The Beatles’ 1969 EMI Contract: The Agreement That Altered Their Music Business Future

The Beatles’ EMI contract of September 20, 1969, was one of the biggest business deals of the latter part of their career. The new deal was negotiated with EMI and Capitol Records by Allen Klein, the Beatles’ business manager, and was signed at Apple offices at 3 Savile Row, London. It greatly improved the group’s royalty position while giving Apple more control over the manufacture and distribution of Beatles recordings in North America.

Why Did The Beatles Re-Negotiate Their EMI Contract?

EMI realized the Beatles were worth a colossal amount. Their recent albums, Sgt. Pepper’s Lonely Hearts Club Band, The Beatles (White Album), Yellow Submarine, and the forthcoming Abbey Road, had sold in huge quantities. Klein said the Beatles deserved a far better royalty deal. The new deal would increase royalties in the US in exchange for a guaranteed volume of new merchandise, as previously reported.

The Beatles’ new royalty rate

Under the old setup, the Beatles received about 17.5% of the U.S. wholesale price. Klein got a raise of about 25 percent, a big improvement that reflected the Beatles’ unprecedented commercial strength. It is also reported that album royalty payments rose to 58 cents per album by 1972, with a further increase to 72 cents depending on sales conditions.

Apple Tightens Control

Another major part of the Beatles’ 1969 EMI contract was Apple Corps. Capitol remained the distributor of the deal, but Apple got the rights to do what it wanted with the making and selling of Beatles records in North America. This was a major step toward greater control over the commercial handling of Beatles recordings.

The Timing Is Awesome

The timing was perfect. John Lennon told Paul McCartney and Ringo Starr he was going to leave the Beatles on September 20, 1969, just as the contract was signed. George Harrison was visiting his mother and filled out the forms a few days later.

So the Beatles’ 1969 EMI contract wasn’t just a financial arrangement: it was signed at the beginning of the end of the Beatles as a working group.