Allen Klein, manager of the rock and roll band the Rolling Stones, is shown at work in his office in the Time & Life Building in New York, June 3, 1966. (AP Photo/John Lindsay)
Allen Klein (December 18, 1931 – July 4, 2009) was an American businessman, music publisher, writers’ representative, filmmaker and record label executive, most noted for his tough persona and aggressive, innovative negotiation tactics, many of which established higher industry standards for compensating recording artists. He founded ABKCO Music & Records Incorporated. Klein revolutionized the income potential of recording artists, who previously had been routinely victimized by onerous record company contracts. He first scored massive monetary and contractual windfalls for Buddy Knox and Jimmy Bowen, one-hit rockabillies of the late 1950s, then parlayed his early successes into a position managing Sam Cooke, and eventually managed the Beatles and the Rolling Stones simultaneously, along with many other artists, becoming one of the most powerful individuals in the music industry during his era.
In 1964 Klein approached the Beatles‘ manager, Brian Epstein, with an offer for the Beatles to sign with RCA for $2 million but Epstein wasn’t interested, saying that he was loyal to EMI. After Epstein died in August 1967, in January 1968 the group formed Apple Corps, which they announced in May 1968. They hoped it would provide the means for correcting Epstein’s unfortunate business decisions, which had both limited their incomes and ensured high tax burdens. Although “Hey Jude“, the Beatles’ first Apple release, was an enormous success, the label itself was a money pit, with little accountability for how money was being spent.
Klein contacted John Lennon after reading his press comment that the Beatles would be “broke in six months” if things continued as they were. On January 26, 1969 he met with Lennon, who retained Klein as his financial representative, and the next day met with the other Beatles. Paul McCartney preferred to be represented by Lee and John Eastman, the father and brother respectively of McCartney’s girlfriend Linda, whom he married on March 12. Given a choice between Klein and the Eastmans, George Harrison and Ringo Starr preferred Klein. Following rancorous London meetings with both Eastmans, in April Klein was appointed as the Beatles’ manager on an interim basis, with the Eastmans being appointed as their attorneys. Continued conflict between Klein and the Eastmans made this arrangement unworkable. The Eastmans were dismissed as the Beatles’ attorneys, and on May 8 Klein was given a three-year contract as the business manager of the Beatles. McCartney refused to sign the contract but was out-voted by the other Beatles.
Once in charge of Apple, Klein fired a large number of Apple employees, including Apple Records president Ron Kass, and replaced them with his own people. He closed Apple Electronics, which was headed by Alexis Mardas. Mardas resigned his directorship in May 1971.
Klein was hit with his first crisis in managing the Beatles when Clive Epstein, brother of Brian Epstein and chief heir to NEMS, the management company his brother had founded, sold NEMS to Triumph, a British investment group managed by Leonard Richenberg. NEMS held a 25% stake in the Beatles’ earnings, which Klein as well as the Beatles themselves desperately wanted to buy out. This led to tough negotiations with Triumph. Klein ultimately secured the Beatles’ rights in their previous work for just four annual payments amounting to 5% of their earnings. However, in the lead-up to those negotiations Richenberg commissioned a hostile investigative report on Klein, which The Sunday Times ran under the headline “The Toughest Wheeler-Dealer in the Pop Jungle.”
