Hunky Dory (Who Knew)

by Laurence Myers

  Allen Klein arrived in London and asked Mickie and me to meet him at the Grosvenor House, a swanky hotel on Park Lane. His reason for asking us to go to where he was staying was that he had sent his clothes to the laundry. It sounded a bit strange, but so what. At the appointed time, the door to Allen’s impressive suite was opened by his wife Betty: a petite, pretty brunette. She ushered us into the suite’s parlour, where Allen sat wearing a bathrobe and holding a pipe. Allen was in his early thirties, and even with the pipe looked younger than I had expected for a guy who was powerful enough to get pop artists into movies. The pipe was not alight, and when we became closer he confessed that it was just a prop. Allen thought it made him look wise and he could suck on it if he needed a moment to think before answering.

  He did not get up but said, ‘Hi. Would you like some tea?’

  We said, ‘Yes, please’, and exchanged pleasantries until room service delivered the refreshments. Allen gave the waiter a stack of silver coins from a row of such stacks that he had lined up on a table beside his chair. It was an obviously over-generous tip and I think that we were supposed to be impressed, but we were not. Betty left the room after serving the tea and Allen said, ‘Mickie, I can get you a million dollars.’ Now we were impressed.

  What followed was, for me, a master class in the intricacies of the record industry. Allen knew the cost of every aspect of the manufacture and distribution of records. In 1964 the retail price of a single was six shillings and four pence, about thirty pence in today’s money. The cost of manufacture was maybe five old pennies. Even taking into account the retailer’s margin, royalties for music copyright and the cost of physical distribution, the record company’s profit margin was about fifteen old pennies; they could easily afford to pay artists and producers much more than the few pennies they did. As mentioned above, The Beatles were being paid one old penny per record, and even this was subject to arcane deductions. Allen made us realise what huge potential power a successful artist had.

  Mickie’s deals for The Animals and Herman’s Hermits were with EMI. Allen offered to renegotiate the deals so that Mickie would be guaranteed that million dollars for future productions. During the conversation it became clear that Allen had decided that I was the key to Mickie agreeing to take him on and he gradually switched his sales pitch from Mickie to me. We said little as he talked in thousands and millions and I told him that we would think about his million-dollar proposition. We thanked him for the tea and left.

  Once outside the door, we practically fell about laughing at the thought of Mickie getting a million dollars, a sum equal to approximately ten million dollars today. Mickie was doing well, with an income measured in the tens of thousands, not millions. He lived in a small suburban house in Wembley, probably worth about four thousand pounds. I was drawing twenty-five pounds a week from my practice and gave Marsha eight pounds a week for housekeeping. The average wage was less than one thousand pounds a year and you could buy a nice family house in Chelsea or Hampstead for less than fifteen thousand pounds, so a million pounds was a lot of money to both of us.

  In the 1960s, while getting a record deal was big, getting a deal with EMI – the leading record company in the UK – was huge. They had artists like Gerry and The Pacemakers, Helen Shapiro, Billy J Cramer, the Dave Clark Five and, of course, The Beatles. In those days, EMI presented artists with a standard contract that was printed, thus discouraging thoughts of changing it. To many, EMI was regarded as a major institution. Nobody tried to change their printed insurance policy with Prudential or the printed conditions of a Barclays Bank overdraft. Naive artists and equally naive advisors just checked the blank spaces in EMI’s printed contracts, where the basic royalty rate was inserted, and artists eagerly signed the forms.

  Not only were the basic royalty rates very low, but the small print in the contracts reduced them even further. Royalties were paid on 90 per cent of sales, because historically records had once been made from very breakable shellac, and there was an allowance made for broken records. The contracts were not changed when records began to be manufactured with more durable vinyl. Also, royalties in overseas sales were halved – an echo of music-publishing practice. No royalties were paid on stocks of records sold after they were deleted from the current catalogue … and so it went on. All recording costs were deducted out of the pitiful royalties that were paid, even if the record companies used their in-house studios. An artist had to sell an awful lot of records to get a meaningful cheque. Later on I realised that the value of a hit artist had an ever-greater benefit to a record company than the immediate profit. In the sixties, a large proportion of sales were through independent record shops. Record companies had sales reps who called on the shops on a regular basis and if the salesman had a hit record, it was easier to persuade the owner to take other records that were not such certain sellers. The shop owners had to settle their accounts if they wanted new releases, so a hit artist got the record company’s bills paid and attracted other artists to the label.

  Mickie believed that Allen was a bit of a joke, making ridiculous promises that he could not fulfil, but I had been impressed by his knowledge and his lack of fear in taking on ‘the big boys’. I returned to Grosvenor House to meet Allen again. This time he was dressed and had dropped the pipe prop. He explained more about the power of artists. At that time EMI did not have their own company in the USA. They licensed their product to MGM Records, a subsidiary of MGM Films. ‘The Animals and Herman’s Hermits are the only two artists MGM have that sell any records. You’re keeping MGM Records alive.’ It sounded ludicrous. MGM! MGM who made all of those musicals that I used to go to watch at the Astoria cinema opposite my dad’s sweetshop. It was unbelievable.

  By now I could see that confronting EMI with the knowledge of their chicanery would certainly get their attention. However, as I reminded Allen, Mickie had entered into binding agreements with EMI, which they had no legal obligation to change. This did not seem to be of any concern to Allen at all. He offered to take nothing from any deal made for Mickie if he did not get him the million dollars, and a 20 per cent commission if he did. I told him that I would not permit Mickie to enter into any written agreement at this stage, and that I would have to attend all meetings.

  I told Mickie that Allen had agreed to a no-win-no-fee deal, and that I would be at all the relevant meetings. Mickie agreed that Allen should go ahead.

  I wanted to know Allen better. He was a fascinating man, clearly extremely bright, and his analysis of the music business made absolute sense to me. I invited him and his wife Betty to dinner at our home. Marsha cooked a great meal and the four of us got on extremely well. We laughed a lot and Allen and I found some common ground in our upbringing. We were both from very modest Jewish family backgrounds and had found our way into the music business via accountancy, but our childhoods were very different. My brother Roger and I were brought up by loving parents, and our financial circumstances were no different from our friends’ and did not seem to us to be a hardship. Allen was one of four children. His mother had died when he was nine months old, his father could not cope with a baby and Allen, aged barely a year, was sent to live with his grandparents. When he was four he and his sister Naomi went to Newark’s Hebrew Orphanage and Sheltering Home for five years, until their father remarried and was able to take them back. Understandably, this experience would have a lasting effect on Allen and I believe it was the breeding ground for his exceptional drive and ambition.

  We definitely struck a bond and the next day Allen called to thank us for dinner and said that the four of us should go to dinner. ‘Your town, you choose a restaurant.’ Marsha’s father, Jack Bloom, used to take us to Les Ambassadeurs, a very expensive members’ dining club off Park Lane, where they had dinner dancing (it was fifty years ago). The club was housed in what used to be the home of a Rothschild and it reeked of elegance. If I wanted to impress Allen, and I did, this would do it. I asked Jack to arrange a booking at Les A. Always keen to
advance my business career, he promised a great table and generously offered to charge the bill to his account. I declined, explaining that the Kleins were reciprocating our invitation to dinner at our home and therefore would pay for the evening.

  On the way to the restaurant, Marsha made me promise not to pick up the bill. ‘He’s the rich guy with his suite at the Grosvenor House and it was his idea that we go to dinner. We have entertained him at our home and obviously it’s his place to pay for us. Don’t you be a big shot, we can’t afford it.’ I promised not to pay.

  Meanwhile, Betty was having a similar conversation with Allen. She had made enquiries about Les A and had been told it was the most expensive restaurant in London. She was not sure that Allen had enough money to pay for their suite at the Grosvenor House and they certainly couldn’t afford dinner for four at Les A. ‘The Myers wouldn’t be so bad-mannered as to choose the most expensive restaurant in town and expect us to pay. Don’t be a big shot, we can’t afford it.’ Allen promised not to pay.

  As arranged by Jack, we were ushered into the restaurant by William, Les A’s famous maître d’ who, no doubt on Jack’s instructions, fussed over us and seated us at the number one table by the dance floor. Once again we had a fun time together, and when the meal was finished and it was time to call for the bill Marsha was furiously kicking me under the table to make sure that I did not call for the bill. On the other side of the table Betty was similarly abusing Allen’s knee. There was an embarrassing few moments while I carefully avoided the waiter’s eye.

  Suddenly Betty said, ‘Allen, let’s dance.’ Allen hated dancing but before he could protest, she dragged him away. Not sure what to do, I looked at Marsha.

  ‘Don’t you dare call for the bill,’ she said with wifely authority.

  ‘Right,’ said I. ‘I’m going for a pee.’

  Thinking how clever I was to have outwitted Allen, I delayed my return until I could hear the song finish, waited for a few minutes to give Allen a chance to return to the table and call for the bill, then sauntered back to our table. But no. The band had started a new song and Allen and Betty were still dancing. The waiter rushed over to pull out my chair and I had no alternative other than to ask for the bill. Betty told me that she looked over Allen’s shoulder, saw me pay, and gave Allen permission to stop dancing. On the way home Marsha asked me why the hell I paid, to which I replied. ‘Allen could dance all night, how long could I pee for?’

  This was a story that we all told time and time again whenever we were asked about how we first became friends. It was also the story I told when I spoke at Allen’s funeral in July 2009. We had been friends for forty-five years and I owed him much. Allen’s last few years were cursed with Alzheimer’s and it was heartbreaking for me to see this giant of a personality mentally waste away.

  In 1964 I was excited at the thought of going with Allen to EMI to see if he could get Mickie his million-dollar deal. Mickie was still dubious and nervous that Allen would spoil his relationship with EMI, but having spent time with Allen I was confident that he would pull it off. Ron Tudor, EMI’s managing director, and Clive Kelly, the company’s in-house head of legal affairs, greeted us politely.

  ‘Would you like some tea?’ asked Clive.

  ‘No,’ snapped Allen, ‘We don’t want tea.’

  I was shocked by his rudeness; it was a bit like refusing to shake Clive’s hand. I was expecting a little warm-up before the main event but Allen went straight for the jugular.

  ‘Mickie’s not going to make any more records for you.’

  ‘I beg your pardon?’ said Ron.

  Allen repeated it again more slowly. ‘Mickie is not going to make any more records for you.’ Then he added, ‘No more records from The Animals or Herman’s Hermits.’ The two executives could not have been more shocked if Allen had stood up and peed on the carpet.

  ‘But we have a contract with Mickie,’ said Clive, definitely a little red-faced.

  ‘You may or may not have a contract, that is for a court to decide, but you’re not getting any more records.’ He paused. ‘Now we’ll have a cup of tea.’

  This was the essence of Allen’s standard negotiations. Even with a binding contract a record company could not enforce personal services. They could stop an artist recording for any other company, but they could not make the artist record for them. Even if they could, they would have no control over the quality of product they had forced the artist to record. It was a huge bluff, but it made no sense for a record company to call it. If they wanted to keep the artist, they simply had to pay more, which they could easily afford to do.

  I subsequently used the formula with great success many times myself when renegotiating clients’ contracts or doing a deal for my own company Gem. I was a little less brash, substituting ‘My client is not happy’ for the blunt ‘You’re not going to get any more records’. But the effect was usually the same. After a while I became a gunslinger whose reputation was so fearful he never had to take his gun out. As I walked into some negotiations with major record companies, they would produce a Laurence Myers draft contract that I had negotiated for a previous artist. It contained all the revisions that I required and all we had to talk about was the basic royalty rate and the advance. I learned a lot from Allen, but I worked out for myself what was probably the most important aspect of dealing with major record companies.

  We all know that politicians’ decisions are for the most part based on what they need to get themselves re-elected rather than what is good for the long-term future of the country. Well, the same premise applies to most of the heads of record companies. They put their personal need to hit their annual targets above the long-term interest of the companies. I was invariably able to negotiate the return of ownership of the copyright in the recordings five years after the contract ended, because the person that I was negotiating with believed that they would be long gone from the company by then. This is something that my grandchildren should really be happy about. The income from the catalogue that I retained has diminished over the years, due in no small part to streaming, but after I go to the Great Recording Studio/Theatre/Film Set in the Sky, they will still have something to thank Papa for, when the royalty statements come in.

  Allen indeed renegotiated a deal for Mickie that came to a million dollars, albeit advanced over years and dependent on Mickie delivering artists in addition to The Animals and Herman’s Hermits. He tossed aside the EMI printed contracts and agreed a new one line by line. Gone were the spurious deductions from royalties, and the rate payable to Mickie was increased considerably. Mickie had the rights to The Animals’ and Herman’s Hermits’ recordings under contracts made with those artists before I became involved with him. He was in no hurry to pass on to those artists more favourable terms. That could be done when their representative told us that ‘the artists were unhappy’.

  Allen’s plan was to be an owner of some of the masters that were the subject of his renegotiations. His greatest ally in achieving this was HM the Queen, or more specifically, Her Majesty’s collectors of taxes. In 1964 the highest rate of tax was 83 percent and in some cases 98 per cent. People who could flee, like Michael Caine and Sean Connery, fled to America, but most people had to make such arrangements as they could to legally minimise their tax liability.

  Allen proposed that the rights to artists’ recordings would be split between the USA and the rest of the world. He would be the owner of the rights in America. The Animals and Herman’s Hermits were re-licensed to MGM on much improved terms and future artists that Mickie would produce were licensed for America to CBS Records. Allen’s company would retain 20 per cent of advances and pay the balance to Mickie over a period of years. The rest of the world income was also spread over a number of years, but Mickie retained the ultimate rights through the ownership of the company that we set up to deal with them. It was legally tax-effective and I advised Mickie to do it.

  After the deal was struck, Allen’s family and mine carried on o
ur transatlantic friendship. On 20 July 1966, Peter – our second son – was born. This was shortly after Betty Klein gave birth to their daughter Beth. We had sent Betty a small but tasteful bunch of congratulatory flowers. Allen, as ever over the top, sent six-dozen red roses to Marsha in her room at the London Clinic. The nursing staff thought that she was a major film star.

  More kindness followed. In 1967, my nineteen-year-old brother Roger was working with me at Goodman Myers and was very involved with a girlfriend. She was nice enough, but he realised that he was too young to get seriously involved. I called Allen who, without hesitation, gave Roger a job in the New York office of his firm ABKCO (Allen And Betty Klein COmpany) for a couple of months, which gave him a reason to break up with his girlfriend. He loved living in New York, and it was a great experience for him. A few years later, he met Lee Spencer Morris, an attractive young lady who was working for a UK country music promoter. I knew that this was real love because Lee was going to work at Midem and Roger asked me to look after her, which I did. Roger and Lee married in 1974.

  Allen continued to be a good friend to me until he died. He has been much maligned over the years for his perceived unethical dealings with the Stones and The Beatles. The day before I spoke at his funeral there were adverse comments in lots of the press and a particularly vicious and damning obituary from Ray Connolly in the Daily Mail. In my eulogy, I recited my dishons, hons and honours theory and how it very much applied to Allen. Allen had certainly gone through all three of those stages and his honour came when he was inducted into the Rock’n’Roll Hall of Fame. I also told the story of Allen sticking me with the bill at Les A., which got a laugh. The service was attended by hundreds of mourners, including the great, the good and a few of the not-so-good in the music industry. At the end of the service both Yoko Ono, John Lennon’s wife, and former Stones manager Andrew Oldham came up to me and thanked me for my comments, saying that I had summed up Allen’s character completely.