Allen Klein - The Beatles

The Beatles

During the filming of The Rolling Stones 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 were without a manager as such, 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 with whom Epstein had made business deals 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 having to think 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" when required to do so. This had been all but forgotten. Without a damper, the band had overspent, and overtrusted, 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. McCartney favoured Lee Eastman, his father-in-law, as the man for the job, a suggestion ill-received by the others, as they felt Eastman would give McCartney's interests preference. 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, however, never signed a contract agreeing to Klein's management. (A well-known photograph of Klein, Lennon, McCartney, and Starr together is actually a photo of the Beatles, including McCartney, signing a renegotiated contract regarding royalties from EMI. See paragraph below.) This fundamental disagreement about who should manage them, fueled by a years-long buildup 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.

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 to conclude the troubled Get Back project (released as Let It Be), by bringing Phil Spector to England to work on the tapes. 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, cancelled 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' business and personal circles, with his abrasive style of management and negotiation. His cost-cutting measures at Apple included what was considered by some to be the "cold-blooded" firing of many of the employees who 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, supervised by McCartney's friend, Barry Miles. 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 that he chose to legally dissolve the Beatles rather than allow Klein to milk and diminish their artistic legacy.