Reports this week are that a conman calling himself Harry O'Connor has shut down his 6 week old Sydney-based touring and booking agency amidst fraud allegations. The musicians who were signed to the label are said to be not out of pocket, however a number of large debts for studio time were about to be assigned to the artists in question, potentially costing them thousands of dollars.
This has become big news in Australia. I'm not sure why, but there haven't been too many of these sorts of stories in the music media lately. The allegations of fraud by this guy are well documented on other music industry websites. The thing is, this isn't the first industry scam, not the will it be the last.
This got me thinking of some of the most famous music industry scams. Band managers and other industry types have a reputation as rip-off merchants. And while that is not true of everyone in the industry, it's not an undeserving reputation.
It has been said that Colonel Tom Parker (not his real name) was siphoning off 50% of Elvis's royalties during the latter half of his career. It may be true that Tom helped Elvis's career and kept him a profitable star, but 50%? seriously?
The Beatles struck gold with Brian Epstein as a manager. Brian looked after the band like his own family, until his own suspicious death in 1967. This left the Beatles quite rudderless. When they wanted to form Apple Corps, the band ran it themselves, and found that money was walking out of the venture at a rate of knots. Mick Jagger recommended his manager Allen Klein to sort things out. McCartney hated the idea and didn't sign the contract, while the other three did.
Klein started off well, negotiating the highest royalty rate in the industry at the time. However it was soon apparent that he screwed both the Stones and the Beatles out of heaps of money, making a mess of the business affairs of both bands. Post Beatles, Klein helped George organise the Concert for Bangladesh. Klein was found guilty in 1979 of having defrauded both the accounts of the Concert for Bangladesh and UNICEF.
The rumour going around, at least according to Eric Burdon, with whom he shared a manager, that Jimi Hendrix was killed off by hired goons set upon him by his then manager Mike Jeffries. And what was his crime? Jimi wanted to find a new manager because he thought he was being ripped off...
Recently, R&B singer Beyonce has dropped her manager, on the grounds he was ripping her off to the tune of millions of dollars. The plot thickens when you realise her manager was actually her dad...
Billy Joel, Chicago, Bob Dylan, Soundgarden, Aerosmith, Leonard Cohen, Bo Diddley and heaps of others have been dudded by their managers as well.
However, probably the worst of them all was Welsh band Badfinger, who got screwed over twice. Firstly, on a number of occasions by Allen Klein as a part of the aforementioned Apple Corps, and then by manager Stan Polley. Stan ensured all money they made was funneled into holding accounts of his own and then doles out proceeds to himself. Between late 1970 and the end of 1971, a financial statement claimed that each band member was paid between $6,000 and $9,000, while the business got a profit of $24,000 and Stan's management commission was $74,000. Go figure.
When the band left Apple to sign with Warner Brothers, there were more money issues between the three parties and lawsuits flew around like confetti. The lack of fair dealing, legal confusion and income held in escrow lead the two main songwriters to commit suicide within 8 years of each other, citing Stan Polley and money problems as a main source of despair.
In the 1960s, in the wake of the Beatlemania explosion, managers and record labels sprung up out of nowhere hoping to cash in and sign what they thought might be the next big thing. Unscrupulous minds took on naive young artists and ripped them off blind. Van Morrison claims his first band Them was never paid. Joan Jett and the band she was in as a teenager The Runaways couldn't get money out of their manager Kim Fowley. Vocal group The Coasters were paid next to nothing through their label and management deals in the late 1950s and early 1960s.
Largely, I think, because they could. There was a lot of money to go around and those with the know how cleaned up through dodgy deals and trick accounting practices. It was usually the bands, every trusting of these people, who lost out. The manager, with the intimate access to the finances, were usually able to fleece the naive. It's truly sad, but that's how it has been for years.
It is encouraging somewhat to hear from students in Music Industry courses today that lecturers implore future managers to "do the right thing" and look after their artists. They want to get rid of the concept of being rip-off merchants and, quite rightly, the only way that perception will change is when the actual business practices of managers start changing for the better.
Here's hoping things change soon then.....