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General Statements: •As the topic turns to money during a 1966 interview: •Reporter: "There's a rumor you own a bank in England.
Is that correct?" •Reporter: "What is your deal with EMI which, of course,
is Capitol Records?" •With Epstein overseeing the group's affairs, the four Beatles enjoyed a relatively carefree existence when it came to financial matters. If they wanted any item-be it a car, a house, or new clothes-they simply charged it to NEMS and the bill was paid no questions asked. With NEMS so thoroughly involved with managing their finances, the four Beatles made very few personal investments during the peak years of Beatlemania. (Granados, S. Those Were the Days, p. 3). •Alistair Taylor lifted the flap and took out two pieces of paper. One was an EMI 'with compliments' slip. The message typed on it read 'enclosed for three months record sales'. The second piece of paper was a cheque for £6,000,000! Alistair went cold. His first reaction was to calculate that, in a full year, EMI would be paying The Beatles £24,000,000. Just out of interest, at today's (2003) prices, that would round up to £120,000,000, least. His second reaction was disbelief that EMI should send out such a huge sum in an unsealed envelope. In those days it cost less to send inland mail in an unsealed envelope (Gunby, G. Hello Goodbye, p. 21-22). •Question: How much are the American tax authorities making
off you? •Question: Which do you like more. The fans or the money? •When asked if the Beatles wouldn't just rather sit on their fat wallets instead of working all the time, Paul said: When we're tired we take vacations on our fat wallets (New York Aug '66). •Interview in Montreal: A reporter asked if they were appearing in any other Canadian cities. The reply was that they would "appear anywhere if the people had enough money (Kendall p. 112). •Brian Epstein hired a chartered airplane for $37,950.50 for the American '64 tour (Lewisohn. Chronicle p. 140) •The biggest key was the 25 percent clause that Brian had hidden from them. When he had renegotiated their royalty deal with EMI (and with Capitol in the United States), he had inserted a clause guaranteeing that 25 percent of all Beatle record royalties would continue to go to NEMS for nine years, even if the Beatles didn't renew their management contract with Brian. The Beatles had signed the contract without scrutinizing the fine print (Flippo, p. 244). •The Beatles were just beginning to educate themselves about their money. For years all that they saw was the fifty pounds a week apiece doled out to them by Brian. It was later increased to one hundred pounds a week. True, all their expenses were picked up and if John wanted a new Rolls-Royce, he had only to say the word (Flippo, p. 199). •When asked how they ad up success, the Beatles replied in unison: Money! (Interview '65). •Canadian financial figures: A working man's wage was around $7,000, which might be enough to support an entire family. Three-bedroom houses in our largest two cities cost about 15,000. At Simpson's, a two-trouser, wool suit sold for $72. Speedy muffler would install a new muffler for $7.95. A one-pound bag of Maxwell house coffee cost 89 cents at IGA. A Beatles' album at Eaton's cost $3.30 (Kendall, p. 9). •The Greedy Hand: How Taxes Drive Honest Americans Crazy and What To Do About It, by Amity Shlaes, New York: Random House, 240 pages, $24.00. To her credit, Shlaes attacks the idea of higher tax rates for higher-income people. She quotes George Harrison's 1966 song "Taxman," written shortly after the Beatles' success put them into Britain's highest tax bracket. Shlaes doesn't mention it, but the top British tax rate on "earned" income at the time was 83 percent, and the top rate on income from dividends and interest was 98 percent. The Beatles were shocked to be paying such taxes; thus the song, which, she notes, makes specific references to the tax collectors, Prime Minister Wilson and Prime Minister-to-be Heath. •Robert Graves said, •The boys carry very little cash; there isn't much opportunity for them to spend it casually. Neither are their houses riddled with safes, as you might suppose. John's attitude is, "You worry about that, I never carry any" (Taylor, A. p. 64). •Just after Paul returned to London, a new company called Beatles & Co. was formed on April 19. Their original company, Beatles, Ltd., gave the new company £800,000 for a share of it. Thus the Beatles were apparently able to pay themselves £200,000 each, just for reorganizing themselves. The only one of the Beatles who has ever commented on that deal, John, said that he didn't remember signing it (Flippo, p. 233). •For $10,000 the Beatles would play three shows for the Ed Sullivan Show, two of them live. $3500 for the two live shows and $3000 for the taped performance on Feb 23. A top act would usually earn $7500 for one appearance on the show (Lewisohn. Chronicle p. 94).
•John: But on the business end he [Brian] ripped us off on the Seltaeb thing McCabe/Schonfeld, p, 91. (For the Record). •To be fair to Epstein, few music industry professionals at the time-let alone a music industry novice like Epstein-could ever imagine just how much money music merchandising could generate. To Epstein, any revenue from the sale of such ancillary "Beatle products" was just "found money" to supplement the Beatles' live and recording income (Granados, S. Those Were the Days, p. 3). •Seltaeb, the official merchandising company, sold over 150 different items. NEMS received 10% until August of '64 when it was raised to 46% (Mackenzie). •A Liverpool bakery made Ringo dolls. The Beatles received 1p for each doll sold. 100,000 sold in two days. •A Blackpool company received orders for 10 million sticks of licorice rock with the Beatles' name on it. •A U.S. company wrote asking if they could sell their bath water at $1.00 bottle (Taylor). •'I Love Ringo' lapel buttons outsold all associated merchandise at the time (Clayson, p. 85). •Beatles' Chewing gum made millions of dollars within a few months. •REMCO, a large American toy manufacturer, had initially produced 100,000 Beatle dolls and had orders for 500,000 more. •A Denver hotel sold the Beatles' bed linen to a business consortium who in-turn sold the linen for $10.00 for a 3-inch square. •In late '63 merchandising rights were a tangled mess. Brian handed it over to his solicitor, David Jacobs. He was to prosecute infringements and issue licenses at his discretion. Jacobs was busy so he handed it to chief clerk Edward Marke who knew little of the merchandising business. So Jacobs looked for someone else. He contacted Nicky Byrne, whom he had met at a party. Byrne and associates took up residence at the Drake in NYC in '64. They would issue a license in exchange for 10 percent of manufacturing royalties. •Reliant Shirt Corporation paid $25,000 for the exclusive rights to make and produce Beatle T-shirts in 3 factories that they had purchased just for the purpose of making the shirts. In 3 days they sold 1 million shirts. •Beatles Bubble Gum originally sold for 5¢ per pack. •Ringo: Anytime you spell beetle with an 'a' in it we get some money (Interview, '65). •Lord Peregrine Eliot (one of Seltaeb's partners) remembers going to Seltaeb office one or two times a week to draw $1,000 from petty cash. •A Toronto wig-maker sold eighty Beatle wigs in a month in '64. A far cheaper version endorsed by the band and guaranteed to fit all head sizes sold by the thousands (Kendall, p. 5). •A bakery in Hamilton, Ontario could barely meet the demand for it's special ninety-eight-cent Beatle cakes, scrumptious cupcake like creations adorned with vague likenesses of the band (Kendall, p. 16). •Pillow cases from the Beatles' hotel room in Kansas City were sold to a company for $1,000 each. The pillow cases were cut up into 160,000 pieces and sold for $1.00 each. •In New York City an entrepreneur marketed empty cans of "Beatle Breath". •The Observer reports that a factory in the U.S. is manufacturing over 35,000 Beatle wigs per day. •The hotel manager in Kansas City sold 16 sheets and eight pillow cases to two Chicago businessmen for $750 after the Beatles stayed there. The 3-inch squares were sold for $10 a piece (Lewisohn. Chronicle p. 139).
David Jacobs/Nicky Byrne: •Brian reportedly wanted Beatle merchandise to be high quality. He did want the product to break or function poorly (Brown, p. 126). •Brian hired David Jacobs as of his Solicitor in ’63. “From then on all legal decisions and contracts would be made with David Jacobs advice, and it was Jacobs’ law office that took over the task of sorting out the merchandising offers” (Brown, 127). •David Jacobs, Brian’s Solicitor, had many celebrity clients. He was especially well-known for winning a large settlement for pianist Liberace from The Daily Mirror. •Jacobs advised Brian to set up a separate company for licensed products. •In '63 Seltaeb was in chaos. NEMS was blamed for granting some licenses to others inappropriately. Some of Byrnes partners claimed he failed to pass on Beatles' royalties, or taxes to the U.S. They also claimed he spent over $50,000 on personal expenses including thousands on hotel bills, two Cadillac's, a 24-hour chauffeur, and a girlfriend's charge account (Norman, p. 253). •Jacobs suggested that the merchandising be handled by Nicky Byrne. Byrne had been involved in several business ventures and was known to Jacobs through social gatherings. Byrnes assumed the responsibility of handling the merchandising by first forming a partnership with five friends, all in their twenties, none of whom were known by Brian Epstein or David Jacobs. One of the partners was allowed to buy a 20 percent share in the company for one thousand pounds (Brown, p. 127). •In late '63 merchandising rights were a tangled mess. Brian handed it over to his solicitor, David Jacobs. He was to prosecute infringements and issue licenses at his discretion. Jacobs was busy so he handed it to chief clerk Edward Marke who knew little of the merchandising business. So Jacobs looked for someone else. He contacted Nicky Byrne, whom he had met at a party. Byrne and associates took up residence at the Drake in NYC in '64. They would issue a license in exchange for 10 percent of manufacturing royalties. •Nicky Byrne: Brian Epstein had a very bad name in the business world at the time. Nobody knew who was licensed to make Beatle goods and who wasn't. Byrne also stated that he would pay Brian his ten percent within seven days of receipts and that Brian asked him to work for him for £1,000 per year. •The Beatles’ merchandising, operated by Nicky Byrne and partners, was incorporated as Stramsact in the U.K. and Seltaeb in the U.S. •David Jacobs, with power of attorney for Brian, accepted 10% as the percentage of profits that would go to NEMS (Brown, p. 128). •Nicky Byrne claimed that he was offered half a million pounds for his share of Seltaeb by the Columbia Pictures Corporation, with Ferrari automobiles thrown in for all the partners. •Byrnes also stated that he and his partners were living at the Drake Hotel and had offices on Fifth Avenue. •Byrnes hired two limousines on twenty-four call and hired a helicopter to shuttle businessmen to and from the airport. •In early '64 Stramsact, who had the power to grant merchandising licenses, granted a license to six young Englishmen who incorporate a U.S. company, Seltaeb, to act as their agent in America (Schultheiss 76).
•Northern Songs: see also the section on The Beatles' Legal
Matters and Negotiations. •Northern Songs is registered in February '63. Dick James retains 49 A shares. Lennon and McCartney 51 A shares. B shares went to John (19) and Paul (20), NEMS (10). In February '65 the stock went public with 5 million shares. •Northern Songs was the first song publishing company to be listed on the London Stock Exchange. Initial 7s9d per share. •Northern Songs profit for 1965 was a reported £621,000 (Coleman). •By the time John had a chance to clarify his 'Bigger than Jesus' statement, Northern Songs had dropped from $1.64 to $1.24 a share (Knight). •Northern Songs reported in February 67 that their profits for 66-67 would be £810,000. •For a well-documented account of Northern Songs from Rockmine.com archives click here. •Flying was credited to Lennon/McCartney/Harrison/Starr and copyrighted in the UK by Northern Songs sometime in '68 (Schultheiss 199). •Beatles Song Firm Rallies After Fall. August 30, 1967. (Special thanks to John Whelan for this article). Over £250,000 was wiped off the market value of Northern Songs yesterday, as dealers reacted immediately to the weekend death of the Beatles' manager Brian Epstein. But the shares soon rallied strongly and by the close they stood at 17s. 7.5d., a gain of 1.5d. on the day. Northern Songs controls the copyrights for Beatles compositions, publishes the songs and collects royalties on each record sold. The fall was not unexpected as Epstein's executors may be able to choose between Friday night's closing price or a price when dealings are resumed, whichever is lowest, for probate valuation purposes. The executors of Joseph Collier, former president of the giant United Drapery Stores group who also died on Sunday, were in the same position, but U.D.S. shares stayed rock steady all day and closed unchanged at 27s. Epstein's pop empire was based on Nems Enterprises, a private company in which he controlled some 70 per cent of the 10,000 shares. The Beatles each hold only 250 Nems shares. Epstein's personal stake in Northern Songs was relatively small — 6,000 shares — but Nems had a 7.5 per cent holding in the company. But the Beatles' personal fortunes are really linked to one key company, Beatles Ltd., Formed in May 1963, its £100 capital is split equally between the four, and Brian Epstein was one of four directors. The grand total so far has been estimated as something in the region of a staggering £15m. Nems would take a 25 per cent cut of this as the Beatles' agents, out the Beatles' stake in Nems means they do not kiss the cash goodbye altogether. Another private company, Suba Films, handles the profits from Beatles films — which could be around £3m. — and again the capital is split equally four ways.
•With NEMS so thoroughly involved with managing their finances, the four Beatles made very few financial investments during the peak years of Beatlemania (Granados, p 3. Those Were the Days). •Maureen had to ask NEMS' secretary Barbara if she needed more than the several thousand with which Ringo regularly put in her bank account (Clayson, p. 113). •NEMS issued 10,000 £1 shares in April of '64. Each Beatle received 250 (Miles). •Mackenzie states 3,000 investors plus an exchange leave John and Paul with 15%, NEMS 71/2% and George and Ringo 3% (Mackenzie). •Nicky Byrnes claimed $5 million in losses from NEMS (Norman, p. 285). •Brian brought in Robert Stigwood, an Australian, as co-managing director. Brian left most of the NEMS artists in Stigwood's hands and he, himself, designated most of his time to the Beatles. •Robert Stigwood was co-managing director of NEMS in 1967. Brian was not happy with his spending. He upset Brian once by renting a yacht for the Bee Gees in '67. Shortly after this Brian decided he did not want Stigwood as an employee of NEMS. •In 1966 Brian turned down a $20 million offer from an American for Nems (McCabe and Schonfeld, Apple to the Core. p. 103)
Miscellaneous: •Beatles stayed at the Warwick Hotel on an early tour at $302 per day. The entire 32nd floor was rented for their entourage. •There were rumors of bribing schools girls to go to the airport for the arrival of the Beatles in the US. •A memo from Olympic Studios charged EMI for: Four track recording £23 per hour + Copying £3 per hour + 3 reels of 1/2 " tape £10 per reel + 1/2 reel of 1/4 " tape £4.5s per reel. Totals: 103.10s for recording, 17.50 for recording , 30.00 for the 1/2" reels, 2.2s.6d for the 1/4" reel, 36.00 for the overtime of engineers, 10.10s for the hire of harpsichord. Total: 200.2s.6d. Authorized by George Martin. Billed on Nov 22, paid on Nov 30. Job #1043 (Lewisohn. Chronicle p. 256). •John: He [Brian] came to us once in Paris and said he'd had enough, and he wanted to sell us to Delfont or Grade, I've forgotten which one. And we told him-I told him personally-that we would stop. We all said, "Whatever you do, if you do that, we stop now. We don't play anymore, and we disband. We're not going to let anyone else have us, especially them." Because, after all, we all know who they were...they'd been the enemy from the start. It was people like them who Brian came up against who went, "Go back to the provinces, sonny". And all that sh** that he'd been given from all those big-time Londoners who all come from Poland (McCabe/Schonfeld p.98. For the Record). •There was a 50-50 split between the Beatles and the Philippine promoter. The "official" funds were wired to Lloyd's Bank PLC in London. That amount is what the British Inland Revenue Service was given as a figure for income (Lipack, p. 29). •The Beatles arrived in Vancouver too late to use the hotel rooms reserved for them at the Hotel Georgia. Brian agreed to pay the $350 for the luxury suites anyway (Kendall, p. 59). •In Toronto the Beatles stayed in a three-bedroom vice-regal suite for $85 night. •NBC TV purchased a clip of the Beatles playing 'She Loves You' from the BBC for the Jack Paar Show. Brian was furious and thought that this would cause problems with the Ed Sullivan Show deal. The BBC even tried to rescind the sale of the tape. Brian threatened to not allow the Beatles to appear on the BBC again. He did not follow through on the threat. The BBC paid £225 for the clip (Lewisohn. Chronicle p. 120). •The Beatles wanted to buy an island in '67, on which to live, partly because "Harold Wilson's taxing us something rotten". Alistair Taylor found an island for £90,000 that included four beaches, olive groves, half a dozen tall Greek houses, boats, businesses, and a gently curving bay. British law prohibited its citizens from taking large sums of money out of the country, and the same law applies to spending money on property abroad. One must purchase currency called property dollars from the British government and pay with those. After applying for the £90,000 in property notes the government turned down their request. Eventually the government did agree (but to a maximum of £90,000) and sold them to the Beatles at a premium of a certain percent. The limit of £90,000 meant that there would not be cash available to furnish and improve the island. Alistair was in negotiations with the government to increase the limit when the Beatles decided to cancel the project. The property dollars were sold back to the government at a profit of six or seven percent because the premium rate on the dollars had gone up since their purchase (Taylor, A. 85, 87, and 93). •The Beatles attempted to make a special record in November '63 to give to their fan club members: The Beatles Christmas Record. They planned to distribute 25,000 but eventually sent out 31,000 because of the increase in Fan Club memberships. Even after that there were over 1,000 people who sent in their applications with the 5/- fee. It would have been too expensive to order an extra 1,000 copies because the quantity was so low. So the Fan Club sent out a free photo of the Beatles to the members not receiving the disc. (Letter from the Official Beatles Fan Club).
•By August of '67 the Beatles had earned, by one estimate, £25 million. •The Wall Street Journal estimated that by the end of '64 there will have been $50 million in records sold in the U.S. •Q: "On a percentage basis these days, what are you taking out of America compared with Britain, in earning power?" •The Beatles had several other sources of revenue prior to 1967. Their most significant collective investment was Subafilms, the NEMS-run film company that controlled the group's share of the Beatles' film projects, responsible for producing the Beatles' promotional films (in the days before videos) for television (Granados, p. 3-4. Those Were the Days). •PAUL: "Money. Money." •When as how their stock was doing: John said "Fine,
thank you", Ringo said "It went down but it's coming up
again", George said, "It's gone down", and Ringo
replied "It's just like any other stock" (Hollywood '66). |
•Reporter:
How much money do you make collectively?