Beatles vs. Stones

by John McMillian

  Klein and Epstein met in London in 1964, ostensibly to discuss the possibility that Sam Cooke might support the Beatles on an upcoming tour. Soon after the two began talking, however, Klein broached a different topic: the possibility of a business relationship. Epstein’s assistant, Peter Brown, recalled the meeting. “Klein said that he heard the Beatles’ low royalty rates from EMI were ‘for shit’ and that he could renegotiate their contracts. Brian was royally offended at the suggestion that someone else should do his job for him, and he had Klein shown to the door.”

  If Epstein had hoped to discourage Klein, or embarrass him, then he underestimated the man. Klein soon began telling people that it was only a matter of time before he would “get” the Beatles. “[Epstein] always thought Klein was a big threat to him,” said Danny Betesh, a music industry veteran.

  As if to make Brian even more insecure, Paul used Klein’s success against Epstein. One time in a crowded elevator, surrounded by the other Beatles, Paul said to him, “Yeah, well Klein got the Stones a quarter and a million, didn’t he? What about us?”

  It was a fair question, but Paul later regretted the cutting way he put it across. Epstein was always so sensitive, and he desperately craved the Beatles’ approval—but perhaps never more so than during the last months of his life. His five-year management contract with the group was set to expire in October, and among his associates, he fretted endlessly about the possibility that the Beatles might cut him loose. Few of those in Epstein’s circle thought he had much cause for worry—probably he would have just been asked to take a lower commission—but who could say for sure?

  In November 1966, Epstein was forced to swat down a newspaper rumor saying that the Beatles had already begun meeting with Klein to discuss their future management. Then in early 1967, Klein ensconced himself at London’s Hilton Hotel and boasted to reporters that he was destined to manage the Beatles. His remarks caused such a stir that Epstein denounced them with a formal press statement. Still, the Stones’ new manager never gave up. “The whole time Allen was with the Stones he was trying to get the Beatles interested in him,” said Sheila Klein Oldham (Andrew’s ex-wife). Mickie Most, the British record producer, said much the same. “Allen got very obsessed with signing the Beatles. The Stones were much more aggravation than he counted on.”

  About seven weeks before Brian died, the Beatles released “Baby, You’re a Rich Man,” the B-side to their number one hit “All You Need Is Love.” George Harrison dubiously claimed that the song touted an uplifting, Eastern-tinged message: the idea that anyone can be “rich” because richness comes from within. But Brian likely surmised that “Baby, You’re a Rich Man” was an unfriendly song, intended specifically for him. One can only hope (perhaps faintly) that he didn’t notice the despicable way that Lennon corrupted the song’s chorus as it faded out. Instead of singing “Baby you’re a rich man too,” he sang, “Baby you’re a rich fag Jew.”

  Baby you’re a rich fag Jew. It wasn’t the first time Lennon had attacked Brian that way, but that didn’t make it any less outrageous, especially considering everything that Brian had done for the Beatles. Though it is hard to imagine now, showbiz managers in the 1960s looked after their clients a bit like parents did their children. That was considered normal. In fact, the Beatles were so dependent upon Brian that they hardly ever carried their own money. Instead, whenever they wanted or thought they needed something—whether it was new set of guitar strings or a fancy new car—they would have to ask their manager. Brian controlled the entire group’s purse strings. He ensured that everyone was taken care of and, when possible, he allowed for this or that extravagant expense. It was also his responsibility to be “fair” when he doled out the money (some got more than others) and to be mindful of his clients’ long-term financial health.

  The Stones had a similar relationship with Klein, only Klein tried to ingratiate himself with his clients by presenting himself as the “cool dad” on the block—the most understanding, generous, and indulgent of all possible managers. “If you wanted a gold-plated Cadillac, he’d give it to you,” Richards marveled. “When I rang and asked for £80,000 to buy a house on Chelsea Embankment near to Mick’s, so that we could wander back and forth and write songs, it came the next day.”

  What the Stones did not realize, however, was that they had already been swindled. When Klein came on board as comanager of the Stones in August 1965, the Stones (plus Oldham) had already set up their own company in the UK called Nanker Phelge Music. Klein then promptly set up his own company, called Nanker Phelge USA—he was its president and sole stockholder—and it bore no relation whatsoever to the other Nanker Phelge. When Klein won that widely publicized $1.25 million advance from Decca, the money went to his coffers, not theirs. Furthermore, according to the fine print, Klein wasn’t required to release that money to the Stones for twenty years. (Meanwhile he invested it in General Motors stock and kept the enormous profits to himself.) Even more substantially, Klein tricked the Stones into surrendering the publishing rights to all of their recordings. It was an incredibly audacious scam. One would be hard-pressed to imagine a scenario in which a group as hugely successful as the Rolling Stones would knowingly surrender control of the copyright and master tapes of all of their songs. But Klein wound up owning the North American rights to everything the Stones produced until their contract with Decca expired in 1971. In fact, it was Klein—not the Rolling Stones—who made a fortune from the Stones’ all-time bestselling record, the compilation double album Hot Rocks 1964–1971. Later on, when Klein was forced to justify what he had done, he said it was a protective measure to shield the Stones from the British income tax.

  The Stones eventually launched numerous lawsuits against Klein and his company, ABKCO (the Allen and Betty Klein Company), and it would take seventeen years before they reached a final settlement. Long before then, Klein cut off their golden spigot. In his memoir, Bill Wyman produced a series of telex exchanges from 1968 that show just how vexed and frustrated the Stones became over their inability to get Klein to release any of their money. A lengthy June 19 missive from Fred Trowbridge, the band’s London bookkeeper, indicated that the Stones’ travel agents were threatening legal action if they weren’t paid, that they owed money to their publicist (Les Perrin) and, to top it off, various overdraft fees were piling up. “We have made numerous attempts to contact you on the telephone,” Trowbridge wrote. “The position has now reached [a] crisis point. I need money now. . . . Yes Allen I need £12,995.10 (pounds), now.”

  Later that summer, the Stones’ road manager and pianist, Ian Stewart, had to buy a new Hammond organ to replace his old one, which had been destroyed in a fire. But he couldn’t get Klein’s office to reimburse him. In August, Jagger formally asked Klein to put £125,000 in his account for a house he was trying to buy, but two months later the money still hadn’t been received. “What is happening on Mick’s checks re his properties[?],” read one communiqué, “these are most urgent.” By the fall, the cables from London to New York were growing increasingly frantic. On October 15, Brian Jones “urgently” requested £6,000 he needed to pay his lawyers. On October 21, Charlie Watts wrote, “I have not yet received my $5,000. Please telephone me back.” On October 26, Trowbridge wrote again: “Berger Oliver [a London law firm] are screaming for the balance of Bill’s money. What is happening to those checks? What about Brian’s £6,000?” An October 28 letter to Klein said, “We are still awaiting . . . funds in order to settle the £13,000 tax liability that is now overdue in respect of the past remunerations for Rolling Stones Ltd.” The most derisive cablegram, however, came directly from Mick: “The phone and electricity will be cut off tomorrow. Also the rent is due. I am having to run the office despite your wishes. If you would like to remedy this, please do so.”

  When Klein introduced himself to the Stones in 1965, everyone in the band was still in their early twenties, except for Bill Wyman, who was nearly thirty. As Wyman later explained in his memoir, he was the
only one in the group who was initially skeptical of Klein. “I didn’t trust him and he knew it. ‘Why don’t you like me, Bill?’ he would say on many occasions. ‘Because I don’t trust you, Allen,’ I would reply.” But before long, Wyman was mollified (at least temporarily) by a “fat check . . . the biggest payout [he’d] ever had,” which he delightedly showed his wife.

  The only other Rolling Stone from whom one might have expected a bit of wariness was Jagger, the former economics student who nowadays is well known for his business acumen. But Marianne always felt that Mick became savvy about money only later on, as a result of the problems Klein caused. Initially, Allen struck Mick favorably. Mick was perhaps a wee bit uneasy about Allen’s gauche personality—his abrupt manners, slovenly appearance, and thick New Jersey accent—but it wasn’t a deal breaker. In fact, it has been said that Mick was so pleased with Allen Klein that he recommended him to the Beatles. Derek Taylor, Apple’s press officer, remembers Jagger telling the group, “Well, maybe you wouldn’t want to go on holiday with Allen, but he’ll take care of you.”

  Marianne Faithfull likewise remembers Jagger speaking positively about Klein to the Beatles, only she alleges that he did it falseheartedly. “Mick’s strategy in dealing with Allen Klein was fairly diabolical,” she wrote. “He would fob Klein off on the Beatles. Mick called up John Lennon and told him, ‘You know who you should get to manage you, man? Al-len Klein.’ And John, who was susceptible to utopian joint projects such as alliances between the Beatles and the Stones said, ‘Yeah, what a fuckin’ brilliant idea.’ It was a bit of a dirty trick, but once Mick had distracted Klein’s attention by giving him bigger fish to fry, Mick could begin unraveling the Stones’ ties to him. It was just a matter of time before the relationship was severed.”

  Was Mick capable of pulling off such a Machiavellian power move? Of course he was. (After all, this is a guy who once denied paternity of his own daughter and enlisted lawyers to give the runaround to the child’s mother, Marsha Hunt.) Besides, one only needs to look at the dates of the angry cablegrams that the Stones sent from London to New York to see that Faithfull’s account is completely plausible. Several requests for funds were sent in late 1968: just a few months before Klein met any of the Beatles. Also, the Stones’ accountants were not merely requesting money from Klein in this period. They also wanted information about the Stones’ tax returns (which likewise was not forthcoming). And why? Because the Stones had hired a London law firm, Berger Oliver & Co., to look into their financial situation. They had grown to distrust Klein so much that they decided they needed an outside appraisal of their financial situation. Around the same time, Mick was introduced, via his society friends, to Prince Rupert Loewenstein, a merchant banker who descended from the Bavarian royal family. After they became friendly, Mick hired him as his personal financial advisor. Loewenstein said that Mick felt that the Stones were in Klein’s “grip,” and that he had “done them in financially.” And Loewenstein agreed: “I was equally certain that he had been taken for a ride, and that I represented for him a chance to find a way out of a difficult situation.” He aimed to help the Stones extricate themselves from Klein as soon as such a move became feasible.

  Klein and John Lennon met for the first time on the set of The Rolling Stones Rock and Roll Circus, a film that the Stones released in December 1968, and that they hoped would be broadcast on the BBC. A year earlier, the Beatles had put out Magical Mystery Tour, an hour-long TV special in which they filmed themselves roaming the English countryside in a garishly painted charter bus with an assortment of oddball characters. The Beatles hoped that viewers would find the film clever and offbeat, but in fact, most people found it disconcertingly weird. One problem was that although Magical Mystery Tour was filmed in color, the BBC transmitted it in black and white. Another was that it aired in primetime on Boxing Day (the day after Christmas in England). Well-fed families that had gathered contentedly around their television sets expecting light entertainment from the Fab Four were witness, instead, to a largely improvised, phantasmagoric film with no discernible structure or plot. In one scene, Lennon—his hair slicked back with Brylcreem, wearing a crimson waiter’s jacket and sporting an off-putting pencil-thin moustache—uses a garden shovel to dump a huge mound of spaghetti onto an obese woman’s table. It was gross.

  When the Stones decided to make Rock and Roll Circus, they must have seen it as an opportunity finally to outperform the Beatles. They would just have to make a successful Christmas TV special. Michael Lindsay-Hogg, the Oxford-educated director who had already done promo clips for both the Beatles and the Stones, came up with the conceit: the Stones would simply put on a rock show in a circus environment. Mick thought it was a fabulous idea. Originally, they hoped to make Brigitte Bardot the circus ringmaster (in part because they figured it would have been a fine excuse to put her in a sexy costume and have her fondle a whip). She proved unavailable, however, so Mick assumed the role. Along with jugglers and clowns, the Stones were supported by host of musical acts, including the Who, Taj Mahal, Jethro Tull, and (most intriguingly) rock’s first bona fide supergroup, the Dirty Mac. That was the roguish moniker that Lennon chose for a group that featured himself along with Eric Clapton, Keith Richards (on bass guitar), and drummer Mitch Mitchell, from the Jimi Hendrix Experience. (“Dirty mac” was a slang expression, used to describe the type of trench coats favored by perverts.)

  It was the first time since the Beatles began that Lennon had played in public with anyone else besides the Beatles, and they did just two songs: “Yer Blues” (from The White Album) and then a five-minute blues jam that was supposed to be a showcase for Ivry Gitlis, the legendary Israeli violinist. Shortly after their song got underway, however, Yoko Ono wriggled out of a black canvas bag near the side of the stage and (with John’s encouragement) started screaming into the microphone—Aaaaaaaaaaahhhhhhhhh! Yeeeeeeeeeeee-eedeeeaaaaaaaahhhhhhhhhh! Aaaaaaahhhh Aaaaaahhhhh. Giltis tried to smile as he played along, while Clapton and Richards mostly just looked away. Later the filmmakers gave the song a title, “Whole Lotta Yoko,” as if she had been a planned performer. It was an unbelievably rude stunt—one that John and Yoko would never have dreamed of pulling on the Beatles—yet no one in the Stones’ camp said a word edgewise.

  Unfortunately, the filming was also marred by long delays—some of the cameras that Lindsay-Hogg imported from France kept malfunctioning, and several performances had to be shot and then reshot. The Stones didn’t take the stage until about 4:00 a.m., by which point many in the studio audience—who had been brought in around noon the day before—had left; those who remained were exhausted. The Stones were tired as well, and in addition to being tired they were rusty, having performed together only once in the previous eighteen months. Most agreed that show’s climactic song came off well: Mick sang “Sympathy for the Devil” with diabolic intensity, whirling and kneeling and ripping off his shirt to reveal a configuration of devilish tattoos that had been painted on his chest and biceps. Otherwise, however, the band seemed listless. Peter Swales, newly hired as an assistant to the Stones, recalls seeing a preview of the film at a Soho movie theater. “Allen Klein sat next to Jagger and—right there—killed the movie. He said, ‘I don’t like it. Why? Because the Who blew you off your own stage!’ It was all he had to say.” (Rock and Roll Circus was finally made available to the public in 1996, when it was released on home video.)

  Curiously, when Klein met Lennon on the set, they didn’t talk about any financial matters; they just exchanged brief and perfunctory hellos. A few weeks later, however, Lennon gave a revealing interview to Disc and Music Echo about the sorry state of Apple Corps (pronounced “core”), the multimedia company the Beatles had founded a year earlier. They started Apple partly as a tax-avoidance scheme. In January 1968, EMI was scheduled to hand the Beatles about £2 million in accrued royalties, and at that time England’s highest tax rate on earned income was 83 percent (and dividend and interest income was taxed at a staggering 98 perce
nt). When the Beatles’ accountants told the group they could either give almost all that money to the Inland Revenue or do something else with it, they figured it was an easy choice. First, they opened up the Apple Boutique at 94 Baker Street, which traded in high-end hippie gear, most of it designed by an Anglo-Dutch design collective called The Fool. But the handsome storefront was a poorly managed money pit. In fact, it hemorrhaged money so rapidly that the Beatles abruptly decided to close it for good just seven months later. Instead of trying to sell off the remaining merchandise at a discount, they just gave it all away.

  Even as the boutique was collapsing, however, Apple Corps expanded into film, electronics, publishing, and music divisions. In June 1968, the Beatles bought an impressive, five-story building at 3 Savile Row for £500,000, installed a recording studio in the basement, and made it their new headquarters.

  Although Apple would never have existed if the Beatles hadn’t desired to shield themselves from the Labour government’s high personal income tax, the enterprise was also fueled by an eager determination to prove that “business” didn’t always have to be stodgy, starchy, and serious. Instead, the Beatles insisted that business could be fun—a worthy outlet for the group’s boundless creative energy. Apple was also propelled by an extraordinary generosity of spirit. The Beatles boasted that it would provide an unprecedented opportunity for other creative types. By signing with Apple, they said, newbie artists would be allowed to pursue their visions without having to compromise, beg for nickels, or worry about pleasing their corporate masters. “We’re in the happy position of not really needing any more money,” announced twenty-five-year-old Paul McCartney, “and so for the first time the bosses aren’t in it for the profit.”