Why Boardrooms are not all Rock ‘n’ Roll

My Financial Times column 11/1/10

In his autobiography, Life, Keith Richards describes three phases in the management of the Rolling Stones. The first was when the band was struggling to escape the scrum of other boy bands that sprang up in the wake of The Beatles in the early 1960s. For this, they hired Andrew Oldham, an oddity of the London music scene, who lived with his mother and was driven around town in a Chevrolet Impala by a thuggish East Ender called Ray. Ray was not above extreme physical violence towards those who crossed Oldham or his clients.

Oldham had worked for The Beatles but had been fired after a disagreement with their manager, Brian Epstein. The Stones were his revenge. At first, he tried to make them Beatles copycats, dressing them in matching jackets and giving them similar floppy haircuts. But when the Stones chafed, Oldham, in Richards’ words, “suddenly saw the beauty of opposites”. He realised his opportunity lay in making them the anti-Beatles. While The Beatles were clean cut, respectable and cute, the Stones were dirty, snarling and mean. They were the boys that parents didn’t want their daughters bringing home.

Oldham also told the Stones that if they kept on just performing covers of American songs, their popularity would be limited. So one weekend, he locked Mick Jagger and Richards up in a kitchen in Willesden and said: “Come out with a song.” After a sleepless night, they emerged with “As Tears Go By”, which became a hit for Marianne Faithfull. Jagger and Richards had discovered that they were capable of writing their own songs and, more importantly, that they enjoyed it.

To reach the next level, however, the Stones hired Allen Klein, a wily lawyer who took their fight to the record companies. In 1965, Klein renegotiated the Stones’ contract with Decca Records. He advised the band to come to the meeting wearing sunglasses and stand at the back of the room saying nothing. He would do the talking. The result was a deal bigger than The Beatles’.

Richards writes that Klein was “patrician in his dealings with us and with money. You could always get some from him. If you wanted a gold-plated Cadillac, he’d give it to you. When I rang and asked him for £80,000 to buy a house on Chelsea Embankment near to Mick’s, so that we could wander back and forth and write songs, it came the next day.”

The Stones discovered the real cost of this years later when they found that, for all their success, they were broke and Klein owned the rights to most of their music. Salvation came from the most unlikely quarter: Prince Rupert Lowenstein, a European aristocrat and private banker. Unlike Oldham and Klein, Lowenstein had no roots in the music business. He was also a devout Roman Catholic, with no interest in sharing the Stones’ arch-bohemian life. But he rescued the Stones from financial ruin.



Lowenstein’s first suggestion was that in 1971, the Stones leave the UK and its punitive tax rates and take up residence in France. When the band was busted for drugs at Richards’ rented mansion on Cap Ferrat, Lowenstein did not waste time with music industry lawyers. He hired Jean Michard-Pelissier, the best friend and adviser to Jacques Chaban-Delmas, then French prime minister and a personal friend of the prefect of the Antibes region. As Richards puts it: “Nice one, Rupert.” 

Lowenstein professionalised the management of the band. He established separate companies in the Netherlands to manage its various businesses, such as publishing, merchandising, touring and so on. He arranged for a global network of lawyers to manage the personal and business affairs of the band’s members. He was the antithesis of the rock ’n’ roll manager but, under his stewardship, the band became one of the richest in history.

Managing creative people is difficult, not just because creativity is rare and the people who possess it chafe at being managed but because establishing a market for creative work is one of the hardest things to do in business. Venture capitalists know this when they install seasoned executives to guide young founders; Eric Schmidt at Google, for example, and Sheryl Sandberg at Facebook. Similarly, Hollywood will often pair a hard-headed business type with a creative genius. Steven Spielberg’s career took off under the guidance of Sid Sheinberg, a fierce lawyer who ran MCA/Universal. And book publishing’s best-known agent, Andrew Wylie, is nicknamed “the Jackal” for his aggression and tenacity on behalf of clients.

The Stones required three very different kinds of manager: the first to validate them within a highly competitive industry, and then to establish them in the public eye; the second to usher them into the big time; and the third to build a protective fort around their steady-state operations and ensure their long-term survival and profitability. It is a lesson with resonance far beyond music


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