Sir Lew Grade and ATV connection

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Sir Lew Grade

...

In 1969, Grade scored one of the biggest coups of his career when he acquired 35 percent of Northern Songs, the publishing company founded by his one-time client d**k James, which included all but three of the Beatles [+]' original songs.

At the time, Lennon and McCartney and the entire Beatles [+] organization were in disarray, in the midst of serious business and personal disputes that culminated in the collapse of their effort to keep Grade away from ownership of their songs.

Grade was not a favorite of John Lennon [+]'s, who was then in the midst of his anti-establishment, political theater period, and regarded the cigar-chomping mogul as the worst kind of fat-cat businessman.

By the mid-1970's, however, his outlook had softened considerably, so much so that Lennon appeared in a televised tribute to Grade. He became Sir Lew Grade [+] in 1969, although his critics--highbrow writers, primarily--often called him "Sir Low Grade."

While the BBC and other companies generated programming that turned up on Masterpiece Theater, Grade's productions were more along the lines of Space: 1999 and The Persuaders.

His work was popular with a vast part of the television audience, however, and he also moved into motion pictures and miniseries, including The Exorcist, the revived Pink Panther movies, Sophie's Choice, and Jesus of Nazareth. His most beloved production, however, may have been The Muppet Show, which ran 120 episodes and yielded three feature films.

In the 1980's, Grade's ATV was bought out by Michael Jackson [+], giving the entertainer control of the Beatles [+]' songwriting catalog.

Source: http://www.music.com/person/sir_lew_grade/1/
 
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he Issue of Northern Songs Ltd:

-The Beatles' attempt to buy Northern Songs started with the involvement of Allen Klein. d**k James owned the largest share of Northern Songs at the time. Now, months earlier Sir Lew Grade contacted d**k James about acquiring Northern Songs so there was an established connection between d**k James (Northern Songs) and Sir Lew Grade (ATV) before the Beatles attempted to buy Northern Songs. So in March '69 d**k James, worried that Northern Songs might possibly become a Beatles-controlled company or that the Beatles might bring litigation against Northern Songs, started negotiations with ATV (Sir Lew Grade's company) for a possible sale. Jack Gill, ATV Financial Director, said the deal to buy Northern Songs "took five minutes".

-The Beatles attempt to block this sale started with them contacting London merchant bankers Henry Ansbacher and Company. A Mr. Ormrod, who worked for the company, worked at arranging a settlement by finding a group of London institutions who would act as partners with the Beatles. It was around this time that John Lennon stated: I'm not going to be f***ed around by men in suits sitting on their fat a**es in the City". This statement discouraged this group of London institutions from negotiating with the Beatles, although it was not probably the only reason.

-The Beatles and ATV at this time were fairly close in their ability to acquire the whole of Northern Songs. One problem for the Beatles was that they did not have enough cash to make a counter bid against ATV's proposal to buy Northern Songs. The Beatles did own 29.7% plus 0.6% in Beatles company holdings. ATV owned 35% after buying over 1.5 million shares from James and Silver. Plus ATV had already owned 137,000 shares that they had purchased from the market. By the way, Paul McCartney owned 751,000 shares at this time, John Lennon 604,750, and Ringo 40,000. George had sold his shares in '68 when his contract with Northern Songs expired, but Patti Boyd held 1,000. Triumph Investment held 237,000 (4.7%) by purchasing NEMS (Brian Epstein's company). And finally three London brokerage firms bought up 5% of Northern Songs during February and March. Many of these shares that the three brokerage firms bought most likely came from Clive Epstein's holdings.

-Now, ATV and the Beatles would both make announcements that they would offer shareholders a deal for the Northern Songs shares. One member representing the Consortium (the three London brokerage firms that bought the 5% shares mentioned in the paragraph above), Ralph Fields, persuaded the other members of this Consortium to hold out for a better deal from ATV for their shares or to arrange a deal with the Beatles. And in a further change of strategy: On April 18 the Beatles announced that they would bid for a majority control only of Northern Songs and not a complete buyout of the company.

-With talks, strategies and negotiations continuing, ATV considered selling to the Beatles if they, ATV, did not obtain control of Northern Songs. ATV also warned shareholders that if this happened then the shareholders would then be holding shares of a Beatle-controlled company. The negotiations, planning, and strategies continued until the Consortium decided to work with the Beatles to overpower ATV's bid for the remaining shares of Northern Songs. Negotiations for this broke down when, according to Ian Gordon (a representative for the Consortium), Lennon's negotiations caused it to break down. The Consortium then decided to go with ATV and, despite further uncertainties, the deal was completed and ATV had control of Northern Songs (Compiled as a synopsis from sections of Apple To The Core by Peter McCabe and Robert Schonfield).

The Issue of the Control of NEMS:

-While the Beatles were busy with Apple Corps, Clive Epstein was ready to sell NEMS. It was looked at for purchase by only a London merchant banker and a British film company. NEMS was a rather complicated matrix of companies, in fact, Brian's other financial affairs were equally involved. Brian had been offered $20 million in '66, but the company was no longer worth that amount of money without Brian to manage it. After Brian's death Nemperor Holdings was formed to become the parent company to NEMS. There was a question as to how much NEMS was worth. The answer depended on what EMI's royalty rate and payment to NEMS was going to be. NEMS was a cash company with a large tax liability and death taxes were going to cost NEMS even more.

-Triumph and the Beatles both wanted to buy NEMS and Sir Joseph Lockwood of EMI even considered a loan to the Beatles to help them buy NEMS, but Triumph prevailed after the Beatles' attempts through Allen Klein and Eastman failed.

-At this time EMI was due to pay the Beatles their royalties. The payments, as in the past, would go to NEMS first where 25% would be deducted as payment to NEMS. The Beatles at this time preferred the payment to go to Apple Corps, their own company, instead of going to NEMS. This matter went to court and it was decided that the payments would go to the nearest branch of Lloyd's Bank until the matter could be settled.

-Leonard Richenberg, representing Triumph, met with the Beatles and Allen Klein and arranged a deal: Triumph (who now owned NEMS) would not take 25% of the royalties that NEMS would normally receive for the next nine years, Triumph would get 750,000 pounds and 25% of the royalties that would be coming in after the court order was received concerning the EMI royalty payment to the Beatles for '69. Triumph also would get 50,000 pounds for NEMS, 23% of the Beatles film company Subafilms, and 5% of the Beatles record royalties from 72-76.

-NEMS, in turn, would surrender all contractual rights concerning the Beatles. They would receive an option on shares of the 4.5% NEMS owned of Northern Songs (value = pounds 355,000). The option was for a year and the price would be 30s a share. Plus, Triumph bought the Beatles 10% share of NEMS by giving the Beatles 266,000 shares of its own stock valued at pounds 420,000.

Other Statements:

-The Beatles wanted nothing to do with Northern Songs and they converted their shares into ATV stock, which ATV was legally compelled to purchase at the premium price that they had offered in their takeover bid. From a short-term financial perspective, The Beatles had profited from ATV's takeover of Northern Songs, but they also lost any chance of ever getting ownership of their songs. (Granados, S. Those Were the Days. p. 92).

-If there was a bright side to the Northern Songs debacle, it was that both George Harrison and Ringo Starr had not renewed their songwriting contracts with Northern Songs when their original contracts had expired in March 1968. Instead, they both had signed to Apple Publishing, which meant that The Beatles at least owned the songs that Harrison and Starr would write after 1968 (Granados, S. Those Were the Days. p. 93).


Source: http://www.beatlemoney.com/beatles6870negotiations.htm
 
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(NOTE: In the following article, you'll notice a refence claiming that Michael Jackson "outbid" Paul McCarney for the ATV catalog. There is some question as to whether McCartney even placed a bid for the ATV catalog.)


Claim: Michael Jackson owns the rights to the Beatles' songs.

Status: Mostly true.

Origins: This
is one of those items which is primarily true, but the answer needs to be heavily qualified in order to avoid being misleading.

First off, when we talk about someone owning the "rights" to songs, what we're discussing are publishing rights. Typically, songwriters assign the publishing rights for their songs to music publishing companies, who perform a number of marketing and promotional services to generate revenue for the songwriters they represent:

* Exploitation: One of the more important functions of song publishers is "plugging" songs -- getting artists interested in recording a songwriter's work. Your song doesn't make any money if nobody uses it, and song plugging was an especially important aspect of the publishing business prior to the 1960s, when many songwriters were not also performers and primarily supplied tunes for other singers.

* Licensing: Music publishers also administer the granting and collection of royalties for various types of licenses:

o Mechanical licenses: Songwriters receive royalties whenever someone sells recorded versions of their songs. If a songwriter records his own work, he receives royalties from his record label; if someone else records a cover version of his song, the songwriter receives royalties from that artist's record label.

o Synchronization licenses: Songwriters receive royalties when their songs are sychronized to visual images, typically for use in films, television programs, and commercials.

o Print licenses: Songwriters receive royalties for the sale of their songs in printed form, generally either as sheet music or entries in songbooks. Publishers who wish to quote or include song lyrics in a printed work must also obtain permission (and negotiate fees) with whoever holds the publishing rights to those songs.

o Performing rights licenses: Songwriters receive royalties when their songs are performed live for profit or broadcast on the radio, although these licenses are usually administered by performing rights societies such as ASCAP or BMI rather than publishing companies themselves.


The key point here is that holding the publishing rights to songs doesn't really give the rightsholder much Blue publishing meanies! "power" over those songs. The rightsholder has some latitude in negotiating royalty rates and determining who may use a song in film or print its lyrics, but that's about it. The chief benefit to owning the publishing rights of songs is that standard publishing agreements call for royalties to be split 50-50 between the publisher and the songwriter(s), so owning the publishing rights to popular songs can be a lucrative form of income.

The Beatles assigned their publishing rights to Northern Songs, a company created by Beatles manager Brian Epstein and music publisher d**k James in 1963. The Beatles (particularly John Lennon and Paul McCartney) were soon earning so much money from songwriting royalties, record sales, concert performances, and merchandise licensing that they were losing over 90% of their income in taxes, and they were advised to find a way of receiving their revenue in the form of capital gains rather than income (the former being taxed at a much lower rate), such as selling their song rights or putting their money into a public company. The Beatles opted for the latter route, and Northern Songs went public on the London Stock Exchange in 1965. Initially, Lennon and McCartney each retained 15% of the shares, George Harrison and Ringo Starr held 1.6% between them, Brian Epstein's NEMS company was assigned 7.5%, and d**k James and Charles Silver (Northern Songs' chairman) retained a total of 37.5%.

In 1969, however, the Beatles lost a buyout bid for control of Northern Songs when d**k James and Charles Silver sold their share of the company to Sir Lew Grade, head of Associated Television Corporation (ATV).

In 1984, ATV's 4,000-song music catalog was put up for sale, and Michael Jackson (who had coincidentally been introduced to the benefits of song ownership by Paul McCartney himself) eventually outbid all other prospective buyers for it, including Paul McCartney, who wanted to buy back the rights to the Beatles' songs but was apparently unable or unwilling to raise enough money to pay for the thousands of other songs in the ATV catalog as well.

So, for $47.5 million, Jackson acquired the publishing rights to most of the Beatles songs. (The four songs issued on the Beatles' first two singles -- "Love Me Do" b/w "P.S. I Love You" and "Please Please Me" b/w "Ask Me Why" -- were not part of the package since they were published before the formation of Northern Songs, and the rights to those songs are now controlled by McCartney's MPL Communications.

ATV also did not own the rights to George Harrison songs published after Harrison's songwriting contract with Northern Songs expired in 1968, but they did hold the rights to various other Lennon-McCartney songs not recorded by the Beatles.)

Another key point here is that although Michael Jackson receives 50% of the royalties generated by Beatles songs by virtue of his ownership of the publishing rights, Paul McCartney and John Lennon (and Lennon's estate, now that he's dead) have always received their 50% songwriter's share of the royalties for all Lennon-McCartney songs.

Neither ATV's nor Michael Jackson's acquisition of Northern Songs changed that, and Michael Jackson does not now receive royalties that would otherwise be going to the Beatles had he not acquired the publishing rights to their songs (except that, obviously, if Paul McCartney had managed to outbid Jackson for the publishing rights to the Beatles catalog, he and Lennon's estate would be splitting 100% of the royalties rather than 50%).

As a closing note, we should mention that Sony Corp. paid Michael Jackson $95 million in 1995 to merge ATV with Sony and form Sony/ATV Music Publishing, a 50-50 joint venture, so it's probably more correct to say that Jackson now owns half the rights to the Beatles catalog.

Last updated: 7 May 2001

Source: http://www.snopes.com/music/artists/jackson.htm
 
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March, 1969

d**k James sells his 23% share of Northern Songs to Associated Television (ATV), owned by Sir Lew Grade.

Northern Songs holds publishing rights to nearly every Lennon-McCartney composition.

James makes the sale without notifying The Beatles or giving them first refusal on buying his shares.

At this point, neither ATV nor The Beatles own enough shares to grab majority control of the company.

A fierce competition to buy up available shares begins, and Paul McCartney secretly buys so many shares that he soon has 100,000 shares more than John Lennon. John will view this as underhanded, and it only adds to the strain on the Lennon-McCartney partnership, which is now just about undone.

Still, the competition against ATV continues, causing John to later remark that the experience was like "playing Monopoly with real money".

But the rift between John and Paul prevents them from acting with any real cohesiveness against ATV, and the antagonism and disarray within The Beatles' camp will lead to their loss of control over Northern Songs.

Disgusted, they will liquidate their shares, retaining no control whatsoever over the bulk of their song catalogue.

...

May 5, 1969

Associated Television (ATV) gains control of Northern Songs, giving them control over the Lennon-McCartney song catalog. ATV also acquires Lenmac Enterprises Ltd. The deal is finalised on Sept. 25

...

September 25, 1969

The effective date of the acquisition of Northern Songs by ATV. The negotiated deal had been announced the preceding May 5. John and Paul lose control over their very substantial song catalogue.


Mid-September, 1969

John decides to "divorce" the Beatles, but he does not announce it publicly because of contract negotiations taking place with EMI.

...

August, 1970

Paul writes to John suggesting the breakup of the Beatles legal partnership.


December, 1970

Paul files a law suit against Beatles & Co. to dissolve the partnership and sever ties with Alan Klein. The band officially breaks up.


December 4, 1971

In the latest issue of "Melody Maker", John Lennon's angry letter directed at Paul McCartney, responding to McCartney's critical remarks in a previous issue, makes it clear to one and all that any hopes for a reunion are groundless. Lennon's sarcasm and directness are razor-sharp.

...

Sometime in 1981

Paul McCartney and Yoko Ono join together with a bid to purchase ATV Music, owner of copyrights to the Northern Songs Lennon-McCartney song catalogue. Their offer of 21 million pounds sterling is rejected.


October, 1984

A secret agreement is reached which calls for Northern Songs to pay John Lennon's estate and Paul McCartney about two million pounds sterling, along with an increase in future royalty rates.

...

August 10, 1985

Northern Songs, owner of the Lennon-McCartney song catalogue, is sold to Michael Jackson for $47.5 million. The sale will be finalised on September 6. The only Lennon-McCartney songs not included are "Love Me Do", "P.S. I Love You", "Please Please Me", and "Ask Me Why".

Source: http://www.angelfire.com/stars/LennonMcCartney/page2.html
 
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