Rotten to the (Apple) Corps

Poor old Macca, he always gets the blame for splitting up the Beatles. Well, he did sue the other three and he did inadvertently let the cat out of the bag that it was all over in the Daily Mirror, lifting the veil on what had been a fairly open secret for several months.

Buckle up, it’s a long and complicated story…

In late 1962 The Beatles signed a management contract with Brian Epstein’s NEMS Enterprises, with NEMS taking 25% off the top. A year later, once it looked like the band might be slightly more than a flash in the pan, they formed Beatles Limited for their collective earnings and now that they’d had their first number ones, Northern Songs to handle the copyrights of all Lennon-McCartney tunes. Now you would think Lennon and McCartney would own 50% of Northern Songs each? No, they each had 20%. Brian Epstein owned 9% and the other 51% was gifted to a journeyman music publisher called Dick James by a supernaturally naive Epstein. Just imagine the amount of money that literally just fell into his lap over the next few years.

applesleeve

But this was the 1960s and Beatlemania reached every corner of the globe so there was more than enough money to go around, despite Eppy’s dreadful business deals. And all would have remained well for ever had Epstein not tragically died of an accidental drug overdose at his house at 24 Chapel Street, Belgravia on August 27 1967, thus began the beginning of the group’s downfall.

A couple of months later, presented with a huge £2 million tax bill, the Beatles hurriedly sorted out their taxes. As company directors of Beatles Limited, they had paid personal tax at the most punitive rates, sometimes 94% (“There’s one for you, 19 for me”). They formed a more tax efficient partnership called Beatles and Co, soon to be renamed Apple Corps (‘it’s a pun’ said Paul helpfully), so they paid the lower Corporation Tax. Their advisers recommended spending some of the £2 million quickly on something before the taxman could get it. They decided to use their money to subsidise anyone with a good idea. Western Communism, they called it.

“If you’re a singer sing for us; if you’re a writer write for us” they advertised’ so not surprisingly they received a torrent of packages, few of which were ever opened. They formed hundreds of new Apple companies – Electronics, Tailoring, Retailing, School – each run by one of their hopelessly unqualified friends. Apple Electronics was run by a Greek friend of John Lennon’s Magic’ Alex Mardas, whose bizarre and expensive electronic ideas never actually worked, and whose only electronics training was as a TV repairman.

Most infamous was The Apple Shop which opened at 94 Baker Street on December 5 1967 with a star-studded party, where the only drink available was … Apple juice, of course. Fabulously fashionable Dutch design collective The Fool got £100,000 to design and stock the store. Squads of local art students painted technicolour murals over the exterior walls but neighbouring shops and residents were not impressed. They immediately complained and the walls were repainted white. The shop was so badly managed and the security so notoriously lax that even The Beatles’ enormous tax shelter funds were exhausted and it closed after less than nine months.

In July 1968 they bought some very serious real estate at 3 Saville Row, which is where they played in public for the last time – up on the roof at lunchtime on Thursday January 30 1969 – and where the Apple dream came to a bad-tempered end around their boardroom table. The three non-Paul Beatles chose fearsome New York showbiz accountant Allen Klein to handle their stuff; Paul chose high powered New York entertainment lawyer Lee Eastman, who also happened to be his father-in-law, so there were two sides – Lennon and the others were on one and Paul could only ever be on the other. Their mutual loathing and mistrust meant that they totally failed in anything they tried to do that wasn’t musical. The chance to buy back Northern Songs, their own publishing company which they had never owned, slipped from their grasp when Dick James sold to Lew Grade for what would be squillions in today’s money.

By the end of the Summer of 1969 they were all sick of each other and wanted at least to take a break. John was under Yoko’s spell and doing his Peace Campaign thing; Ringo was in movies; and George had stockpiled tons of songs the Beatles had rejected and wanted to do an album. They now only ever met for business and the last time they were all in the same room was 20 September 1969 when it ended in acrimony and Lennon quitting. If the Beatles were over, argued Paul, then let’s dissolve the Apple partnership. No! said the other three repeatedly, so it was left to Paul to sue the other Beatles and Apple in the High Court in London. He finally won on 26 April 1971, 43 years ago this week.

The Beatles may have been over but temporarily at least we all won: each if them had new singles out – Another Day, It Don’t Come Easy, Power To the People and My Sweet Lord. Four for the price of one indeed.

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