Allen Klein: The Man Who Transformed Rock & Roll

by Fred Goodman

  As a record company, Apple was born with every advantage. Though the Beatles were signed to EMI and its American subsidiary, Capitol Records, they were able to deliver their own recordings under the Apple logo, and their first release, the enormous worldwide hit single “Hey Jude,” couldn’t have given Apple Records more visibility. If Apple was intended to be a business that challenged the status quo, the record company certainly did that; the major labels had to be loath to see the biggest pop act in the world striking a blow for artist-owned imprints. If successful, the Beatles’ label would be difficult to compete with—what artist wouldn’t want to be associated with the Beatles? And Apple Records showed every sign of becoming a quick success with hits by Mary Hopkin and the Iveys (who later changed their name to Badfinger) and clearly could have become a powerhouse. Aside from the Beatles, Apple signed James Taylor and was in the hunt for Crosby, Stills, Nash, and Young.

  Yet Apple’s description as the unbusinesslike business would prove far too accurate. A series of McCartney-designed ads inviting everyone to submit demos ran in Rolling Stone and New Musical Express and soon produced a mountain of tapes and queries from around the world that then sat unopened and unheard. Worse, the record company was just one of numerous Apple Corps Ltd. companies and about the only one that the Beatles and the friends they’d selected to run them knew anything about. There was a music publisher, a film company, a recording studio, a design firm, and an electronics lab run as a dream factory/playroom for their protégé “Magic” Alex Mardas, a former TV repairman turned self-styled inventor and visionary. Mardas’s gee-whiz projects were said to include a car that changed colors, wallpaper that acted as a stereo speaker, and invisible sound barriers. One of the most concrete projects, an attempt to build a seventy-two-track studio in the basement of Apple’s London offices, resulted in a sixteen-track console that was all but useless; the Beatles ripped it out after the first day.

  The fatal flaws wired into Apple’s DNA were certainly on display at the Baker Street fashion shop known as the Apple Boutique. Magic Alex’s plan to unveil an artificial sun at the store’s debut came to naught, and the shop, lavishly designed by a Dutch art collective, was opened in December 1967 by Lennon and Harrison and out of business six months later, largely because employees and potential customers simply helped themselves to the merchandise.

  The situation at Apple Corps’ Savile Row office was much the same: a free-for-all. The Beatles had announced that Apple would break the rules, but in practice, it had no rules. Publicly, the Beatles talked as if they would continue on that path. When announcing the closing of the Apple Boutique, McCartney, who was the most hands-on regarding Apple, had taken pains to continue casting the company in a soft Aquarian light, emphasizing that they were going to give away their remaining stock rather than consign it to a broker, find new jobs for and provide generous severance pay to the employees who’d helped drive the store into the ground, and otherwise continue to be groovy. Perhaps he was thinking primarily of the band’s reputation. Privately, the Beatles were coming to see Apple as a giant financial sinkhole, one that was costing them a fortune and taking all their attention. “I wanted Apple to run,” McCartney said. “I didn’t want to run Apple.”

  Lennon, though less involved in Apple’s day-to-day business, was the first to publicly sound an alarm. “We haven’t got half the money people think we have,” he told journalist Ray Coleman in early January 1969. “It’s been pie-in-the-sky from the start. . . . We did it all wrong—you know, Paul and me running to New York saying we’ll do this and encourage this and that. It’s got to be business first, we realize that now. . . . It needs a new broom and a lot of people there will have to go. . . . If it carries on like this, all of us will be broke in the next six months.”

  Lennon’s assertions that the Beatles were in imminent financial danger came as a shock to many when they were published five days later in Disc and Music Echo. They also produced opposite emotions in two particular quarters. In London, McCartney called Coleman, who’d covered the Beatles since the earliest stirrings of Beatlemania, and chided him for publishing the remarks. In New York, Allen Klein knew his moment had arrived.

  Very few people ever earned the unwavering trust of the Beatles. Derek Taylor did.

  An established journalist when the Beatles were on the rise, Taylor was an early and unqualified admirer; he got and loved them right away. As a result, he was invited into the tent, collaborating on an early syndicated column by George Harrison and later ghosting Brian Epstein’s autobiography, A Cellarful of Noise. By the mid-1960s he was a press agent, first for the Beatles and then on his own in California, where he helped establish the Byrds and worked with the Beach Boys and Paul Revere and the Raiders. After promoting the Monterey Pop Festival, he settled in for a year at A&M Records as the “house hippie.”

  Difficult to imagine now, the house hippie was an odd, amorphous, not always legal, and important record-industry role in the mid- to late sixties, a position that required its holder to be part go-between, part cultural ambassador, and 100 percent double agent. At the time, record-company executives were unsure how to deal with artists from the underground, and it was the house hippie’s job to show them what to do—and to show the artists that the record company “got” them. It was an unusual tightrope walk, and its most admired practitioners—Billy James at Columbia, Andy Wickham at Warner Brothers, and Derek Taylor at A&M—had the rare and valuable ability to keep their footing while astride two worlds. When the Beatles started Apple, Derek agreed to be its press liaison.

  Two days after Lennon’s worries concerning the Beatles’ financial future were published, Andrew Oldham’s partner Tony Calder offered to drive Taylor to the office, primarily so he could deliver a message to him from Klein.

  “Allen Klein says you are in his way,” he told Taylor. “Allen says you are blocking him from meeting the Beatles and doing business with them. He thinks you’re sore at him.” Taylor was flabbergasted. Nothing could be farther from the truth. A few years earlier, Oldham and Klein had spoken with Taylor about handling press for the Rolling Stones and then nothing had come of it, so while Taylor could certainly see why Klein might imagine he bore him a grudge, his only lasting feeling had been bemusement. He’d found Klein both grating and oddly ingratiating. Allen had offered him sound and thoughtful financial and business advice but only, Derek suspected, as a way to impress him. “He is an asshole for thinking that,” Taylor told Calder, and he offered to do what he could to clear the way for Klein.

  “Allen Klein wants to meet the Beatles,” Taylor told Apple director Peter Brown.

  “Does he ever!” Brown quipped. A former assistant to Brian Epstein at NEMS, Brown remembered Klein’s earlier unsuccessful attempt to woo Epstein. He told Taylor that the only impediment to Klein’s speaking with the Beatles was the musicians themselves.

  Taylor sent a message back to Klein telling him to call. But a few days later Taylor heard from another Klein emissary, Stones’ publicist Les Perrin, that Allen still couldn’t get Brown to put him through. When Lennon and Harrison came in for lunch that day, Taylor broached the subject directly and learned that Lennon had told Brown he didn’t want to take the calls. Derek allowed that Klein was a little strange and that his reputation and tactics engendered strong feelings; he characterized him as “hated by many who have never met him and by some who have only heard of him,” to which Harrison deadpanned that Klein sounded really nice. Nonetheless, Taylor said, Klein might be just the person to sort through the Beatles’ money woes.

  Shortly after nine o’clock on the evening of January 26, just eight days after Lennon’s interview appeared in Disc and Music Echo, Allen Klein opened the door of his penthouse suite at London’s Dorchester Hotel and invited in John and Yoko Ono.

  Both men were on their guard, agitated, and anxious. For Allen, this was it—the crucial moment in years of planning and scheming. Could he harness his nerves and put it over?

  Klein�
��s public pursuit of the Beatles—particularly the repeated boasts that he would get them, that it was just a matter of time—had spooked Lennon. “He called me once but I never accepted it,” Lennon said. “I was too nervous.” Still, he was impressed with how well the Rolling Stones had done since pairing with Klein and couldn’t square it with the dark rumors he’d heard. “I could never coordinate it with the fact that the Stones seemed to be going on and on with him . . . I started thinking he must be all right.” Yet Lennon began to relax only when he realized that Klein was at least as nervous as he was. “You could see it in his face,” he said. “When I saw that I felt better.” Lennon also liked that Klein had made sure the three of them were alone in the room to establish a rapport, although Allen’s assistant Iris was nearby in case they needed anything. Klein offered them a carefully researched and prepared vegetarian meal—exactly the macrobiotic dishes John and Yoko preferred—and his tone was unusually personal and unguarded: Let’s put business aside for a bit and see what we make of each other. It felt as if Klein had come to them naked with nothing to hide.

  It wasn’t what Lennon expected. Since Epstein’s death, the Beatles had sought out new management and advisers in fits and starts. They knew they were rudderless and courting real financial danger, yet they were skeptical and distrustful of outsiders and had no idea whom to turn to. Along the way, Lennon and McCartney had looked at a number of possibilities. At Paul’s suggestion John met with Lord Beeching, the chairman of British Railways. The meeting did nothing except confirm John’s suspicions that everyone in the business world was an animal, and he’d be fucked and damned before he’d have anything to do with any of them.

  Allen’s music-business expertise and take-no-prisoners negotiating style at least fit the job. But more important to Lennon was the feeling he got that Klein was cut from a different cloth than the others he’d met—the same plain, coarse, ordinary cloth that Lennon flew for a flag. John, who had a world-class chip on his shoulder, listened to Allen’s stories about the orphanage and the painful indifference of his father and his childhood on the streets of Newark, and he saw himself: the underdog who had proven to be the leader of the pack, the everyman who’d had the temerity to become extraordinary only to be rewarded with the scorn of all the third-rate bastards he’d bettered and beaten.

  Allen had spent years preparing for this moment. He didn’t make a direct pitch, since they all knew why they were there, and he won points with the couple for doing what few did: speaking to them as partners and equals. And while Klein was the first to admit that not everything the Rolling Stones recorded was for him, his appreciation for the Beatles’ genius was boundless. He didn’t talk about business; he talked about Lennon’s music, correctly picking out which songs were John’s and noting where Lennon’s contributions and personality could be found in compositions primarily written by McCartney. Lennon was floored. He would later compare Klein to a human jukebox for his awesome ability to recall what felt like every pop lyric written in the last fifty years.

  Clearly, Klein’s obsessive research had paid off. In Lennon’s estimation: “Anybody who knew me that well—without having met me—had to be a guy I could let look after me.”

  Lennon told Klein that he wanted him to handle his and Yoko’s business. He added that the Beatles had recently asked New York attorneys Lee Eastman and his son, John, to look into their affairs. The elder Eastman had a well-established practice that at one time had focused on music publishing but was best known for representing painters, particularly Willem de Kooning. Lee and John were also the father and brother, respectively, of Paul McCartney’s girlfriend, photographer Linda Eastman. Klein, continuing to play it cool, didn’t ask Lennon to formalize their arrangement. They continued chatting until 3:00 a.m., when John finally asked if Allen didn’t need something in writing.

  A portable typewriter miraculously appeared from the bedroom. Yoko sat on the floor and typed out brief letters, similar in wording to the one Klein had given Sam Cooke to sign, informing the top executives at EMI, music publisher Northern Songs, the Beatles’ accountants at Bryce Hamner, and NEMS that John Lennon had retained Allen Klein to look into his business affairs and to please provide him with any help he required.

  Holding a letter—he would later have one framed—Allen was overcome. “At last!” he said. “At last!”

  At Allen’s insistence, in the morning, John telephoned each executive and alerted him to the about-to-arrive note. When he stopped by the Apple office in Savile Row for lunch, he told the other Beatles and several senior staff members that he’d hired Klein. Taylor, who still wasn’t sure how he felt about helping to open the door for Klein, was bemused to see Lennon completely smitten with him. “Don’t care about the others, don’t give a shit,” he said when asked how the other Beatles reacted to the news. “I’m having Klein. He can have all my stuff and get it sorted out.”

  The following evening a confident Allen met with the four Beatles. After he’d reiterated that he would be looking into Lennon’s finances, the topic quickly came around to a plan John Eastman had proposed. NEMS, Brian Epstein’s management firm, still had a 25 percent interest in the Beatles’ earnings, but the Epstein family was willing to sell their interest to the Beatles for a million pounds; Eastman had arranged to borrow the money from the Beatles’ British record company, EMI.

  It was a quick and reasonable settlement, but Klein said he didn’t like it and that borrowing against royalties was needlessly expensive; he suggested that the Beatles would likely have to earn double the amount just to cover the taxes on the income. More to the point, he said he wouldn’t sign off on any deal for Lennon until he’d gotten a complete overview of his financial situation. McCartney, however, spoke up for the deal, reminding the others that Eastman had strongly recommended it and that it was already in the works. Allen wondered if the best idea might be to schedule another meeting with the Eastmans over the weekend. Everyone agreed, and McCartney left soon after that. Harrison, Starr, and Lennon remained behind, and Klein talked in greater depth about what he would be doing for Lennon. George and Ringo asked Allen if he’d do the same for them.

  Clearly, Klein impressed them more than the twenty-six-year-old John Eastman had; Ringo would later characterize the young lawyer as “pleasant but harmless,” while George thought him unqualified to manage the Beatles. But there was more to it than that; George’s and Ringo’s votes for Klein were also votes for Lennon—and against Eastman and McCartney.

  Whatever Klein thought he knew about the inner dynamics of the Beatles, it’s unlikely he understood just how divided and near splintering they were. Lennon, the band’s founder and original leader, had abdicated much of that role over the preceding two years, focusing instead on his life with Yoko Ono when not distracted by heroin. McCartney had stepped into the breach, taking greater command of the group’s sessions; he was the driving force behind the group’s current project, a stripped-down album and TV documentary entitled Get Back. Still, tension in the band was running high. Just a few weeks earlier, Harrison had walked out of the sessions and threatened to quit, tired of being condescended to and treated like the eternally junior partner. And a few months before, during the recording of The Beatles (a.k.a. The White Album), Starr had stormed off to Greece and had to be cajoled into coming back.

  McCartney had already assumed a dominant role in the studio; Harrison and Starr were loath to see his girlfriend’s family take control of their business. They’d rather follow Lennon. “I thought, well, if that’s the choice, I think I’ll go with Klein because John’s with him,” George said.

  “We were convinced by him,” said Ringo, who got a kick out of Klein’s brash attitude and felt at ease with him. He also saw that Klein knew what he was talking about. “I was convinced by him, and John, too. I liked Allen. He was a lot of fun, and he knew the record business. He knew records. He knew acts. He knew music. A lot of people we spoke to were trying to get in with the music crowd but didn’t
know anything about the music business.”

  Klein hoped that having three Beatles firmly in his corner would be enough to cement his status as the group’s manager, but those hopes quickly evaporated at the Saturday meeting in Klein’s Dorchester suite. John Eastman (his father, Lee, was not there) once again made his case for buying NEMS, saying that the company owned 275,000 shares of the Beatles’ music publisher, Northern Songs, and that the Beatles should own them, but Klein dismissed that as an insufficient reason to buy the company, adding that any decision should wait until they had a better picture of the Beatles’ finances. Eastman got the message right away: Klein wasn’t going to like anything he brought to the table, no matter how smart it was.

  At that point, with each man feeling that his status and credibility were on the line, Eastman and Klein dropped all pretense of civility. Klein had the clear advantage; Lee Eastman’s decision not to fly to London for the meeting meant that all Allen had to do was look and sound more knowledgeable than a young attorney who’d only recently handled his first record negotiation, a revised deal for the group Chicago. Allen suggested that things would go best for the Beatles if he took care of the business and the Eastmans contented themselves with being their lawyers, but John Eastman flatly rejected the idea. “He was trying to subsume me into what he was doing, which I wouldn’t do,” Eastman said. Going on the offensive, Eastman brought up Cameo-Parkway’s unusual saga and ABKCO’s ultimate delisting by the American Stock Exchange and questioned Allen’s integrity. “It certainly wasn’t a friendly thing,” Allen said. When Eastman discovered a bottle of suppositories in the bathroom medicine cabinet, he couldn’t resist showing them to the room. “Whose are these?” he asked. When Klein said they were his, Eastman grinned. “Why, Allen,” he said. “I thought you were the perfect asshole.”