Brian Epstein made some costly mistakes while he was managing the Beatles,

Brian Epstein made some costly mistakes while he was managing the Beatles,

but under his management they became the most popular and successful band in the world, by far. After Epstein’s tragic death in 1967, the Beatles proceeded with setting up Apple Corps, through which they intended to take control of their own finances. It did not go well. They were extraordinarily gifted musical artists, but the Beatles were not good businessmen. In large part because of their idealism and naivete, Apple was soon hemorrhaging money. (Paul McCartney had said of Apple, “the bosses aren’t in it for profit,” describing the company’s business plan as a type of “Western communism”.)  In April 1969, John Lennon told a reporter, “Apple is losing money every week… If it carries on like this, all of us will be broke in six months.” Enter Allen Klein.

A New York based manager and businessman, Klein had a reputation in the music industry for being a ruthless bully—aggressive, abrasive, and obnoxious. He kept a sign on his desk that read: “Though I walk in the valley of the shadow of evil, I have no fear, as I am the biggest bastard in the valley.” But he was also extremely effective, having negotiated unprecedented and lucrative contracts for Sam Cooke and the Rolling Stones. When he read Lennon’s comment in the press, Klein contacted the group and offered his services, proposing to take a commission only on the increases in Beatles profits while under his management. If the group continued losing money, he would take nothing.

Lennon signed on as a personal client of Klein’s immediately and insisted that the band do likewise. Soon Ringo Starr and George Harrison were on board, but McCartney resisted, proposing that the band instead hire his father-in-law, New York attorney Lee Eastman. Eastman was unacceptable to the other Beatles (John saying that it was another step toward making them nothing but sidemen for Paul) and both Paul and Eastman detested Klein.

But with the support of a majority of the band, Klein was engaged as their new manager. Paul attended a publicity photo shoot intended to show unity, but the second photo below reveals his actual opinion on the matter. He personally never signed the contract.

Once he was hired, Klein went to work immediately, renegotiating the Beatles recording contract with EMI and obtaining for them the highest royalty rate ever paid to a recording artist. He shook up Apple, streamlining the company and firing staff he regarded as deadweight. The Beatles’ revenue soared. McCartney grudgingly acknowledged, “If you’re screwing us, I don’t see how.”

But eventually the relationship soured. Lennon, Harrison, and Starr came to distrust Klein, and they declined to renew the management agreement. “Possibly Paul’s suspicions were right,” Lennon told a reporter. In response to the break, Klein sued the Beatles and Apple, and the lawsuit was settled out of court several years later.

Although Klein continued to work in the industry post-Beatles, his health began to decline and in 1979 he was convicted of tax evasion, for which he served two months in jail. 

Allen Klein, who has been called “the man who broke up the Beatles,” died of complications from Alzheimer’s disease at age 77, on July 4, 2009, fifteen years ago today.