Northern Songs - First Sale

First Sale

After Epstein's death on 27 August 1967, Lennon and McCartney sought to renegotiate their publishing deal with James. In 1968 they invited James for a meeting at Apple Records; filming the encounter and acting brusquely towards him. As a result, already-cool relations between James and the individual Beatles became even cooler. Early in 1969, James and Silver abruptly sold their shares in Northern Songs to ATV for £1,525,000 ($2,500,000), giving the four Beatles no notice, or the chance to buy them out. Lennon learned of the sale from a morning newspaper during his honeymoon with Ono, and immediately called McCartney. Lennon and McCartney attempted to gain ownership of the publishing rights, but their bid to gain control, part of a long and acrimonious fight, ultimately failed. The financial power of Grade, their adversary in the bidding war, ensured that the music written by the two Beatles passed into the control of ATV. Lennon and McCartney were offered £9,000,000 ($14,755,500), for their remaining shares by ATV on 5 April 1969, but turned down the offer.

Klein then attempted to set up a deal for Apple Corps to buy ATV out, which was stopped by attorney John Eastman—Linda McCartney's brother, and son of McCartney's future business manager, Lee Eastman—who sent a letter to ATV informing them that Klein was not authorised to act on Apple's behalf. Note: Although technically true, Klein was the de facto manager for Lennon, Harrison and Starr, and also had McCartney's verbal go-ahead for the deal. ATV backed out rather than risk being pulled into litigation. Next, a block of investors who owned a small, but crucial, percentage of shares were lobbied by both sides to sell out, or cooperate with them to take control of Northern Songs. Unfortunately, during negotiations, Lennon expressed his absolute disdain for businessmen, saying, "I'm sick to death of being fucked about by men in suits sitting on their fat arses in the City!", which immediately pushed the investors to ATV's side.

Under their publishing contract with Northern Songs, Lennon and McCartney were legally bound to continue their songwriting until 1973. The solution, if they could not gain control, was to sell out to ATV, while still receiving the writer's royalties from their published songs. Lennon and McCartney sold their stock (Lennon's 644,000, and McCartney's 751,000, as he had secretly bought additional shares) in October 1969, for £3.5 million ($5,738,250). Starr chose to keep his shares (0.8%), but Harrison had already sold his 40,000 shares (0.8%) in June 1969, saying,"and paid the capital gains tax", referring to his song, "Taxman".