A 1965 contract for the Rolling Stones involving a $1.25 million advance from Decca Records demonstrated the complex financial maneuvers that defined the career of Allen Klein. By positioning his own company as a vital intermediary, Klein fundamentally altered compensation standards for recording artists while securing unprecedented control over the intellectual property of his clients.
Early Career and Accounting Background
Born in Newark in 1931, Klein experienced a difficult childhood, spending time in a Jewish orphanage after his mother's death. Following his service as a clerk typist in the U.S. Army, he attended Upsala College on the G.I. Bill, majoring in accounting. While working for a Manhattan firm, he gained exposure to the music industry by auditing companies such as Dot Records and Liberty Records. Despite being fired for chronic lateness and failing to become a Certified Public Accountant, he established his own firm, Allen Klein and Company, eventually securing a reputation as an aggressive negotiator capable of forcing record labels to honor royalty obligations.
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Klein challenged the traditional role of a business manager by implementing buy-sell agreements. Under this structure, his own entities would serve as intermediaries between musicians and record labels. These companies owned the master recordings, financed production, and managed distribution, subsequently paying royalties and advances to the performers. While this process often increased the immediate income of artists like Buddy Knox and Jimmy Bowen, it simultaneously enabled Klein to centralize significant financial control. The fine print in these contracts often allowed him to retain substantial assets, including publishing rights, for decades.
Management of Music Industry Figures
His influence expanded through his partnership with disc jockey Jocko Henderson, which introduced him to Sam Cooke. By forcing RCA Records to open their books, Klein successfully renegotiated Cooke's contract, though he later manipulated the resulting corporate structure to his own advantage. Following Cooke's death, Klein gained ownership of his recordings. He also served as manager for the Rolling Stones and the Beatles. His tenure with these groups was marked by intense friction, including allegations of withheld royalties and unpaid taxes, which eventually triggered extensive litigation. These conflicts were compounded by the IRS, which pursued Klein for years, leading to his 1980 imprisonment for a false statement on a 1972 tax return.
Fast facts
- Born: 1931, Newark, New Jersey
- Died: 2009, New York City
- Education: Weequahic High School, Upsala College
- Key Client Acquisitions: Sam Cooke, Rolling Stones, The Beatles
- Military Service: U.S. Army clerk typist
- Jail Time: Two months in 1980
- Spouse: Betty Rosenblum
- Company Founded: ABKCO Music & Records Incorporated
Questions readers ask
What were buy-sell agreements?
These were contractual arrangements where a company owned by Klein acted as an intermediary, purchasing music from an artist to sell to labels, thereby retaining control over masters and royalties.
Why was Klein jailed in 1980?
He was convicted of a misdemeanor charge related to making a false statement on his 1972 tax return following an extensive investigation by the IRS.
Achievements
- Educated at Upsala College and Weequahic High School