The Beatles and ATV fight for the control of Northern Songs

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The music publishing company Northern Songs was established in February 1963 by music publisher Dick James and his partner Charles Silver, with the primary purpose of publishing songs written by John Lennon and Paul McCartney.

In March 1969, concerned about the growing influence of Allen Klein in the Beatles’ business affairs — and wary of the American businessman’s reputation — James and Silver decided to sell their shares in Northern Songs to Associated Television (ATV) for £1,525,000. They did so without notifying John or Paul or offering them the opportunity to purchase their shares.

The news broke on March 28, 1969, when newspapers reported not only the sale but also ATV’s £9.5 million bid to acquire the remaining shares in the company.

April 2, 1969 – Paul and John met Dick James

On April 2, 1969, Paul and John met Dick James at Paul’s home in Cavendish Avenue. The meeting was brief and ultimately unproductive.

It appears that Dick James, managing director of Northern Songs, has failed to persuade Beatles John Lennon and Paul McCartney to accept the £9 million bid for Northern from ATV.

From The Financial Times, April 5, 1969.

Later that same day, Paul and John — accompanied by Yoko Ono and Allen Klein — met with The Beatles’ merchant bankers, Henry Ansbacher and Company, to devise a strategy for gaining a controlling interest in Northern Songs.

Between April 2 and April 28, when The Beatles formally announced their bid, numerous such meetings were held at Ansbacher’s offices. The Beatles were advised throughout this period by Bruce Ormrod.

At the time, ATV already held nearly 35% of Northern Songs. The Beatles collectively controlled 29.7%, divided as follows: Paul owned 751,000 shares, John 644,000, Ringo Starr 40,000, and George Harrison had sold his shares — though his wife, Pattie, retained 1,000. Apple Corps controlled an additional 30,000 shares. Triumph Investment Trust, through its recent acquisition of NEMS / Nemperor, held 237,000 shares, amounting to 4.7% of the company.

NORTHERN BID HERALDS ATV GROWTH IN PUBLISHING

ATV’S TAKEOVER BID for Northern Songs marks the beginning of the major music publishing build-up by the group which was foreshadowed by managing director Lew Grade in his annual report last year.

In the report, Sir Lew, as he now is, revealed that ATV had been outbid for Chappell (by Philips-DGG) and more recently ATV was outbid in another tender race by Northern Songs itself for the Lawrence Wright catalogue.

At the same time ATV’s subsidiary Pye Records has been planning to build up its publishing arm Welbeck Music which is breaking away from MCA-owned Leeds Music.

Previously Leeds has handled Welbeck’s administration but the Pye music company becomes fully independent on May 1 under general manager Les Cocks and is due to move into its own offices in Old Compton Street this month. Later it plans to launch its own label.

Under the Northern takeover Dick James who is Northern’s managing director will head all ATV publishing activities. ATV has gone into the deal with its eyes wide open to the near certainty that John Lennon and Paul McCartney will switch their publishing outlet to Apple Music as George Harrison after their song-writing commitment to Northern for six songs a year expires in 1973.

The Beatles are known to want to control all their activities and are similarly expected not to renew their EMI recording contract from 1976 but to record directly for Apple.

At present their records are allowed to appear on the Apple label as a special concession by EMI which still retains all manufacturers royalties on their discs.

Friday night’s announcement of the ATV bid values Northern Songs at about £9.3 million. In the city the bid is regarded as far from generous. However ATV has already secured 35 per cent through the agreement of James and Northern chairman E. L. Silver to sell their stakes together with a small percentage bought by ATV on the stock exchange.

John Lennon has already said that he and Paul McCartney would not part with their 26 per cent stake in Northern. If they sold out they would have no publishing stake in the 160 songs of theirs published by Northern which will continue to hold the rights on these songs for the duration of the copyright.

In the financial year which ended on Monday Northern has forecast a profit of £1 million.

Dick James told RR on Monday, “I hope to see John and Paul before the end of the week to persuade them to change their minds.”

He added, “I will be running all of ATV’s publishing interests and remain managing director of Dick James Music, the company which manages Northern Songs.”

At the end of February James launched his own label DJM run by his son Stephen (22) which Pye is pressing and distributing. At present Dick James also handles a 50 per cent stake in Larry Page’s label Page One.

ATV director Jack Gill told RR on Monday, “Whether we put Welbeck into Northern is a matter we cannot decide on at this moment because of other factors.”

He said that ATV would not mind Lennon and McCartney hanging on to their Northern shares — “If they have an interest in the company this is a stimulus for them. If we have to have minority shareholders we could not have better ones.”

Gill said ATV had taken into account the possible eventual loss of the two Beatles songwriting services, commenting, “If they still retain their share maybe they will consider renewing. But we have obviously faced up to the fact that they may not wish to continue and by then we intend to develop a considerable music publishing business. This is just the basis for getting off to a marvellous start with songs like ‘Michelle’ and ‘Yesterday’ which have already become standards.”

From Record Retailer – April 2, 1969

Beatles talk over bid

Mr. Dick James, managing director of Northern Songs, has met Beatles John Lennon and Paul McCartney to discuss the £9 million take-over bid made for their company by Sir Lew Grade’s A.T.V. group.

Mr. James, together with other shareholders holding 35 per cent of the shares, has already accepted the offer.

Between them the two Beatles hold more than 25 per cent of the Northern Songs shares.

From Evening Post – April 3, 1969

April 10, 1969 – ATV launches its bid

On April 10, ATV officially launched its takeover bid for Northern Songs, seeking to acquire enough shares to secure a controlling majority. The strategy was to retain The Beatles as minority shareholders, hoping this would keep them creatively engaged and motivated.

U. K. TV Firm Bids For Beatle Song Co.

LONDON — Associated TeleVision, parent company of Pye Records and Britain’s midland commercial television franchise holder, is making a $22.3 million bid for the stock of Northern Songs, which publishes John Lennon and Paul McCartney’s compositions.

Northern chairman Emmanuel Silver and managing director Dick James have agreed to sell their 32 per cent holding to ATV and are recommending other stockholders to accept the bid. ATV has also bought 3 per cent of the shares on the open market.

But the two song writing Beatles are expected to become minority stockholders in the company and refuse to sell their shares estimated at around 26 per cent of the total. John Lennon has said he will not sell and that he expects Paul McCartney to take the same attitude.

In view of ATV’s committed holding of at least 35 per cent together with the two Beatles’ 26 per cent it is considered unlikely that a rival bidder for Northern will come forward.

The company has 160 Lennon-McCartney songs which it owns for the duration of the copyright. The two are under contract to write at least six new songs a year for Northern until 1973.

After that date it is thought that the two will switch their publishing outlet to their own Apple Music. George Harrison switched from Northern to Apple last year.

Northern also owns Lawrence Wright Music which it acquired by making the highest tender bid last year, when the company came up for sale after the death of its founder.

In the year to March 31, 1969, Northern is expected to announce profits of $2.4 million.

Questioned about Lennon and McCartney’s stake in Northern and the likelihood of their eventually switching to Apple Music, ATV financial director Jack Gill told Billboard, “If they have an interest in the company this is a stimulus for them. If we have to have minority shareholders we could not have better ones than the Beatles.”

He added, “If they still retain their shares maybe they will consider renewing after 1973. But we have obviously faced up to the fact that they may not wish to continue, and by then we intend to develop a considerable music publishing business. This is just the basis for a marvelous start with songs like “Michelle” and “Yesterday” which have already become standards.”

Under the deal Dick James will head all ATV’s publishing activities. Pye recently launched his label DIM here, which is run by Bell in America. Pye manufactures and distributes the label, which is run independently by James’ son, Stephen James (22).

Meanwhil, Pye’s own music publishing company, Welbeck, is splitting from MCA’s Leeds Music, May 1. Leeds has previously administered Welbeck for Pye. Les Cocks, previously Pye’s general manager, has been named to head Welbeck, which will also spin off its own label later this year.

From Billboard magazine – April 12, 1969

ATV In Takeover Bid For Northern Songs; E.C. Silver, Dick James Exchange Shares

LONDON – Northern Songs, publishers of the bonanza Beatle ballads, is the target of a takeover bid by the Associated TeleVision Corporation.

ATV is making overtures from the strong bargaining position of already owning almost a third of Northern Songs equity. This results from Northern chairrnan E C. Silver and managing director Dick James accepting an exchange of their 1,604,750 Ordinary shares for a package of ATV Ordinary shares, unsecured loan stock and cash. The same offer is being extended to other Northern shareholders.

At one stage, it looked as though Northern would become the focal point of a takeover tussle between ATV and EMI, which has The Beatles under exclusive recording contract until well into 1970s. But EMI managing director John Read has discounted this.

“I’m not sure we would want to step up our investment”, he said. “We want a carefully balanced investment policy, and we already have a significant interest in The Beatles”.

Northern’s main assets, Beatle songwriters John Lennon and Paul McCartney, are believed to control about 25% of Northern’s equity. It is thought unlikely that they will sell, and reports indicate that they are unenthusiastic about the big business maneuvers centered on Northern, especially the esoteric Lennon.

Other assets or Northern Songs include the recently acquired Lawrence Wright Music catalog, for which ATV bid unsuccessfully.

From CashBox Magazine – April 12, 1969

Now someone else is after John and Paul’s affections

Bob Farmer takes a look at his pop star investments

FOR JOHN Lennon and Paul McCartney it must be all most confusing. Here they are coming home from their honeymoons only to find themselves being wooed by fresh suitors — or — at least — their Northern Songs company.

ATV, part of Sir Lew Grade’s empire, has made a takeover bid for Northern Songs said to be worth about £10 million. EMI were at one stage also interested. And now an American company is rumoured to be about to challenge the ATV offer.

What does it all mean? MONEY, for those of you sensible enough to follow me by buying some shares in Northern Songs a month ago in March. For when a company is the subject of a takeover bid, first of all the offer is for more than the company is worth, which immediately attracts people to buy up shares in the belief that they are on to something good.

So although ATV’s offer has not yet been accepted, the value of Northern Songs shares has risen steadily over the last few days to reach 39s. 4½d. You may recall that my modest six shares were bought in March for only 35s. 6d. Thus — and the takeover fight is still going on — my profit at present is 3s. 10½d. a share… 19s. 4½d. altogether.

John and Paul are said to be against the takeover although they don’t own enough of the Northern Songs shares to be able to do anything about it. But at least the ATV action shows that there are plenty of people about who still have great faith in the Beatles — despite all the knocking they have suffered recently.

Says Sir Lew Grade, head of ATV: “We are determined to buy Northern Songs — music is an essential part of our business and there’s no denying the brilliance of the Beatles as musicians.”

Stock Market closing report on my five other shares in Constellation Investments (Cliff Richard, Cream, etc.): 8s. 3d., which is 1s. 9d. more than when I bought them for 6s. 6d. each.

From Disc And Music Echo – April 12, 1969

April 11, 1969 – The Beatles will make a counter bid

On April 11, The Beatles announced they planned to make a counter bid.

Suddenly, I found a fellow turning up called Allen Klein, who represented John and Paul. I had an instinctive feeling that this fellow was going to stop me from getting the entire company.

Sir Lew Grade, head of ATV – From “The Beatles: Off the Record” by Keith Badman, 2008

We are determined to buy Northern Songs. Music is an essential part of our business and there’s no denying the brilliance of The Beatles as musicians.

Sir Lew Grade – April 12, 1969 – From “The Beatles: Off the Record” by Keith Badman, 2008

The publicity surrounding the battle for control of Northern Songs prompted several broker firms to form an alliance known as the Consortium, which quickly acquired 14% of the company’s shares. As a result, both ATV and The Beatles found themselves needing the Consortium’s support to gain a controlling stake.

The Consortium was composed of three prominent London brokers — Astaire & Co., W.I. Carr, and Spencer Thornton — and represented clients such as theatre owners Howard & Wyndham, the Ebor Unit Trust, the Slater Walker Investment Trust, and merchant bankers Arbuthnot Latham.

Howard and Wyndham had bought up some five percent of Northern in the market during February and March, a beautifully time initiative taken by American show business lawyer, Ralph Fields. A fair number of the Northern shares picked up by Howard and Wyndham must have drifted onto the market from Clive Epstein’s holdings, which had been skimmed off Nems’ original 7.5 percent stake in Northern when Triumph bought Nems in February.

From “Apple to the Core: The Unmaking of the Beatles” by Peter McCabe and Robert D. Schonfeld (1972)

April 13, 1969 – The Sunday Times article about Allen Klein

On April 13, 1969, The Sunday Times published a scathing article titled “The Toughest Wheeler-Dealer in the Pop Jungle”, which severely damaged Allen Klein’s reputation in the UK. The piece described Klein’s success as driven by “a startling blend of bluff, sheer determination, and financial agility, together with an instinct for publicity and the ability to lie like a trooper.”

The article revealed that Klein had been involved in 40 lawsuits, was under investigation by the U.S. Securities and Exchange Commission (SEC), and that North American royalties from the Rolling Stones were being paid directly into his own company.

The article was fuelled by information leaked by Leonard Richenberg, chairman of Triumph Investment Trust, who had secretly commissioned a private investigation into Klein’s business dealings. Richenberg had clashed with Klein over the 25% royalty payments The Beatles were obligated to make to NEMS / Nemperor, prompting him to take action.

I commissioned a Bishop’s report on Klein, a tactic which much impressed him later, as it was the kind of move an old warrior like Klein would respect. It showed he was involved in a number of lawsuits.

Leonard Richenberg – From “Apple to the Core: The Unmaking of the Beatles” by Peter McCabe and Robert D. Schonfeld (1972)

The article prompted Paul McCartney’s father-in-law and business adviser, Lee Eastman, to travel from New York to London. Upon arrival, Eastman first met with Leonard Richenberg to explore the possibility of The Beatles buying back NEMS — but the talks were unsuccessful.

Lee Eastman, joined by his son John Eastman, subsequently met with the four Beatles and Allen Klein. The meeting was tense and unproductive. By its conclusion, it was clear that Allen Klein had secured the dominant role in shaping The Beatles’ strategy regarding Northern Songs moving forward.

We arranged to see Eastman and Klein together in a hotel where one of them was staying. For the four Beatles and Yoko to go and see them both. We hadn’t been in there more than a few minutes when Lee Eastman was having something like an epileptic fit, and screaming at Allen that he was “the lowest scum on earth”, and calling him all sorts of names. Allen was sitting there, taking it, you know, just takin’ it. Eastman was abusing him with class snobbery.

What Eastman didn’t know then is that Neil [Aspinall] had been in New York and found out that Lee Eastman’s real name was Lee Epstein! That’s the kind of people they are. But Paul fell for that bullshit, because Eastman’s got Picassos on the wall and because he’s got some sort of East Coast suit, form and not substance. Now, that’s McCartney.

We were all still not sure and they brought in this fella, and he had a fuckin’ fit. We had thought it was one in a million but that was enough for me, soon as he started nailing Klein on his taste. Paul was getting in little digs about Allen’s dress – who the fuck does he think he is? Him talking about dress! Man, so that was it, and we said, “Fuck it!”

I wouldn’t let Eastman near me; I wouldn’t let a fuckin’ animal like that who has a mind like that near me. Who despises me, too, despises me because of what I am and what I look like. This was supposed to be the guy who was taking over the multi-million dollar corporation, and it was going to be slick. Paul was sort of intimating that Allen’s business offices on Broadway were not nice enough – as if that made any fuckin’ difference! Eastman was in the good section of town. “Oh, boy, man, that’s where it’s at!” And Eastman’s office has got class! I don’t care if this is fuckin’ red white and blue, I don’t care what Allen dresses like, he’s a human being, man.

The more we said “no” the more (Paul) said “yes”. Eastman went mad and shouted and all that. I didn’t know what Paul was thinking when he was in the room; I mean, his heart must have sunk.

John Lennon

We were in opposition right from the beginning. I’m a pretty patient sort of guy. In all our arguments, I never raised my voice once.

John Eastman – From “Paul McCartney A Life” by Philip Norman, 2016

The Beatles’ approach to securing control of Northern Songs differed significantly from ATV’s. While ATV aimed to acquire a large majority and consolidate power, The Beatles pursued a narrower strategy focused on obtaining just enough shares to reach a 51% controlling stake. At the same time, they were also negotiating with Triumph Investment Trust to regain control of NEMS, placing considerable strain on their finances. As a result, their bid required acquiring only the minimum number of additional shares, and even this would involve putting their own shares up as collateral to fund the purchase.

The plan was to launch a public offer of £2.1 million to acquire an additional 21.3% of Northern Songs—bringing their total holdings (which already stood at 29.7%) to a slim majority of 51%. The Beatles contributed around £1 million themselves, while their merchant bank, Henry Ansbacher & Co., provided the remaining £1.1 million. This loan was secured using a mix of collateral: Apple Corps shares, John Lennon’s entire stake in Northern Songs (valued at £1.25 million), and shares held by Allen Klein’s company ABKCO in the MGM film corporation (valued at £640,000).

In parallel, Klein approached EMI and Capitol Records to seek additional support, but both companies declined to get involved.

On April 18, 1969, The Beatles publicly announced their intention to bid for control of Northern Songs.

BEATLES IN BATTLE TO BLOCK ATV BID

The Beatles hope to announce a rival scheme on Thursday to block ATV’s bid for Northern Songs. The group has called in the city merchant bank of Henry Ansbacher as financial adviser in their hopes of thwarting the ATV bid which values the whole publishing company at over £9 million.

ATV’s formal offer for Northern went out on Friday. The company is offering a mixture of shares, loan stock and cash for Northern shares.

The Beatles’ advisers have been trying to find a way of blocking ATV without making a costly £4 million cash offer for the shares which are not pledged to either side.

Both rival groups are reckoned to hold about 35 per cent of the shares. If Triumph Investment Trust, which controls NEMS, accepts ATV’s offer as seems likely, Sir Lew Grade’s company will be within 10 per cent of the figure it needs for control.

But even if they lose the battle the Beatles will not relinquish the shares they and their supporters already hold.

If the Beatles put up cash for their bid shareholders selling out to them will have to pay capital gains tax.

The Beatles are seeking to block ATV because they want to reduce the stake held by outsiders in their talent — in this case John Lennon’s and Paul McCartney’s songwriting abilities.

With each side already able to muster over a third of the share and both having said they will not give these up no other bidder is expected to materialise.

From Record Retailer – April 16, 1969

Klein to sue Times Newspapers

ALLEN KLEIN has served a writ for alleged libel against Times Newspapers following an article about him in the Sunday Times. Solicitors acting for Klein issued the following statement:

“Mr Klein having taken the advice of leading counsel has issued and has had served a writ against Times Newspapers Ltd for damages for libel contained in the article ‘Insight Investigates The Toughest Wheeler-Dealer In The Pop Jungle’ published by Times Newspapers Ltd in the issue of the Sunday Times dated 13th April 1969.”

From Record Retailer – April 23, 1969

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