(Legal) Career Killers: Badfinger and Bad Management.

by Unfrozen Caveman Law Writer

If you read about some of the best managers in the history of pop-rock music, they often have several of these characteristics:

  • Vast knowledge of the music industry.
  • Legal and business acumen.
  • Patience.
  • A fighting spirit and willingness to lay it all on the line in service to their artists.
  • And above all, unshakable loyalty.

Hiring the right manager is vital because most artists and bands lack the kind of sophistication, education and tactical nous to take on powerful record labels and extract every dollar or right they’re entitled to.

Great managers, like Peter Grant, Robert Stigwood, Irving Azoff, Brian Epstein, Andrew Loog Oldham and Paul McGuinnis are or were powerful advocates for their clients— protecting and defending their rights in an industry that often looks at them as nothing more than commodities.

Greedy or unethical managers that violate their fiduciary duties can hurt and damage their clients worse than the most predatory and ruthless record label ever could. Just look at what Lou Pearlman did to the Backstreet Boys, NSYNC, LFO and a bunch of other bubblegum pop acts.

Or what Badfinger’s managers did to them.

There have been a number of bands earmarked as “the next Beatles.” But few have had earned that label more than Badfinger.

In 1968, the Welsh band signed with the Beatles’ label, Apple Records, with each member of the Fab Four personally signing off on the move.

Then-known as the Iveys, upon signing with Apple, the band changed their name to “Badfinger” — either in reference to “Bad Finger Boogie,” an early working title of the Beatles’ classic “With a Little Help from My Friends,” or Helga Fabdinger, a stripper the band had met during their early days in Hamburg.

Either way, Badfinger got by with a little help from their famous and powerful friends. Paul McCartney gave them one of his Abbey Road outtakes, “Come and Get It,” and produced the song for them.

I said to Badfinger, “Look, lads, don’t vary, this is good, just copy this down to the letter. It’s perhaps a little bit undignified for you, a little bit lacking in integrity to have to copy someone’s work that rigidly, but this is the hit sound. Do it like this and we’re all right, we’ve got a hit.”

Paul McCartney, as quoted in Without You: The Tragic Story of Badfinger by Dan Matovina (2000)

Wisely, the members of Badfinger chose not to look a gift horse in the mouth and, instead, followed the advice of one of the greatest hitmakers of his or any other generation. And it paid off. When it was released in late 1969, “Come and Get It,” became Badfinger’s first hit, reaching #4 in the U.K. and #7 in the U.S.

Meanwhile, George Harrison co-produced their fourth studio album, Straight Up (1971), and had them perform at his landmark 1971 Concert for Bangladesh (albeit as part of the all-star backing band that accompanied performers like Harrison, Starr, Billy Preston, Bob Dylan and Ravi Shankar). Members of Badfinger also contributed to several important recordings by ex-Beatles, including Harrison’s All Things Must Pass, Ringo Starr’s single “It Don’t Come Easy” and John Lennon’s Imagine.

The band had some personnel changes before and during its time on Apple, but the best known lineup consisted of Pete Ham (guitar), Mike Gibbins (drums), Tom Evans (bass), and Joey Molland (guitar). All of them could sing, which gave them a rich harmonic sound, but Ham and Evans handled most of the lead vocals.

Whether it was due to their association with the Beatles or their own songwriting and unique sound (or a combination of both), Badfinger had lots of success right out of the gate. “No Matter What,” their follow-up to “Come and Get It,” reached #5 on the U.K. charts and #8 in the U.S. Their next single, “Day After Day,” reached #10 and #4 on the U.K. and U.S. charts, respectively. Meanwhile, their 1970 album, No Dice, hit #28 on the Billboard 200, with several critics explicitly comparing it to the Beatles.

It’s as if John, Paul, George, and Ringo had been reincarnated as Joey, Pete, Tom, and Mike of Badfinger. And, in general, this album sounds like nothing so much as what might have happened had the post-Pepper Beatles gotten it together after their promising double The Beatles. Badfinger is becoming that good, and they may well get better. Don’t miss them.

Mike Saunders, Rolling Stone, December 2, 1970.

No Dice contained what eventually became the band’s best-known song, the Ham/Evans-penned “Without You.” The band didn’t think much of it and simply tacked it onto the end of Side A. However, singer-songwriter Harry Nilsson, who was best known for singing the hit song “Everybody’s Talkin’” from the Oscar-winning movie Midnight Cowboy and “Best Friend,” the theme song for the TV show The Courtship of Eddie’s Father, heard it and loved it, thinking it was a Beatles song. Nilsson’s 1971 cover of “Without You” became a huge hit, going to #1 on the Billboard 100. Since then, others have covered it, including Air Supply, Heart, and Mariah Carey, whose version reached #3 in the U.S.

So where did it go wrong?

In a word (or two): bad management

Their original manager, Bill Collins, had a clause in his contract that he would be treated as an equal member of the band, giving him a share of all of Badfinger’s profits and proceeds. Collins also had discretion to deduct his managerial expenses from the net proceeds before distributing them out to the group.

The “fifth member” clause wasn’t necessarily a conflict of interest. The way Collins saw it was that he took a chance on the band when no one knew who they were and he put just as much time and energy into molding the group into stars as the other four. He was the one who told them they needed to learn how to write songs, for instance, and helped them until they became accomplished writers on their own.

But those kinds of clauses can be fertile ground for abuse and fraud, as the Backstreet Boys and NSYNC found out with Lou Pearlman. Who determines what counts as a reimbursable expense? Who audits the books to make sure everything’s on the up-and-up? And when does the fifth ranger leave the team and no longer get an equal share? If there’s no clear language in the contract, then there could be disputes over money that last indefinitely, as Badfinger found out.

But the band didn’t seem too concerned about any of this. They were the next Beatles, after all. There would be plenty of money to go around, right?

Well, any chance of that happening ended when they brought in Stan Polley. The New York-born lawyer and manager represented singer-songwriter Lou Christie and musician Al Kooper of Blood, Sweat & Tears, among others. Badfinger and its management team wanted an American to help them break into that market and were charmed by the aggressive, big-talking Polley. “[Apple head Allen] Klein used to be my accountant,” he allegedly said to Collins.

According to Without You: The Tragic Story of Badfinger, Polley helped seal the deal by offering to manage their American tour without taking money up front. “According to [Collins], Polley told him, ‘Let me prove to you I can do this first. Then we can talk business down the road,’” Matovina wrote.

But don’t feel too bad for Polley. As Matovina points out, whereas most managers took 5-10% of gross revenues, Polley’s contract called for him to get 30%. Polley’s argument was that he would reinvest the money into the band, but other clients claimed Polley had promised to reinvest Badfinger’s money with them so that everyone would benefit. Additionally, Collins claimed Polley, at one point, said he would take 30% of the net earnings, even though the contract clearly said gross.

Either way, Collins didn’t have an outside lawyer review the contract and the band went ahead and signed with Polley in late 1970. Well, most of them, at least. Evans got a bad vibe from Polley and refused to sign, at first. Eventually, he caved and against his better judgment, put his signature to paper.

Evans was right to be suspicious. The very next year, Polley was implicated in a plot to allegedly bribe a New York criminal judge overseeing a case involving one of his clients. The judge, Mitchell Schweitzer, was never charged, but retired in 1972 before an internal disciplinary probe could be completed.

Then, as is often the case, the band members got suspicious because they were selling records but their paychecks and bank accounts didn’t seem to reflect that. According to a financial statement from December 1970 to October 1971, the four members of the band received a combined $27,370 in salaries and advances while Polley took in $75,744.

By the middle of 1972, one of Polley’s other clients learned about some of his business practices. Lou Christie raised concerns about his finances and found out that Polley had control of it all. “Stan had this incredible way of saying, ‘Listen, I have all of your money, I have control of it. You don’t have any paper. You don’t have anything to get me.’ And then he would laugh… like it was funny,” Christie said as recounted in Without You.

Caught in an endless loop of touring and recording Badfinger was seemingly unaware of what was going on. Also, they were in the process of leaving Apple for Warner Bros. — a move engineered by Polley. The contract obligated the band to deliver two albums a year for three years— a ridiculous stipulation that was sure to burn them out. But they were swayed by the money being offered — up to $3 million in total with an advance of $225,000 per album.

“We were hippies. We wanted to be musicians,” Joey Molland said. “But when your business manager says you’re being offered three million dollars, do you take the deal? Three million dollars!? You bet your ass!”

The relationship with Warner got off to a rocky start as their first two singles, “Love Is Easy” and “I Miss You” failed to chart. Things got even worse when Polley suddenly became incommunicado about an escrow account he was supposed to set up to safeguard the advance money. Warner got suspicious, terminated the band’s publishing deal and sued Polley and the band.

The label also refused to promote Badfinger or release any more of their music, which meant the band, essentially, went on ice. Warner barely promoted the band’s 1974 album, Wish You Were Here, and refused to release their planned 1975 record, Head First. That album, which was eventually released in 2000, contained a song called “Mr. Manager,” which is indicative of where their minds were at the time:

Hey Mr. Manager,

You’re messing up my life.

Hey Mr. Manager,

Don’t think I need that kind of strife.

You’ve got no feeling,

You’ve been dealing,

All the wrongs.

You’re lies are stealing,

Lord, I think,

You should be gone.

Badfinger, “Hey, Mr. Manager.”

There was also a song called “Rock ‘n Roll Contract,” which is definitely not about the virtues of contract law. “Wrapped up in a rock’n’roll contract/Lots of things I had to sign at the time/ Man told me not to worry ‘bout the business/Just keep on poppin’ those hits.”

The financial and legal turmoil took its toll on the band. In 1974, Ham quit but was talked back into the band after three weeks. Molland then left at the end of the year for a solo career.

The following year, things took a tragic turn. Ham’s paychecks started bouncing and he was informed that all of his money was gone. The guitarist, who had just bought a new house and was expecting a child, tried frantically to reach Polley but was unsuccessful. Ham, who had reportedly been showing signs of mental illness, met with Evans one last time and then drove home and died by suicide. He left a note blaming Polley for everything, writing: “Stan Polley is a soulless bastard. I will take him with me.”

After his death, the band broke up and they were released from their Warner Bros. contract.

But like most bands, they soon found themselves back together. In 1979, Evans and Molland reunited as Badfinger and released an album, Airwaves. They released another album two years later but then Evans and Molland went their separate ways and started rival versions of Badfinger a la Yes, Queensrÿche, or En Vogue.

They also got into a nasty fight over (what else?) money. Since “Without You” was now a big-time revenue generator, a royalty dispute erupted between Evans and Molland, with Collins and others also claiming a share of the now-lucrative publishing rights. After a telephone argument with Molland in 1983, Evans hanged himself, following Ham to an early grave.

“It makes me so sad how it all evolved,” Evans’ widow, Marianne, said. “Tommy and Pete, such close friends. Pete half a mile away… two close friends. And then Pete died and Tommy didn’t have anybody he could talk to, write songs, his other half was gone. He felt lost and lonely. Many times he said, ‘I want to be where he is.’ Many times…”

Meanwhile, the various legal battles continued long after both Evans and Ham passed on. The surviving band members, Collins and the estates of Ham and Evans fought over royalties for “Without You” for years, while some Badfinger re-releases, compilations, live albums and stuff from the archives led to more lawsuits over money.

Litigation over royalties continued into the 2000s before the band members/estates and Collins came to a deal. According to Bloomberg, the main songwriter(s) gets 32% of publishing royalties and 25% of ASCAP royalties and the other members and Collins split the rest. As for albums, the money is split five ways— again, Collins gets an equal share. That “fifth ranger” clause is tough to break.

The band has experienced a bit of a resurgence in recent years. Their 1972 single, “Baby Blue,” was memorably used in the closing scene of Breaking Bad’s 2013 series finale, leading to a spike in Spotify streams and iTunes downloads. Meanwhile, Molland, the last surviving member of the classic lineup, continues to tour with his version of the band. Another former member, Bob Jackson, who joined when Ham briefly left in 1974, formed his own version of Badfinger and also tours.

It doesn’t seem as if these two offshoots have sued each other in court for the exclusive rights to the band’s name and history yet. I guess it’s not a surprise. After everything they’ve been through, I’m sure the last person they want to see at this point is another lawyer or judge.

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