ENTERTAINMENT

What you can learn about finances from The Beatles

Oct 28, 2020, 3:00 AM | Updated: Oct 30, 2020, 10:55 am
the beatles finances...
25th November 1963: Liverpudlian beat combo The Beatles, from left to right Paul McCartney, Ringo Starr, John Lennon (1940 - 1980), and George Harrison (1943 - 2001), performing in front of a camera-shaped drum kit on Granada TV's Late Scene Extra television show filmed in Manchester, England on November 25, 1963. (Photo by Hulton Archive/Getty Images)
(Photo by Hulton Archive/Getty Images)

YESTERDAY, OR A LONG TIME AGO — The Beatles had a lot to learn about finances, as detailed in the latest episode of Money Making Sense, a KSL Podcast. 

“I got a call at 2:00 in the morning, John [Lennon] said, ‘Come over,'” Ivor Davis recalled. “I came over with Art Schreiber, who is the correspondent for the Westinghouse Corporation Radio, and we’d play monopoly at 2:00 in the morning.”

Ivor Davis, an author and journalist who travelled with the Beatles when the band first began touring the U.S. in 1964, spent a considerable amount of time with the British quartet during their early days as a band. 

“Then we’d play poker and when John lost — which he always did, because he was a terrible poker player — we said, ‘John, you owe us $5,” Ivor continued. “He never paid.”

That’s just one story Davis remembers during his five-week journey on tour with The Beatles in 1964. 

Not exactly a ‘Magical Mystery Tour’

Davis was the only British Daily newspaper correspondent to cover The Beatles on tour “from start to finish.” During his time, the journalist got exclusive access to the four lads — John Lennon, Ringo Starr, Paul McCartney and George Harrison — while they adjusted to their new lives. 

Throughout his career, Davis has accumulated much attention. However, most questions circulate around what it was like to spend late nights in hotel rooms with the famous boy band. 

In his nearly 60-year reign of talking about his time with the group, Davis said no one ever asked him about the money aspect.

In the podcast “Money Making Sense” with Heather Kelly, Davis revealed some never before known facts.

The Beatles’ finances: ‘All You Need Is Love’

All fame, but no fortune. 

beatles finance (Photo courtesy Ivor Davis)

Despite being one of the most famous bands in the world, The Beatles didn’t make nearly as much money as one may think. That’s because their band management was slow-going, and the boys were a bit naïve starting out, according to Davis.  

Brian Epstein managed the band from 1962 until his death in 1967. Under his management, the Beatles “were not rich,” Davis said. 

“I think Brian Epstein paid them something like 25 pounds a week,” he said. “I know it sounds crazy. That was about $40 [in U.S. currency] a week.”

‘You Never Give Me Your Money’

The boys never really worried about the cash — at least not while Davis was on the road with them. 

“They had two road managers: Mal Evans and Neil Aspinall,” Davis said.  “Whenever the Beatles wanted money they would go to Neil and say ‘Give us a dollar or $10.'” 

That’s because The Beatles didn’t see a need for money. They hardly left their hotel rooms, out of fear of being mobbed, so they never found the need to carry cash.

But they were also naïve about money, Davis said — especially when it came to record deals and merchandising.

Record sales on ‘Penny Lane’

While The Beatles easily dominated music sales in the 1960s, the boys weren’t actually making much of a profit. That’s because their manager — Brian Epstein — was “a terrible businessman,” Davis said. 

“I know that sounds weird, but you can look at it this way,” Davis said. “[Brian] saw promise in them and took them on. And The Beatles were thrilled to bits, but he was no businessman. Brian — believe it or not — signed them and ended up taking something like 25% of their income.”

As a result, the boys were only slated to gain one penny for each record sold. That meant for each record which left the shelf, the band members would split one penny — earning a quarter of a penny each. 

This was eventually renegotiated in 1969 when Allen Klein took control of the band’s management. 

Epstein didn’t completely damage the band, though. In fact, he was largely responsible for the image of The Beatles — creating the boyish charm the world fell in love with. 

“He was the man who tailored them into the lovable people the world became enamored with,” Davis said. 

‘Baby, You’re a Rich Man’ — but not at first

It’s hard to imagine a modern-day rock and roll guru without one (or two… or three) t-shirts in their closets featuring The Beatles’ faces. 

beatles finance (Photo courtesy: Ivor Davis)

It did, however, take the band a long time to get there. 

When The Beatles made their debut in the U.S., merchandisers began approaching Epstein about creating products. Admittedly, Epstein didn’t know anything about it — which potentially cost the band millions of dollars. 

Instead of dealing with merchandising, Epstein hired Nicky Byrne to handle the requests. Byrne established Seltaeb (which is ‘Beatles’ spelled backwards) to begin selling merchandise and other products. 

However, Davis recalls Epstein largely mishandled the initial negotiation. 

Getting financial ‘Help!’

From the deal, Byrne accepted a contract granting him 90% of the commission — leaving only 10% for the Beatles and Epstein combined. 

“Sadly, the light went on,” Davis said. “Brian was absolutely thunderstruck when he realized he had handled badly and given away the family store — [he had] given away The Beatles.”

As a result, some experts estimate Epstein lost out on roughly $100 million in possible income for the band. 

Eventually, Epstein negotiated a more favorable split — earning 49% of the revenue in 1964. 

Merchandising? Maybe ‘When I’m Sixty-Four’

Amid the losses from merchandising, it didn’t matter all that much to the English rock band. In fact, the boys — especially John Lennon — hated the idea of selling merchandise. 

“For some reason, it stank of commercialism,” Davis said. “They didn’t realize the riches were there.”

Davis recalled a moment where Lennon made it clear he wasn’t a fan of the merchandising aspect. One night, Davis visited the band in their hotel room, bringing along his newly-purchased Beatles wig. 

When he showed it to Lennon, the star took the wig from Davis’ hands and tossed it out the window. 

“That gives you some idea of what they thought of merchandising,” Davis said. “Of course, today merchandising is an integral part of the whole package.”

It’s unclear whether Lennon would be on board with the massive role merchandising plays today, according to the journalist. 

“I think he would have changed a bit,” Davis said. “In the month of October, John will have turned 80.  And I think the irascible John that I knew […] It would have been the older man, cheeky John.”


You can hear the full interview with Ivor Davis on the Money Making Sense podcast.

{Ivor Davis is author of ‘The Beatles and Me on Tour,’  The children’s book ‘Ladies & Gentlemen… the Penguins,’ and ‘Manson Exposed: A Reporter’s 50-Year Journey into Madness and Murder.’  Davis’ reporting on the Charles Manson group is what the prosecutor used in his opening statement to convict them at trial.}

 

 

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What you can learn about finances from The Beatles