Greece, Colonel Tom Parker, Allen Klein and Other Bad Money Managers
Odds are, if you're reading Music Times right now, you aren't all that interested in the current financial crisis of Greece, or the fact that the nation failed to pay the 1.5 billion euros it owed the International Monetary Fund as its bailout expired. It's a big—and very complicated—deal, but we're not going to take up your time explaining the sticky situation it puts both the Mediterranean nation and the European Union in. Instead, we figured we'd show you some of the worst money management issues in music...or more specifically, the managers that ran their clients through the cleaners worst.
Odds are, if you were into pop music during the '90s, you were on either Team NSYNC or Team Backstreet Boys. And that's exactly what Lou Pearlman wanted. The manager actually founded both groups, so regardless which of the biggest bands in the world you supported, he got the kickbacks. That part was a brilliant business plan. The rest was fairly criminal. Although Pearlman was lining his pockets with percentages from the tours and album sales for his clients, the clients themselves rarely saw much out of it. Justin Timberlake notoriously described Pearlman's money-handling as "being monetarily raped by a Svengali." They didn't get the worst of it however. After the boy band movement died out, he kept his lifestyle going with sketchy investment schemes, which ended up losing his clients $300 million. Or that's the total the FBI cited when it booked him for his actions during 2007.
Colonel Tom Parker
Much like Pearlman, you've got to give credit to Colonel Tom Parker for knowing a good thing when he sees it. Elvis Presley was far from being the biggest musician in world history when Parker started with him. Unfortunately, making it big only makes sharks such as Parker want to make it bigger. He fed on Presley's trusting nature and was making nearly a 50 percent cut of The King's earnings by the time Parker's cash cow died during 1977. The thing was...Presley could have made so much more, even as one of the highest-earning celebrities of his era. A mind-blowing fact: Presley never once played a show outside of the United States during his 20-plus year career. Ask any music executive...playing shows in foreign markets is the most profitable market for arena-sized acts (Katy Perry made 60 percent of her $135 million there last year). The reason? Parker didn't schedule any foreign shows. But why? Surely he saw the possibility for profit. Everyone knows that the "Colonel" in Parker's title is bogus...but few realized he was an illegal immigrant. He avoided taking Presley out of the United States for fear that customs would call his game and ban him from the country.
We'll give Parker and Pearlman begrudging credit for at least partially creating the products that they would later steal from. Allen Klein took an easier route to riches, by climbing the corporate ladder and grabbing the biggest acts he could. He started with smaller acts and then landed a gig with the Rolling Stones, who would later drop him (although he continued to profit from publishing percentages he owned). Mick Jagger warned John Lennon to avoid him...advice that was promptly ignored. The rest of The Beatles jumped onboard, except for Paul McCartney, who knows a thing or two about making a profit. Eventually nearly every member of the Beatles had brought a lawsuit against Klein. The worst black mark on his resumé? The IRS investigated Klein for skimming money from George Harrison's famous "Concert for Bangladesh," a charity gig for the nation that had recently been wrecked by genocide. Many are also familiar with The Verve losing huge amounts of royalties from its hit "Bittersweet Symphony" because it featured a sample of "The Last Time" by the Stones. It wasn't the band that brought legal action...it was Klein, who still owned the rights.
Tony Defries made it big by jumping on the David Bowie bandwagon before the rest of the world. He was famous/notorious for his extravagant promotions of the performer...which of course didn't come out of HIS paycheck. Bowie stuck with Defries and reportedly borrowed money from his manager to buy necessities, such as, you know, food (that's usually a bad sign in a manager-client relationship). Defries' lifestyle was...absurd. He owned eight different apartments in Manhattan (we live in Manhattan...it's expensive) and personal bodyguards (who wore karate costumes). Eventually Bowie wised up and ditched Defries...but still had to pay the ex-manager for earnings for another seven years.
Parents have proven to be excellent managers and promoters for superstar musical talent...and awful parents at the same time. Joe Jackson and Murry Wilson both produced a multitude of talented children...who ultimately came to despise their parents. Jackson and Wilson may have been guilty of relationships both mentally and physically abusive, but neither has ever been accused of financially bilking their offspring. Matthew Knowles, father of Beyoncé and Solange Knowles, was caught taking from his eldest daughters coffers during 2011, leading to an uncomfortable business divorce. Family relations were only made worse by the literal divorce from his wife around that time, brought on by his fathering a child with another woman.
BONUS BAD MANAGEMENT! DON ARDEN
Don Arden has never been accused of bad behavior such as the aforementioned managers. In fact, his style as a manager may have even brought more money to his clients. Of course...those methods also earned him the nickname, "the Al Capone of Pop." One story is that he had goons hang fellow notorious manager Robert Stigwood out a four-story window for allegedly trying to "steal" one of his bands. His most terrifying action surrounds his client Black Sabbath however. The band fired Ozzy Osbourne during 1979 and Arden caught wind that another figure had taken him on as a client. Enraged, he confronted the agent, a pregnant woman, and sent his dobermans upon her. The woman lost her child as a result of the attack. Her name? Sharon Osbourne. She and the vocalist hadn't married yet however...so she was still going by her maiden name. Sharon Arden. He sent attack dogs on his pregnant daughter.