bed; he said he had to move his shares quickly or the price might fall. “It’s a very serious matter,” he told them solicitously.
George lost his composure, jumped up, and began to scream, “It’s fucking serious to John and Paul is what it is!” Derek and Neil happily chimed in, and the meeting turned into a verbal bloodbath during which George, Neil, and Derek got out all the animosity they had been saving up for James over the years. It ended with them storming out of the office and James warning them, “You’re getting a lot of very bad advice, if I may say so.”
Again the Beatles rode into financial battle, this time with Allen Klein leading them. Klein enlisted the aid of Bruce Omrod, an officer with the merchant bank of Henry Ansbacher and Co. “Sergeant” Omrod, as he was nicknamed, was a tall, distinguished gentleman experienced in takeover battles. But Omrod had no idea what he was letting himself in for in agreeing to make a counterbid for Northern and supervise the purchase. On Friday, April 11, the Beatles formally announced their plan to fight the ATV bid. Newspaper advertisements appeared urging undecided shareholders not to accept ATV’s offers. Omrod told the Financial Times that the Beatles would make a substantial counteroffer. “Finding the cash is a detail, but no more than a detail.”
It was that detail that put the final wedge between John and Paul. In order to raise the money for a counteroffer, John and Paul would have to put up their shares in Northern Songs as collateral. Even Klein was chipping in by putting up 145,000 shares of his prudently held MGM stock. But under the advice of the Eastmans, Paul refused to put up his stock. At first he said it was because the Eastmans said it was too risky, until the reason became clear at a meeting at Ansbacher on April 20. When the Beatles’ Northern Stock holdings were tallied, it was disclosed that Paul had 751,000 shares of Northern Songs versus John’s 644,000. At Paul’s direction, I had been purchasing shares secretly for him in his own name. Paul had recently learned a greater appreciation for the value of a copyright, especially his own. As he put it, “It was a matter of investing in something you believed in instead of supermarkets and furniture stores... so I invested in myself.”
“You bastard!” John spit. “You’ve been buying up stock behind our backs!”
Paul blushed and shrugged limply. “Ooops, sorry!” he smiled.
“This is fuckin’ low!” John said. “This is the first time any of us have gone behind each other’s backs.”
Paul shrugged again. “I felt like I had some beanies and I wanted some more,” he said.
Without informing ATV or the Beatles, the brokers on the London market identified the holders of the outstanding shares in Northern Songs, and a meeting of the three largest shareholders was arranged to protect their investment. It was agreed to pool all the shares in a consortium representing nearly 14 percent—the decisive hand.
John’s and Paul’s first tactic was to imply that if the sale to ATV went through, they would stop composing together and not fulfill their six songs a year minimum stipulated in their Northern contracts. An exasperated Lew Grade felt it necessary to reassure the stockholders in a statement to the Financial Times saying, “I have every confidence in the boys’ creativity. They would not possibly be able to sit still and write only six new songs a year. Apart from that, songwriting plays an important part in the boys’ income.”
Another point of contention was that if John and Paul gained control of Northern Songs, who would sit on the board? Allen Klein? With Klein’s reputation, his presence would probably not be agreeable to the stockholders. By Easter it seemed that the consortium would throw their shares in with the Beatles on the basis of an extended songwriting contract with Northern—but only on the condition that a new board of directors would be elected. This board would be comprised of three directors—none of whom could be Allen Klein. One suggestion for a board member acceptable to both the stockholders and John and Paul was David Platz, the respected head of Essex Music Corporation and the fourteen-time winner of the Ivor Novello Award for Great Britain’s best music publisher. A second suggestion was Ian Gordon, one of the managing directors of Constellation, who had an easygoing relationship with what the consortium regarded as “show business types” like John and Paul.
On May 3 ATV made front-page financial news when they announced they were extending the date on their bid for Northern Stock until May 15. If they had not won control of the company by then, they intended to turn the tables on the Beatles and accept their partial bid of forty-two shillings, sixpence a share.
The next day Northern Songs’ price rose by nine pence.
Two days before the ATV deadline it seemed they had failed in their takeover bid, and a statement to that effect was drawn up and released to the press. In a front-page article in the Financial Times ATV announced they had come within 150,000 shares of owning 47 percent of Northern Songs. It appeared the Beatles had won.
Meanwhile, as Ian Gordon, officers of Astaire and Co., Eastman, Klein, John, Yoko, and Paul were tied up in a five-hour meeting, trying to come to terms with the consortium, John lost his temper. “I don’t see why I should work for a company in which I have no say,” he told those present. “I’m not going to be fucked around by men in suits sitting on their fat arses in the City.”
John’s statement effectively threw the consortium into ATV’s hands. On May 19, although ATV had already admitted defeat in the papers, the consortium signed a deal with them shortly before the Beatles’ own bid expired at three P.M. With some additional machinations and business details, the deal dragged on until October, when it was finally closed. But as far as John and Paul were concerned it was all over now except for the mopping up. They had lost their child. To pour salt in the wound, ATV appointed Dick James to sit on the board of directors.
John and Paul were left with a £5,000 bill for Ansbacher and Co.’s services.
5
Now was the time for Klein to try to renegotiate the Beatles’ contract with EMI and Capitol and get them one of those huge advances he was famous for, except for one small detail—he d
idn’t legally represent them. All this time Klein had been operating on the Beatles’ behalf without a signed contract. He had long ago drawn up a contract for them to sign, but so far none of them had actually put his signature to it. The terms were for a three-year period, cancelable by either side at the end of each year. Klein’s fee for managing them, however, was not to be the standard 20 percent of their income—income which they were already earning before Klein appeared on the scene—but 20 percent of whatever increases he made for them. Therefore, renegotiating their recording contracts was a potentially large source of income to Klein.
As far as Paul was concerned, the Eastmans wouldn’t even consider letting him sign a contract with Klein under any circumstances. Paul still clung to the hope that he could get the other Beatles to see Klein’s evil ways before it was too late, but no matter what the evidence seemed to be, they stuck with Klein rather than cast their lot in with the Eastmans. As John told Paul about Klein, “Anybody that bad can’t be all that bad.”
One night in early May, on one of the rare occasions all four Beatles were in the Abbey Road studios together, there was a rumor going around that Klein was going to appear that night for a showdown. Paul dreaded having to speak to Klein. He even was having nightmares in which Klein was a dentist chasing him with a drill. Sure enough, late that evening Klein appeared with a set of management contracts under his arm.
He stuck the contracts under Paul’s nose and said, “I gotta have dis ting signed. I gotta have you guys on contract.”
“On a Friday night?” Paul asked innocently. “What’s the big hurry? Give me the contracts and on Monday—”
Everybody groaned. “Uhhh, there he goes again,” John said. “You’re stalling again, Paul.”
“But what’s the big hurry?” Paul insisted.
Klein explained that he was on his way to the airport to catch a plane for New York, where there was an ABKCO board meeting over the weekend. ABKCO was Klein’s personally owned company—the initials stood for Allen and Betty Klein Company—and according to Paul, “Klein was the ‘board,’ the tables, and the chairs.” Paul insisted he could not sign any contracts without first showing them to his London attorney, Charles Corman. But since Corman was an orthodox Jew and this was the Sabbath, it would not be possible to reach him until Sunday.
“Oh yeah? Well, we can’t wait. If you won’t sign dis, den we gotta do majority rules.” Klein was blatantly trying to turn the three other Beatles against Paul.
“Forget it,” Paul said. “You’ll never get Ringo.” Paul turned to wink at Ringo, but the drummer only gave him a sick look.
“I’m in with them,” Ringo said.
“It’s like bloody Julius Caesar!” Paul said. “I’ve been stabbed in the bloody back! So it’s come to this ...”
Paul never got any sympathy from the other Beatles, particularly in light of his having bought up Northern Songs’ stock without telling anyone. Klein flew out of London that night without Paul’s signature, but it didn’t matter. While his plane was still in the air, I received a phone call in New York where I happened to be on business with Neil Aspinall. It was John. He was with George and Ringo, and they were instructing Neil and me to sign Klein’s contracts in our capacity as directors of Apple Corp. Thus on May 8, 1969, Paul was effectively caught in Klein’s web.
Much to Paul’s discredit, his onerous relationship with Klein didn’t stop him from standing behind the man when it came to the renegotiation of contracts with EMI and Capitol. Although Sir Joseph Lockwood was not happy about the idea of paying the Beatles more money, they had already fulfilled their minimum number of albums and singles, and Sir Joe didn’t think it unfair if they got a commensurate increase for additional product. One day in May, Allen Klein appeared in Sir Joe’s office with all four Beatles in tow. “I don’t mind talking about this,” Sir Joe said, “as long as there’s some benefit to both sides.”
Klein chuckled. “You don’t understand,” he said. “We get everything, and you get nothing.”
Sir Joe thought that the man was surely joking, but as the minutes passed Klein became more threatening and crass. Sir Joe called an end to the meeting and asked Klein to leave. Klein marched out the door with John, Yoko, George, and Ringo behind him. Paul hung back, making apologetic faces at Sir Joe behind the others’ backs.
“That’s all right,” Sir Joe said to his assistant. “They’ll be back.” Sure enough, half an hour later Klein called to apologize, and negotiations later resumed. The deal wasn’t finished until September, but when it was done the Beatles were mighty impressed. Under the new terms two new albums were due each year until 1976. All the new albums would net them an unprecedented 58¢ royalty until 1972 and a 72¢ royalty thereafter until 1976—an increase from a previous 39¢ royalty per LP. To boot, reissues of early recordings would garner a 50¢ royalty until 1972 and 72¢ thereafter. However, for the first time in the Beatles’ history, Klein agreed to re-release old material, a marketing ploy that Brian swore he would never agree to. Now the record stores would be flooded with “Best of” albums and cheap compilations. Still, because of this repackaging, the Beatles’ royalty incomes soared.
Paul was as impressed as the rest of them, albeit grudgingly. Paul never complained about making money. “If you’re screwing us,” he told Klein, “I can’t see how.”
But that didn’t mean the Eastmans were going to let Paul sign the new recording contracts that Klein had negotiated. They feared that if Paul signed them it could be legally interpreted that Klein represented Paul, and he would therefore be entitled to 20 percent of Paul’s increased earnings. Hypocritically, Paul attended the photo session to commemorate the contract signing. He was photographed standing around a table with Klein and the three other Beatles, as if his signature was on the contract with the rest of them. Thus, as far as the outside world knew, the Beatles were still whole.
6
With Klein now in power there followed a bloodletting that no one could have anticipated. Klein’s first task was a mass firing. Paul also backed Klein in this endeavor. For months Paul had been announcing his intention to clear Apple of deadwood. He had asked several of the executives for a list of all Apple employees who weren’t essential, but the request so distressed us that we put off the task and pretended the list was forgotten or misplaced when Paul demanded to see it. Now such a list was no longer necessary. Klein was making his own decisions.
Brian Lewis in the contracts department was one of the first to go. The publishing office was closed down, and Dennis O’Dell of the film division resigned. Magic Alex, away on a trip to Paris, returned to London to find himself locked out of his Boston Place laboratory and his precious inventions sold to an electronics scrap dealer. Klein had computed that Alex had cost the company a reported £160,000, aside from the £20,000 paid for the Boston Place property. Of the 100 patents Alex had applied for through EMI’s helpful patent attorneys, every single one of them had been turned down as not being an invention but just an embellishment on an already patented idea.
Some of the dirty work was left to me. I have been criticized for serving Allen Klein in this task, but I unhappily agreed to do the job only because I hoped the news could be delivered with kindness and dignity, instead of from Klein’s mouth.
Six employees and their staffs went in one afternoon. One of the most regrettable firings of the day was Ron Kass. Since it was such a nice sunny spring day, I asked him to take a walk with me and told him the bad news on Savile Row. Kass was deeply hurt but not surprised. Klein had seemed especially resentful of Kass all along. Kass was doing an excellent job with the record company and ran the division with pride—and corresponding autonomy as far as Klein was concerned. But Kass believed that Klein’s resentment over him was due less to a power struggle in business than to the fact that Klein wanted to live in the luxurious town house Kass occupied. Apple was picking up the tab, as part of Kass’ contract, on a picturesque town house on South Street in Mayfair, and Klein w
as searching for a permanent place to live in London.
Klein had launched an out-and-out campaign against Kass. One day Klein had requested a meeting in my office with all four Beatles, Yoko, Neil, and Ron Kass. Klein opened a folder and produced a check that looked vaguely familiar to Kass. It was from Capitol Records in New York, and it was made out to Kass for $1,250. Kass remembered the check after seeing the date. It was made out on the first official day of his employment with Apple Records, on the day that John and Paul had arrived in New York to publicize the opening of Apple. The English currency laws allowed an English resident to take only £50 in cash out of the country, and the two Beatles needed more spending money than that. Kass had requested that Capitol Records advance them some cash, but the accounting department refused, afraid of getting involved in English tax matters. Instead, they agreed to give Kass a check made out to him, which Kass could cash at their New York bank. The S1,250 would subsequently be paid back to them by Apple in London.
“What happened to dis money?” Klein demanded, waving the check in the air.
Kass recounted the incident, ending by turning to Neil to whom he had given the S1,250 on the Chinese Junk in Manhattan Harbor. Neil shrugged. “I hardly remember being in New York let alone taking the twelve hundred dollars,” he said.
Ron was indignant. “Surely you don’t think I stole twelve hundred and fifty dollars on my first day of work?” The Beatles all said they believed him, but Kass could see from the expressions on their faces that Klein had planted a seed of doubt, and they would never fully trust him again.
