Wednesday, April 08, 2009

Beatle People: Allen Klein

Allen Klein (born December 18, 1931) is a controversial American businessman and record label executive. His career highlights included celebrated clients such as The Beatles and The Rolling Stones. Many of his famous clients eventually turned against him, however, and he became involved in acrimonious legal battles against them.

The accountant

Allen Klein was born the son of Jewish immigrants from Budapest, Hungary. His father was a butcher, and his mother died before he reached the age of one. As a teenager, he worked several jobs while attending evening classes. He excelled at mental arithmetic, and graduated from Upsala College, East Orange, New Jersey, in 1956. He did bookkeeping for several show-business people, and audited record companies. In 1957 he began his own business, a partnership with his wife Betty. A couple of years later, while attending a wedding, he met singer Bobby Darin. He asked Darin "How would you like to make $100,000?" A stunned Darin asked what he had to do. "Nothing," was Klein's reply. He then pursued Darin's record company for what he regarded as monies owed to the singer. Darin let Klein audit his accounts and received the check, exactly as promised. This 'no win, no fee' approach became his trademark. Record industry insiders began to fear his blunt-speaking tenacity, and celebrities began to recommend him. Klein regarded himself as a shrewd and tenacious businessman, exampled by him having a modified bible quote on his desk, reading: "Though I walk in the shadow of the valley of evil, I have no fear, as I am the biggest bastard in the valley."

Sam Cooke

Following the death of his son in 1963, Sam Cooke started to take control of all aspects of his career. He demanded his own record company. Klein became his business manager (a role which never previously existed), someone who would take the artist's side in negotiations with the recording industry. He secured an unprecedented agreement, with Cooke starting a new label (Tracey Records) that would own the rights to all of his future recordings (it would be distributed, at first, by RCA), site fees, gate revenues for concerts, 10 percent of all records sold, and back royalties.

When Cooke died in 1964, his wife Barbara became the owner of Tracey Records. She later sold these rights to Klein.

Cameo Parkway

Cameo Records was formed in 1956 and Parkway, a subsidiary, was formed in 1958. They were based in Philadelphia and specialized in pop music for the teen market. They had run out of hits by 1964, but struggled on until 1967, when Klein bought them, together with rights to music by The Animals, Herman's Hermits, Bobby Rydell, ? and the Mysterians, Chubby Checker and recordings produced by Mickie Most.

The Rolling Stones

In 1965, Klein replaced Andrew Loog Oldham as business manager of The Rolling Stones. Mick Jagger had studied at the London School of Economics and was initially impressed enough with Klein's business skills to recommend him to Paul McCartney. Not long after, however, Jagger started to doubt Klein's trustworthiness. By the late 1960s the Stones decided to fire Klein, and set up their own business structure in 1970; however, a legal settlement meant giving Klein the rights to most of their songs recorded before 1971. Klein's ABKCO label released the rarest of all Stones albums, Metamorphosis (1975). By the late 1990s, some of the 1960s albums were becoming hard to acquire on CD. Finally, in 2002, Klein's son Jody oversaw a remastering of the 1960s albums, to much acclaim. Outside the Americas, they are licensed to Universal, now owner of their original home, Decca.

The Beatles

During the filming of Rock and Roll Circus, Klein and John Lennon met casually, but did not discuss business. Following the death of Brian Epstein in 1967, The Beatles had been without a manager per se, although NEMS, headed by Epstein's brother Clive, had been taking care of day-to-day business, with Peter Brown acting as liaison to both the Beatles and the Epsteins, and Paul McCartney steering the band artistically. Without a performing schedule, and with recording and filming dates in their own hands, the Beatles had not needed a traditional kind of manager. They had, however, gradually lost many of the people Epstein had made business deals with early in their career, such as music publisher Dick James and financial adviser Dr. Walter Strach, which had secured the band financially. They were used to asking for something to be done, without thinking of the price; much of Apple Corps had been set up in this way. Epstein had been the one to put the brakes on spending, talk over practicalities, and say "no". This had been all but forgotten. Without a damper, the band had overspent, and over-trusted, and problems arose.

By 1969, Apple Corps was in a financial mess, and it was becoming obvious that a business brain was needed to sort things out. Several names were considered, including Lord Beeching. Paul McCartney favoured Lee Eastman (father of McCartney's wife, Linda) as the man for the job, a suggestion that did not sit well with the other three Beatles, as they felt that Eastman would be batting for McCartney's interests ahead of those of the rest of the group. Klein contacted Lennon after reading his press comment that the Beatles would be "broke in six months" if things continued as they were. Klein was willing to break precedent, and only take a commission on increased business; if Apple continued to lose money, he would be paid nothing.

After a meeting at Klein's suite in the Dorchester Hotel (opposite London's Hyde Park), where Klein impressed Lennon with both his in-depth knowledge of Lennon's work (he could quote lyrics from all of his songs) and his "streetwise" attitude and language, Lennon convinced George Harrison and Ringo Starr that Klein should take over instead. McCartney agreed to pose for photographs with Klein as a show of unity, pretending to sign a new contract, but he never put his signature on the paper. This fundamental disagreement about who should manage them, fueled by a decade-long build up of resentments and insecurity about other matters such as power and influence within the group, was one of the key factors in the eventual break-up of the Beatles.

In 1969, Klein re-negotiated their contract with EMI, granting them the highest royalties ever paid to an artist at that time; 69 cents per $6-7 album. In exchange, EMI was allowed to repackage earlier Beatles material as compilations, which Brian Epstein had not permitted. Klein oversaw the issuing of the single "Something"/"Come Together", at a crucial point when Apple needed income. He helped rescue the abandoned Get Back project (released as Let It Be), by bringing Phil Spector to England to work with the band. He also transformed office habits at Apple, installing a time clock for the staff and insisting meals be pre-ordered from the building's kitchen (instead of cooked on demand). Klein slashed expenditures at Apple, canceling payouts and charge accounts for many Beatles associates, and friends of friends, who had worked or consulted for the company.

On the other hand, Klein also managed to alienate many of the people who had previously been part of the Beatles's business and personal circle, with his abrasive style of management and negotiation. His cost-cutting measures at Apple included what was considered by some as "cold-blooded" firing of many of the employees that had flocked to the band's experiment in "western Communism" (including the erratic Magic Alex, and Epstein's old friend Alistair Taylor). Klein also closed the Zapple Records imprint. He spoke occasionally at Apple and Beatles press conferences; a reporter for the London Evening Standard remarked later that Klein "must have set some kind of record for unprintable language" at one such conference. He was also unable to save Northern Songs from a buyout by ATV, which took away ownership of nearly all the band's song copyrights.

McCartney continued to distrust Klein, though admitting to him at one point "If you are screwing us, I don't see how." Following their informal agreement to split in late 1969, he eventually sued the other three Beatles for what he called 'a divorce', and the Beatles as a business unit came to an end. McCartney has stated he chose to legally dissolve the Beatles rather than allow Klein to milk and diminish their artistic legacy, which (of all the Beatles) McCartney was most passionate and protective.

Solo Beatles

Klein helped Lennon and Ono with their film Imagine, and helped Harrison to organise the Concert for Bangladesh. It was here that his reputation started to unravel. Rather than prearrange matters with UNICEF, Klein waited until after the concert to approach them, leading to questions about the proceeds, and finally a US tax investigation. While a check was cut at the time, additional proceeds meant for UNICEF were frozen in an escrow account until the 1980s. Also, Klein had sided with Harrison in believing Yoko Ono should not perform at the concert, wanting Lennon to appear without her, causing Lennon to cool on Klein. (He later took out his feelings toward Klein in "Steel And Glass", which appeared on his 1974 album Walls and Bridges.) After several suits and countersuits, Klein settled for a final payment of £3.5 million in 1977. In 1978, he was parodied by John Belushi as "Ron Decline" in the TV film All You Need Is Cash (which spoofed the Beatles' story).

It turned out Klein and Harrison were not completely finished with each other. While Klein had supported and advised Harrison during the first phase of his "My Sweet Lord" lawsuit, Klein later bought Bright Tunes, the music publishing company that sued Harrison, thus becoming his legal opponent. A judge ruled later that Klein had unfairly switched sides in the lawsuit, and it counted against Klein in court. (Harrison ultimately became the owner of "He's So Fine", the song at the heart of the case.)

Phil Spector

Klein bought the rights to music produced by Phil Spector, such as the Philles Records and Phil Spector International catalogs, in the 1980s.

The Stranger films

Klein produced a trilogy of spaghetti westerns starring and written by Tony Anthony copying Clint Eastwood's The Man With No Name. A Stranger In Town and The Stranger Returns were released in the USA by MGM. A dispute with MGM over the last one, The Silent Stranger, led to it not being released for seven years after production. Klein and Anthony also collaborated on the film Blindman featuring Ringo Starr as a Mexican bandito. Klein also appeared briefly on camera, in a similar role.

Alejandro Jodorowsky films

Lennon, after seeing and being impressed with Chilean director Alejandro Jodorowsky's El Topo, persuaded Klein to buy the rights and bankroll Jodorowsky's next film, The Holy Mountain (1973). The Jodorowsky-Klein collaboration was an artistic success, but plans for a follow-up never materialized. Witnessing the commercial success of hard-core pornographic films, such as Deep Throat and The Devil In Miss Jones, which broke through to the mainstream, Klein saw similar potential in Pauline Réage's bestseller The Story Of O, but Jodorowsky walked out on the deal. In retribution, Klein withdrew every print of El Topo and The Holy Mountain, and turned down all subsequent requests by film festivals from around the world to show them.

Both films were withdrawn from circulation for more than 30 years, with sporadic, bootleg appearances on video - usually of poor quality. Jodorowsky publicly endorsed these pirated copies of his work, since he was unable to show or distribute it legally. The dispute over the films ended in 2004, when Jody Klein contacted Jodorowsky and offered a reconciliation. In response to the films' re-appearance, both the Cannes and London Film Festivals currently organise gala screenings. Both films are also available in DVD format.

The Verve

On their song "Bittersweet Symphony", the British rock group The Verve sampled an orchestration from The Rolling Stones' "The Last Time", the rights to which are owned by Klein's ABKCO Industries. Before the release of the album, The Verve negotiated a licensing agreement with Klein, who administers The Stones' catalog, to use the sample (at least the composition rights to the sample). In 1997, The Verve's album Urban Hymns peaked at No. 23 on the Billboard charts. A bitter legal battle ensued, resulting in The Verve turning over 100% of the royalties to ABKCO. Klein argued that The Verve had violated the previous licensing agreement by using too much of the sample in their song. Capitalizing off the success of the song, Klein licensed The Verve's "Bittersweet Symphony" to Nike, who proceeded to run a multimillion dollar television campaign using The Verve's song over shots of its sneakers. Klein also allowed the song to be used in advertisements for Vauxhall automobiles. (Additionally, though the song was authored by The Rolling Stones, the Andrew Loog Oldham Orchestra performed the sampled recording, and also filed suit upon the success of the song. When "Bittersweet Symphony" was nominated for a Grammy Award, Mick Jagger and Keith Richards of the Rolling Stones were named as the nominees, and not The Verve).


1 comment:

Sam's Neph said...

Thanks for focusing on an integral (though somewhat infamous) part of Beatles' history and the group's involvement with Allen Klein. However, I may be able to shed some light on a few misconceptions:

First of all, in my book “Our Uncle Sam: The Sam Cooke Story From His Family's Perspective,” Bobby Darin's former manager Steve Blauner claims the audit Klein did for Bobby "turned up practically nothing," meaning the whole $100,000 claim is myth. He described the relationship with Klein as "a disaster."

As for Sam Cooke, he took control of his career well before he met Allen Klein in 1963 with the formation of SAR Records in 1959 and his unprecedented (by an African-American artist, at least) retention of his publishing rights through RCA in 1960. Truth is, Sam never trusted Allen Klein and refused to extend a contract to Klein to become his Business Manager.

Tracey Limited, named after his young daughter, was set up to be a tax shelter for Sam's business holdings. Tracey was a tax shelter for Sam alright, but for reasons that left him astonished--he found out just days before his death that the company was fully owned by Allen Klein, and that Sam's title of President and status of Director had been removed. In “Our Uncle Sam," I include documents that highlight these not-so-subtle moves.

Though Sam was the first, he certainly wasn't the last. Klein owned similar tax-shelter companies for The Rolling Stones (Nanker Phlege Music, Ltd.), The Dave Clark Five (Eros International Corp.), and Herman's Hermits (Reverse Producer's Corp.). Peter Noone of the Hermits said he had no problem with Klein's involvement "until the checks stopped coming"--circa 1967.

Allen Klein changed the name of Tracey Limited to Tracey Records Limited less than a month after Sam's funeral in December of 1964, and by June of 1965 filed paperwork declaring himself President of Tracey Records Limited. As a result, Sam Cooke's brothers and sisters have never received direct royalties from their brother's music, totally contradicting Sam's intent. What Sam's widow Barbara eventually sold to Klein was her stake in Sam's publishing rights, not her ownership in Tracey.

I hope that at least helps clarify some of the earlier part of Allen Klein's career.

Erik Greene
Great-nephew of Sam Cooke