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Friday, January 13, 1967

NEMS Enterprises merge with Robert Stigwood’s company

Last updated on November 27, 2024


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In the autumn of 1966, Brian Epstein, the manager of The Beatles, became worried that the band did not need him as much as they did in the past, especially as they had stopped touring in August 1966. This was a difficult time for him, as he was dealing with personal doubts, health issues, and drug problems. He eventually realized that managing NEMS Enterprises, his company, was too much for him, and he wanted to find someone trustworthy to take over the management except for The Beatles and Cilla Black, which he wanted to keep for himself.

Around the same time, Epstein met Robert Stigwood, who was a rock manager and managed the band Cream and other musicians. Stigwood and his partner David Shaw had recently created the Robert Stigwood Organization. Despite some questionable business practices in the past, Epstein considered them as potential managers for NEMS Enterprises.

The merger between NEMS Enterprises and the Robert Stigwood Organization was finalized on January 13, 1967.

Two weeks later, on January 27, 1967, Brian Epstein signed a new nine-year-long recording deal with EMI for The Beatles, to secure his position with the band.

A couple of months after joining NEMS, Stigwood started managing the Bee Gees, a teenage vocal group that had returned to the UK after many years in Australia, hoping to start a British career.

When Brian Epstein unexpectedly passed away in August 1967, Stigwood was seen as a potential successor for NEMS Enterprises, but The Beatles refused to work with him. As a result, he received a “golden handshake” and left NEMS to re-form his own Robert Stigwood Organisation, taking the Bee Gees with him.


To Brian, Stigwood and Shaw seemed like the perfect choice to take over the daily operation of NEMS. He felt that Stigwood had the right amount of creative potential and that Shaw had a sharp financial mind. Most important to Brian, Stigwood was intelligent, amusing, and affected an elegance similar to his own.

Brian made the following offer to Stigwood and Shaw: He would sell them 51 percent of NEMS—a controlling interest—in a reverse takeover to avoid sustaining a large capital gain. Brian would remain chairman of the board and would continue to look after Cilia and the Beatles exclusively. Stigwood and Shaw could have all the rest. The price was an astonishingly paltry £500,000, considering that Brian had been offered $20 million only two years before. The written deadline for Stigwood and Shaw to raise the money was in May of 1967, but when that date passed, Brian made a verbal agreement with them to wait until September.

From “The Love You Make: An Insider’s Story of the Beatles” by Peter Brown and Steven Gaines, 2002

[Circa April 1967] Stigwood and Shaw were apparently proceeding successfully in raising the £500,000 to take over NEMS. Recently, Brian and Robert had a contretemps over a new group Stigwood had signed to NEMS called the Bee Gees. Three British-born lads from Australia, they had arrived on NEM’s doorstep one day hoping to see Brian. They were routinely referred to Stigwood, who was responsible for signing new acts. Stigwood was so impressed by their beautiful, poignant harmonies and by Barry Gibbs’ pop-idol good looks that he signed them immediately. Brian hated the Bee Gees from the start, perhaps because they weren’t his discovery.

From “The Love You Make: An Insider’s Story of the Beatles” by Peter Brown and Steven Gaines, 2002

[Circa June 1967] But in his heart Brian was scared. First of all, he had not told the boys about his plan to sell the controlling share of NEMS to Robert Stigwood. In fact, the Beatles didn’t even know of Stigwood’s existence. Secondly, he was worried by what he saw as signs of the Beatles’ growing discontent. They were slowly hearing bits and pieces of the Seltaeb fiasco [a company created in 1963 to sell The Beatles’ merchandising], and they were beginning to learn that Brian was unable to get out of bed until five o’clock in the afternoon because of the huge amounts of barbiturates in his system. He was scared most, however, because unknown to almost everyone, the Beatles’ management contracts with Brian were up in the fall of 1967.

From “The Love You Make: An Insider’s Story of the Beatles” by Peter Brown and Steven Gaines, 2002

There was no doubt that many people, particularly John, were suspicious when, early in January 1967, NEMS and Robert Stigwood’s management amalgamated. Stigwood was made a joint managing director of NEMS with Brian; however, without actually lying, Brian managed to somehow convince the Beatles that this was a boardroom arrangement and Stigwood had no power. Stigwood was someone else who had a nickname. It was Robert to his face and “Stiggie” behind his back. Rumors spread that Brian was about to sell the Beatles.

Derek Taylor – From “As Time Goes By” by Derek Taylor, 2018

BEATLES BOSS IN POP MERGER

Pop group tycoon Robert. Stigwood becomes joint managing director of NEMS Enterprises under a six-figure deal announced last night with Beatles boss Brian Epstein.

From The Daily Mail – January 17, 1967
From The Daily Mail – January 17, 1967

Stigwood, Nems In Merger

LONDON — The Robert Stigwood Organisation and its subsidiaries have merged with Nems Enterprises. Under this new arrangement, Robert Stigwood has been appointed joint managing director of Nems with David Shaw, his co-director, joining the board of directors of the company. Geoffrey Ellis, Oliver Ehstein, Bernard Lee and Vic Lewis are other board members. Brian Epstein remains joint managing director of the company.

Artists affected include the Cream, Lord Sutch, Oscar (who will continue to be personally managed by Robert Stigwood), the Who, the Merseys, Crispian St. Peters (for whom Stigwood acts as agents) and Mike Sarnes Business Management. Stigwood’s subsidiary label, Reaction, and the Stigwood-Yaskiel International Company are among the subsidiaries affected. The Hamburg office of Stigwood-Yaskiel will act for Nems in Germany, Austria and Switzerland.
Brian Epstein wishes to make it clearly understood that while Stigwood will share with him in the joint management of Nems widening activities, he continues to be personally responsible for the management of the Beatles, Cilla Black and Gerry and the Pacemakers. Robert Stigwood told Cash Box that he is delighted with this latest and biggest development of his organisation and is particularly happy that the new venture will enable him to expand into all areas of the entertainment industry including the legitimate theatre, films and TV as well as artist promotion and independent recording.

Stigwood is already represented in Italy in addition to the newly formed office in Hamburg and plans are in hand for the opening of a Paris office which will give the firm representation in France, Belgium, Holland and Luxembourg.

From Cashbox – January 28, 1967
From Cashbox – January 28, 1967

From The Beatles History (beatles-chronology.ru)


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