Allen Klein

Allen Klein (December 18, 1931 – July 4, 2009) was an American businessman whose aggressive negotiation tactics affected industry standards for compensating recording artists. He founded ABKCO Music & Records Incorporated. Klein increased profits for his musician clients by negotiating new record company contracts. He first scored monetary and contractual gains for Buddy Knox and Jimmy Bowen, one-hit rockabillies of the late 1950s, then parlayed his early successes into a position managing Sam Cooke, and eventually managed the Beatles and the Rolling Stones simultaneously, along with many other artists, becoming one of the most powerful individuals in the music industry during his era.

Rather than offering financial advice and maximizing his clients' income as a business manager normally would, Klein set up what he called "buy/sell agreements" where a company that Klein owned became an intermediary between his client and the record label, owning the rights to the music, manufacturing the records, selling them to the record label, and paying royalties and cash advances to the client. Although Klein greatly increased his clients' incomes, he also enriched himself, sometimes without his clients' knowledge. The Rolling Stones' $1.25 million advance from the Decca Records label in 1965, for example, was deposited into a company that Klein had established, and the fine print of the contract did not require Klein to release it for 20 years. Klein's involvement with both the Beatles and the Rolling Stones would lead to years of litigation and, specifically for the Rolling Stones, accusations from the group that Klein had withheld royalty payments, stolen the publishing rights to their songs, and neglected to pay their taxes for five years, thus necessitating their French "exile" in 1971.

After years of pursuit by the IRS, Klein was convicted of the misdemeanor charge of making a false statement on his 1972 tax return, for which, in 1980, he was jailed for two months.

Klein was born in Newark, New Jersey, the fourth child and only son of Jewish immigrants. His mother died of cancer soon afterward, and Klein lived for a time with his grandparents, then in a Jewish orphanage, until his father remarried shortly before Klein's 10th birthday. An indifferent student, he graduated from Weequahic High School in 1950; fellow graduate Philip Roth was the only classmate to sign his yearbook.

In early work experience with a magazine and newspaper distribution company, Klein showed skill with numbers, and learned about how profits were often concealed from those who had been crucial in generating them. Eventually he realized that much the same situation existed in popular music, where labels routinely took much profit from the transitory careers of the artists who created the profit-generating music, paying them less than Klein thought they should.

Klein enlisted in the U.S. Army in 1951, and served as a clerk typist on Governors Island, New York. After military service, and with the assistance of the G.I. Bill, Klein majored in accounting at Upsala College, graduating in 1957, and was hired by a Manhattan accounting firm, Joseph Fenton and Company. He was assigned to assist Joe Fenton in an audit of a music publishers' organization, the Harry Fox Agency, and several record companies, including Dot Records, Liberty Records, and Monarch Records. In an early setback to Klein's career, Joseph Fenton and Company fired him after four months because of chronic lateness. The company wrote to the State of New Jersey urging officials not to approve him as a Certified Public Accountant, and Klein chose not to take the examination. He briefly attended law school but soon dropped out.

Aided by his friendship with music publisher Don Kirshner, a fellow Upsala College alumnus, Klein worked as an accountant for the next several years, assisted by Henry Newfeld, a CPA who was a friend from school and the Army, and Marty Weinberg, another CPA, under the name Allen Klein and Company. Klein's clients included Ersel Hickey, Dimitri Tiomkin, Steve Lawrence, Eydie Gormé, Sam Cooke, Buddy Knox, Jimmy Bowen, Lloyd Price, Neil Sedaka, Bobby Darin, Bobby Vinton, Scepter Records, and the estate of Mike Todd. A key early contact was attorney Marty Machat, who frequently did legal work for Klein.

In June 1958, Klein married Betty Rosenblum, a Hunter College student seven years his junior. The couple had three children.