Allen Klein becomes The Beatles’ business manager and the Eastmans are appointed Apple’s general counsel

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In January 1969, The Beatles, at the initiative of Paul McCartney, started to look for a new manager for Apple. But quite quickly, Paul was convinced that Lee Eastman, father of Linda Eastman and his future father-in-law, should be put in control of The Beatles’ financial affairs. The other Beatles were not comfortable with the idea that Paul’s future father-in-law would run Apple, but they agreed to have Lee Eastman and his son John as business advisors for a short while.

On January 27, John Lennon made controversial American businessman Allen Klein his personal adviser. On January 28, the four Beatles met Allen Klein for the first time. On February 1, The Beatles, Allen Klein, and John Eastman discussed John Eastman’s idea of buying Brian Epstein’s former company NEMS Enterprises for £1 million.

On this day, February 3, The Beatles, Allen Klein, and John Eastman met again at Apple headquarters. It was during that Allen Klein was appointed The Beatles’ business manager charged with examining their finances and finding a way to stop NEMS from taking a quarter of their income.

Mick Jagger, whose Rolling Stones were managed by Allen Klein at the time, had been invited by Paul McCartney. Paul wanted him to share his experience with Allen Klein. But Mick Jagger didn’t expect Allen Klein to be in the Apple boardroom and he shied away just saying “[Allen Klein] is all right if you like that sort of thing“.

McCartney was aware that the Stones had learned that Klein had incorporated the band in the States using the same name as their British company, Nanker Phelge. Spoken out loud, no one had any reason to doubt they were not the same company. But the USA-registered Nanker Phelge was, in fact, wholly owned by Klein; and so all of the Stones’ US royalties and publishing money ended up in Klein’s pocket, with the Stones, effectively, his employees.

But when Jagger arrived at Apple he found Klein himself in the Apple boardroom alongside all four Beatles. It was a trap, set by Lennon to embarrass McCartney and Jagger. […]

Some in the Stones’ orbit at that time, including Jagger’s then lover, Marianne Faithfull, have offered an extraordinary alternative explanation. She later suggested that Jagger had shamelessly stacked the deck to ensure The Beatles fell under Klein’s control, thus providing the Stones with a potential escape route from his clutches. Other accounts say Jagger found the courage, a few hours later, to warn Lennon to avoid Klein. ‘He’s all right but it’s hard to get your hands on the money,’ he is said to have warned.

From “And In The End” by Ken McNab

Part of John’s perverseness was shown by that awful situation when Mick Jagger wanted to come around and tell the Beatles what Klein was really like. He went to John and told him: ‘Before you make a commitment to Klein, let me tell you my experience.’ And I told John that Mick was gonna come around and do this, which was a very sensible thing to do. Mick was a very bright man, and he was far more business orientated than either John or Paul. Mick was going to say, as a friend, ‘Listen, before you make any decision, I should tell you what happened to me.’ So John tells Klein that Mick was coming, and when Mick arrived he was presented with not only the four Beatles but also with Klein. There wasn’t much that Mick could say. It was a very, very bizarre thing for John to have done.

Peter Brown – From “Those Were The Days 2.0” by Stefan Granados

As a compromise to Paul, Lee Eastman and John Eastman were appointed as Apple’s General Counsel, to keep an eye on Allen Klein’s activities.

John was going with Klein, and George and Ringo said, ‘OK, we’re going with John.’ I realised I was expected to go along with it, but I didn’t think it was a good idea – simple as that, really. Actually I asked Mick Jagger when he came round, ‘What do you think?’ He said, ‘Oh, he’s all right if you like that kind of thing.’ He didn’t really warn us off him, so there it was – and that then was the three-to-one situation. In The Beatles, if anyone didn’t agree with a plan, it was always vetoed. It was very democratic that way, so the three-to-one situation was very awkward and as a result ‘things’ would happen.

Paul McCartney – from The Beatles Anthology

When Allen Klein came on board the whole atmosphere changed right away. You could no longer wander casually in and out of people’s offices. Doors were closed. He was very controlling about any of us having personal contact with The Beatles.

Tony Bramwell – Quoted in Classic Rock, May 2020

We almost signed ourselves over to the Eastmans at one time, because when Paul presented me with John Eastman, I thought, “Well . . . when you’re not presented with a real alternative, you take whatever is going.” I would say, “yes,” like I said, “Yes, let’s do ‘Let It Be’. I have nothing to produce so I will go along,” and we almost went away with Eastman. But then [Lee] Eastman made the mistake of sending his son over and not coming over himself, to look after The Beatles, playing it a bit cool.

Finally, when we got near the point when Allen came in, the Eastmans panicked; yet I was still open. I liked Allen but I would have taken Eastman if he had turned out something other than what he was.

John Lennon – Interview with Rolling Stone, 1969

The day-to-day driving force at Apple was Paul, and therefore, it was Paul that Neil and I dealt with. I would be there all day. Neil would come in the late morning and Paul would come in most days. So naturally, Paul was the person we spoke to. Paul was the most reliable about making decisions. He was the most conventional about structuring a business. He liked the idea, so Apple was built in Paul’s image. What happened was that when John woke up, partly as a result of Yoko’s prodding, he found the structure in place. Then when he said he’d like to do this or like to do that, we had to say, ‘Well, you can’t do that because we’ve already got a structure, it’s already done.’ And that was the start of many of the problems, because John came along and said, ‘I want something different,’ and we would say, ‘It’s already done, this is how it’s done.’ So, he would say, ‘Well, I don’t like it,’ and we would say, ‘Well, it’s too late, you should have been here before.’

Peter Brown – From “Those Were The Days 2.0” by Stefan Granados

After the meeting, the Apple press office released the following statement:

The Beatles have asked Mr Allen Klein of New York to look into all their affairs and he has agreed to do so, it was announced from their headquarters at Apple, 3 Savile Row, London W1, today.

In London’s High Court in early 1971, during the hearing of McCartney’s lawsuit to dissolve The Beatles’ partnership, the following was read out as part of Allen Klein’s affidavit:

On the morning of 3rd February 1969, I went to 3 Saville Row and saw the four Beatles, John Eastman and a few principal staff members of Apple, who were informed that my company (then still called Cameo-Parkway) had been appointed to look into the affairs of The Beatles and all their Companies. At this meeting John Eastman agreed that he would, after all, act as legal adviser to The Beatles and all their companies.

Apple issued two press announcements, one relating to my Company’s appointment and a separate one relating to the appointment as lawyers of John Eastman’s firm, Eastman & Eastman. Cameo-Parkway also issued a press announcement of its own, a copy of which is now produced and shown to me marked “A.K.4”.

On the evening of the same day, 3rd February 1969, I met Clive Epstein and Mr Pinsker at the Dorchester Hotel to discuss with them the possible purchase by Apple of the share capital of NEMS. Clive Epstein was then Managing Director of NEMS and Mr Pinsker’s firm, Bryce Hammer & Co, acted as accountants for both NEMS and The Beatles. I asked Clive Epstein if he would be willing to wait and defer a decision with regard to his disposal of NEMS for about three weeks until I had had an opportunity to assess the financial position of The Beatles and their companies. Clive Epstein agreed to defer a decision for at least three weeks. The following day I left for New York to begin an investigation into the three main sources of The Beatles’ income as a verification of their financial position. The three sources were United Artists Corporation, the Company which handled The Beatles’ films (“United Artists”), General Artists Corporation, which handled their American tours (“G.A.C.”) and EMI and its United States subsidiary, Capitol Records Inc. Formal letters of direction were issued by The Beatles to enable me to obtain the requisite information. There is now produced and shown to me marked “A.K.5” a bundle comprising copies of these letters and other letters referred to below.

Allen Klein – From beatlesbible.com

Following this appointment, it would take three months for the contract with Allen Klein to be drawn up and signed… by three Beatles out of four.

The first meeting of Allen Klein in his new role happened later that same day with Clive Epstein, to discuss NEMS.

The Beatles have called in American business negotiator Allen Klein – who has looked after the financial affairs of Rolling Stones, the Animals and Herman’s Hermits – to advise them on the running of their Apple enterprises. Rehearsals for the group’s previously-planned concert have now definitely become the basis of a TV documentary; some of the specially-written songs where heard by startled passers-by in London’s Savile Row last Thursday, when the Beatles gave a spontaneous performance on the roof of Apple and were filmed for the programme.

It is understood that almost all 12 tracks of the new album, centred around the documentary, are now complete. Final recording will take place within the next fortnight, with a view to the LP being released in April or May.

Allen Klein has been in London for preliminary discussions with the Beatles this week – a conference with them took place on Monday – and he hopes to begin work next week.

From New Musical Express, February 8, 1969

Rolling Stones business manager Allen Klein is to take over the business affairs of Apple, the Beatles’ company. In a statement to MM on Monday, a spokesman said: “The Beatles have asked Mr Allen Klein of New York to look into their affairs and Mr Klein has accepted”.

This means that Klein, the man who has steered the Rolling Stones to international success, is the secret businessman that the Beatles want to streamline their organisation and put it on an economic footing.

Two weeks ago, John Lennon said that unless they stopped losing money, Apple would go out of business. […]

From Melody Maker, February 8, 1969

Allen Klein Looking Into Beatles Affairs

NEW YORK — Allen Klein, through Cameo-Parkway Records, will look into all the affairs of the Beatles.

Klein, the business manager ot key disk acts, including the Rolling Stones and Bobby Vinton, said he had been asked by the Beatles to undertake this role and had agreed to do so. There have been rumors of late that the Beatles’ entertainment complex, Apple Enterprises, was running into financial difficulties, a situation that Apple spokesmen have denied.

The Klein-Beatles’ association received big play in the English consumer press. One newspaper, the Daily Mirror, quoted Klein: “My responsibility will be to make Apple money. I do not wish to make suppositions — I have a job to do and I just want to get down to it.”

In making the announcement, Klein emphasized a number of points: that Cameo has no relationship with the Beatles and is in no way involved with the team; Cameo’s function at this time will be to review and to negotiate various of the business activities of the Beatles and either party can terminate this arrangement at any time; the understanding between Cameo and the Beatles was just arrived at, and no definitive arrangements of any kind between the Beatles or others may result. Klein further underscored the fact that Cameo might never realize any revenues from the arrangement.

From CashBox Magazine, February 15, 1969

John Eastman is Beatles counsel

NEW YORK – John L. Eastman of the New York law firm of Eastman & Eastman has been retained as general counsel for the Beatles, their Apple entertainment complex and related companies. Eastman will serve as a worldwide clearing house for the various Beatles and Apple deals and will aid in coordinating their worldwide efforts.

From CashBox Magazine, March 1, 1969

Last updated on February 26, 2022