ATV finalizes its acquisition of Northern Songs

September to November 1969

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About

The music publishing company Northern Songs was created in February 1963  founded by music publisher Dick James and his partner Charles Silver to publish songs written by John Lennon and Paul McCartney.

The arrival of Allen Klein in the Beatles business decided Dick James and Charles Silver, in March 1969, to finally sell their shares in Northern Songs to ATV, giving John and Paul no notice or the chance to buy them out.

April and May saw a bitter fight for the control of Northern Songs, between ATV (owning 35% of the shares) and The Beatles (owning 29.7%). On May 19, 1969, it was announced that ATV had partnered with the Consortium, an alliance of some broker firms controlling 14% of the company, to gain control of the company.


Negotiations continued throughout the summer and into the autumn of 1969, as ATV and The Beatles still wanted to gain a majority stake (above 50%) in the company.

Allen Klein approached members of the Consortium and made them some offers to buy their shares when their agreement with ATV would expire in May 1970, but nothing came out of those discussions.


Battle Renews Re : Northern Control

LONDON – Another battle for control of Northern Songs seems imminent. Associated Television won a narrow victory over The Beatles earlier this year with the aid of a consortium of brokers, whose 14% holding caused a virtual stalemate in May. Now it appears The Beatles have made approaches to the consortium through American stockbroker A. J. Butler, who is expected to make an improved and formal offer for the consortium’s Northern slice. Bank of England and Takeover Panel permission would be necessary before any deal could go through, however, The consortium’s agreement with ATV gives that company first refusal of the consortium’s shares and support on the board until May next year. but does not preclude the stockbrokers negotiating future contracts with interested parties now.

Meanwhile, Beatles business manager Allen Klein is believed to have agreed to a new royalty deal for the group with the EMI organisation. It will cover the remainder of the present nine-year contract expiring in 1975, and is understood to give The Beatles an appreciable increase in American disk royalties through Capitol in return for a guaranteed amount of product.

From CashBox Magazine – September 27, 1969
From CashBox Magazine – September 27, 1969

Allen Klein then turned his attention to ATV.

[Klein] came to see Sir Lew [Grade, chairman of ATV] with vague terms under which he would see to it that we got control of Northern by delivering the Beatles’ shares to us. At that time he was there to knock the Consortium. The main concession was that Apple would get sub-publishing rights for the Beatles’ songs throughout the United States and Canada.

We were willing to consider it but told Klein that we were not in a position to do so at that time, because of our agreement with the Consortium.

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

ATV, in the meantime, was not satisfied with the situation and wanted to acquire a majority stake in Northern Songs, rather than relying on an agreement with the Consortium. But they were in a tough position, as their own share price during the summer was at a low point, and if they were to make an offer to buy shares from the Consortium, they would have to propose the same price to all shareholders, including The Beatles, a situation they wanted to avoid.

But in early September, the Consortium started to fall apart and some members decided to sell their shares. By the terms of the agreements signed in May, the other parties of the agreement had a right of pre-emption, and ATV took the opportunity to buy some more shares.

We thought we’d get their shares in the end. It was very difficult to deal with a Consortium of that nature – with so many different interests. Anyway, what right has a broker to pledge his client’s shares? If the client decided to sell that was that. The agreement meant nothing.

Jack Gill – ATV financial director – From “Apple to the Core: The Unmaking of the Beatles” by Peter McCabe and Robert D. Schonfeld (1972)

On September 8, 1969, ATV announced it has increased its stake in Northern Songs, from 35% to 38%.

Peter Donald was the chairman of Howard and Wyndham and one of the largest members of the Consortium and went to negotiate with Sir Lew Grade and Jack Gill. On September 19, ATV bought shares from the Consortium and reached just under 50% ownership of Northern Songs. On September 25, ATV again increased its shareholding to 54%, effectively controlling Northern Songs.

One morning I called Peter Donald, who by that time had acquired control of the Howard and Wyndham Theatres, as well as some theatres in Scotland. Peter Donald’s company controlled 14 per cent of the Northern Songs shares. I had a strange feeling about Alan Klein because of all these unnecessary delays, so, when I called Peter Donald, I said, ‘I want to buy your 14 per cent of Northern Songs. How much do you want for it?’ We agreed a price and did the deal on the telephone. We now had well over 54 per cent of the company and therefore controlled Northern Songs. Alan Klein called me late that afternoon, and I must give him credit for what he said to me. ‘Well,’ he said, ‘I have to admit it. You beat me to the punch. We’re now ready to sell you the shares at the same price you paid Peter Donald.’ He said he’d been considering doing the deal with Donald himself, but had obviously left it too late.

And that, my friends, is how we acquired the Beatles catalogue and got into the music business.

Sir Lew Grade, head of ATV (Associated Television) – From “Still Dancing : my story” by Lew Grade

ATV Nears Control Of Northern

LONDON – Associated Television seems to be very close to total victory in the prolonged struggle for control of Northern songs. The key 13% holding in Northern stock controlled by the Astaire – W. I. Carr consortium of brokers has been bought by ATV at 40 shillings per share, thus effectively ending the hopes of the Beatles of capturing their publishing company. It is understood that the broker consortium accepted the ATV offer because they believed that if the Beatles had retaliated with an even higher offer and ATV had agreed to sell its holding at that price, the Beatle faction would have been unable to raise sufficient cash to implement their offer. Meanwhile, John Lennon and Paul McCartney issued a writ through Maclen Music on September 16th requiring an account of money possessed or received by Northern under an agreement dated February 11th, 1965 and seeking an order that Northern should pay Maclen half of any money which, following an audit, is shown to have been possessed by the defendant, together with interest at an annual rate of 6%. Under the 1965 agreement of all broadcast and performance fees are paid by Northern to Maclen. Northern intends to contest the writ.

From CashBox Magazine – October 11, 1969
From CashBox Magazine – October 11, 1969

Allen Klein went back to ATV and Sir Lew Grade, for another round of negotiations and an agreement was found but fell through due to obstruction by John and Lee Eastman:

The broad lines of the ATV-Beatle agreement negotiated by Klein were that: (1) ATV would buy all their Northern shares in exchange for loan stock and cash; (2) The Beatles would withdraw the outstanding writs lodged against Northern Songs by Maclen (Music); (3) John and Paul would re-sign as songwriters until 1976 – and George and Ringo would switch from Apple Publishing to Northern, also until 1976; (4) Lenmac would be sold back to John Lennon and Paul McCartney, and (5) Apple would get sub-publishing rights in the United States.

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

We all finally agreed. It was a very good deal for both sides. Heads of the agreement were drawn up with our respective lawyers. Then, Allen Klein couldn’t get the Eastmans and Paul to agree and so it fell through.

John and Lee Eastman had stopped the deal. They wouldn’t let Paul be a party to an agreement negotiated by Klein on behalf of all the Beatles. There was no way the two Beatle factions could agree.

Klein was very sorry and I was very sorry because part of the deal was that we’d have got Harrison and Ringo, who at the time really didn’t mean much. Of course, George Harrison has since been a great success as a songwriter.

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

I can’t understand it to this day. [The Eastmans and McCartney] were mad not to take ATV shares considering what they’d have been getting.

Sir Lew Grade, head of ATV (Associated Television) – From “Apple to the Core: The Unmaking of the Beatles” by Peter McCabe and Robert D. Schonfeld (1972)

After this missed opportunity, The Beatles finally announced they were selling their Northern Songs shares to ATV, but ATV was not ready to acquire them, considering it was still in their interest to keep The Beatles as shareholders of the company to keep them motivated.

However, the City Takeover Panel (a regulatory body that ensures all shareholders are treated equally during takeover bids) asked ATV to propose to The Beatles and other minority stakeholders the same offer they’ve made to the Consortium some weeks ago.

If Jack Gill was ready to resist the pressure of the City Takeover Panel, the ATV board finally decided to acquire The Beatles’ shares. This was publicly announced on October 22, 1969.

The news, when it reached Apple – by a tip-off from the Financial Times – sounded very like defeat. Allen Klein, interviewed during his customary afternoon breakfast, claimed it as a victory. A threatened lawsuit against Northern for £5m in ‘unpaid’ Beatle royalties helped to persuade ATV to pay cash rather than stock for the Beatles’ holdings. Klein could thus congratulate himself on having enriched John and Paul by about a million and a half pounds each, and Ringo by £80,000.

From “Shout!: The True Story of the Beatles” by Philip Norman

Press Office Release to UPI, AP, Reuters, PA: On behalf of The Beatles and their company, Apple Corps, their business manager Allen Klein of ABKCO Industries after discussion with The Beatles announced in New York today that all negotiations between The Beatles, Associated Television, and Northern Songs have been terminated by The Beatles. All of The Beatles and their companies intend to sell all their shares in Northern Songs to Associated Television at a price in accordance with the terms laid down by the takeover panel. John Lennon and Paul McCartney have no intention of involving themselves in any further relationship with Northern Songs or Associated Television beyond the fulfillment of their songwriting contract to February 1973. The Beatles intend to keep all their rights within their own company, Apple, which has divisions in records, music publishing, motion pictures, and television. After discussions with The Beatles’ solicitors and after taking advice of counsel, the writ served upon Northern Songs by The Beatles’ own Maclen Company will not be withdrawn and a statement of claim will be served within the next few days.

From “The Longest Cocktail Party: An Insider Account of The Beatles & the Wild Rise and Fall of Their Multi-Million Dollar Apple Empire” by Richard DiLello

Beatles Selling Northern Holdings To Associated TV

NEW YORK — Bringing the Beatles – Associated Television Co. stock battle to an end, the Beatles are selling their shares of Northern Songs to ATV, which already controls the company. Stock sale is said to amount to $4.8 million.

An announcement from Apple Corp., on behalf of the Beatles and their companies, after discussions with their business manager, ABKCO Industries, and its president Allen Klein, indicated that Lennon and McCartney have “no intention of involving themselves in any further relationship with Northern Songs or Associated TeleviSion beyond the fulfillment of their songwriting contract to Feb., 1973”. Further, the statement said, the Beatles intend to keep all their rights within their own company, Apple, which has divisions in records, music publishing, films and television.

“After discussions with the Beatles solicitors,” the statement concluded, and after taking advice of counsel the writ served upon Northern Songs by the Beatles own Maclen co. will not be withdrawn and a statement of claim will be served within the next few days.” This refers to a writ issued by Lennon & McCartney through Maclen Music on Sept. 16 requiring an account of money possessed or received by Northern under an agreement dated Feb. 11, 1965 and seeking an order that Northern should pay Maclen half of any money which, following an audit, is shown to have been possessed by the defendant, together with interest at an annual rate of 6%

From CashBox Magazine – October 25, 1969
From CashBox Magazine – October 25, 1969

ATV then continued to acquire the remaining shares from minority stakeholders. Mid-December 1969, it was announced they had acquired 96%. In January 1970, they reached 99% ownership, the 1% remaining shares being owned by Beatles fans difficult to locate.


YOUR MONEY by ROBERT HEAD

A HANDFUL of Beatles fans are holding up final completion of an important City takeover.

This extraordinary situation was spelt out for me yesterday by Mr. Jack Gill, finance director of ATV, which last year made a bid for Northern Songs, the company which owns copyrights on most Beatles hits.

John Lennon and Paul McCartney, big shareholders in Northern Songs, agreed to accept the bid back in October, and holders of 99 per cent of Northern Songs shares have accepted too.

The whole deal should have been tied up by now. But meetings have had to be postponed. What is blocking the deal is that the odd one per cent of the shares is spread around 500 or so Beatles fans who bought themselves a few when their idols were launched on the Stock Exchange.

They may not hold many shares. But counting heads rather than shares, these fans add up to more than 25 per cent of the total number of individual shareholders. So until more of them can be rounded up and persuaded to accept the bid, ATV cannot, under the Companies Act, secure the necessary 75 per cent majority of shareholders needed to complete the deal.

Mr. Gill, who is now chairman of Northern Songs, told me: “There is a large number of Beatles fans spread throughout the world whom we just cannot trace, though we are still trying.

In the company secretary’s office at Northern Songs, I was told: “It is more like a missing persons bureau here. We are still sending reminders about the offer to girls in America, Scandinavia and Germany, but they come back marked ‘Not known’. In this permissive society I suppose people move around quicker.

Only about fifty of the missing Beatles fan live in Britain.

From Daily Mirror, January 28, 1970
From Daily Mirror, January 28, 1970

Last updated on February 26, 2022

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