|| Friday, 23rd November 2007
Street Life: left…
Morning listening: Schumann string quartets.
A paper-morning focussing on the formation of the Guitar Craft Institute of Research & Practice…
Book keeper Nicky is visiting today…
… now also Company Secretary of the GCIRP.
Hugh the Fierce is in the DGM Art Department…
… looking as fierce as ever.
Where is Mr. Stormy?...
SoundWorld II is absent a plumber and drummer.
Under Desk of the Stormy…
… a Monday-selection is likely underway, but we’ll have to wait until Mr. Stormy returns to discover exactly what.
13.32 On the Guestbook…
Ethics or Essex?:: Posted by bucket on November 22, 2007
It is well-known that a verbal contract is not worth the paper it is written on, but a written contract? Now that’s different.
An extended commentary on this, with particular reference to EG, would highlight significant shifts in English social & professional life between the 1960s & the 1990s. In my youth & early adulthood the word of a gentleman, honoured by a handshake, was considered a binding contract, and sufficient in itself; to have asked for a written contract in addition to this, insulting. In the City & professions, many / most of the main players had public school backgrounds, and the old school network policed / guaranteed compliance: breaking a word = social exclusion. Let us note: this was a very different England. Today, there are many players from outside the network of Establishment institutions, and social-policing less an effective controlling-force. The transition from that England to the present involved a little sliding & slipperiness.
In 1969 the partners in EG – Enthoven & Gaydon – were Old Harrovians. A verbal agreement would (eventually) be honoured in writing, but the foundation agreement was that between gentlemen (even if they were a little rough, first generation away from the working class, had a grammar school education & came from Dorset). Even today in Wimborne, there are acquaintances of my youth who distinguish between a proper chap and one who is not a proper chap. Wimborne is a small community, particularly of those who have known each other for most of their lives; and dealings in that community extended-over-time are known, recognised & remembered.
When Mr. Alder joined EG at the end of 1970, with public school background at King William’s, Isle of Man (of which he is currently the Chairmen of Governors), and chartered accountant – a member of a profession! – Mr. Alder’s word-as-bond was taken as given. As would have been said of Mr. Alder at that time – he’s as good as his word. In 1991 I might also have said – it’s true: Mr. Alder is as good as his word. And in between was 21 years of changing England & moving goalposts.
The two key aspects of Endless Grief were:
Mr. Alder acknowledged, to David Singleton at a London music industry seminar in the later 1990s, that yes, there were problems with paying royalties; but that the copyright issue was straightforward: we owned them & we sold them. So, regarding my copyright assignments to EG of February 22nd.1976: were these formal & binding contracts?
David Enthoven & Mr. Alder visited me on February 22nd. 1976 at Sherborne House, where I was attending the Fifth Basic Course. They presented me with documents to sign, including copyright assignments, “necessary to enable EG” to:
1. protect my interests;
2. collect my royalties;
3. protect the copyrights around the world.
At this meeting I was told that nothing has changed! Mr. Alder assured me that these assignments were necessary technicalities, but subordinate to the original partnership agreement (enshrined in the Willowfay Agreement of 1970) which continued to have overriding authority; i.e. effectively, I continued to own my share of the copyright.
This point would not become contentious until the EG copyright “owners” sold the copyrights and / or the income stream attached to them; a 2-year process culminating in April 1991 (to Virgin) & EG Music to BMG Publishing on July 1st. 1991. In a submission of 1993, as part of my High Court action, David Enthoven accepted that the information given to me at Sherborne House was misleading; and, in fact, it was not necessary for me to assign copyrights to EG: a license would have been sufficient. (Neither had I been I recommended to seek outside, third-party legal advice). Further, the formal (written) copyright assignations were subject to the oral collateral warranty attached to them – nothing has changed! - which became the basis for future dealings between myself & EG.
When Peter Sinfield was approached (1975) to assign his copyright interests, Peter asked Mr. Alder:
PJS: What happens if you sell the copyrights?
SGA: You’ll get your share.
At the time, 1975/76, in the understanding of the time, had Mr. Alder been asked to sign a document to that effect, it would have been considered profoundly rude, tantamount to calling Mr. Alder a liar. In retrospect, a document should have been signed. Sixteen years later, when the copyrights had been sold, in response to correspondence from Peter’s representatives, Mr. Alder did not recall his answer. There is much more detail to this, in boxes of files presently stored at World HQ in Bredonborough, but of present relevance:
David Enthoven was ejected from the company by Mr. Alder in June 1977, and his (50% of EG) shares were bought out by Messrs. Alder & Fenwick. When my High Court writ was served on EG & Messrs. A&F in 1993, David Enthoven was himself threatened with action by Messrs. A&F, in the eventuality that the EG copyright interests acquired from DE by Messrs. A&F in 1977 were unsound. That is, if my action were successful, Messrs. A&F might then sue DE in turn!
Bad news of Lloyds’& Marine 475 emerged in the Autumn of 1988, and artist royalty streams began to be diverted by the EG Music Group as loans to the EG-related Athol & Co. Various EG artists & their solicitors began to contact EG when royalties went unpaid (I have copies of much of this correspondence on file). The EG person responsible for day-to-day exchanges with concerned EG artists (ie artists concerned to receive their royalties) in the late 1980s & early 1990s was Andrew Stanger
It was said to me of Mr. Stanger (by a highly-placed person within the EG Music Group) that Mr. Stanger knew where the bodies were buried. I cannot say whether Mr. Stnager did or did not know where the bodies were buried; but I know that this was told me by a highly-placed person within the EG Group.
A term often used by Mr. Stanger, when responding to complaints & points of dispute, was: there is no provision in our contract (eg for payment of interest on artist royalties diverted to Messrs. Alder & Fenwick’s use).
Here we have the clear collision between the cultures of my word is my bond and if there’s no provision in the contract, we’re not paying you and/or it is in the contract, we’ll take you to court – and we’ll win! (the latter part an actual threat made to me by Mr. Alder in person on April 17th. 1991, to compel me to remain within the EG office).
Cf this recent Diary entry of 10th. November...
Following my resignation from EG Management (April 8th. 1991) I contacted Coutts & notified them that Mr. Alder no longer had authority to act on my behalf. Mr. Alder’s response to having his Power of Attorney withdrawn was - you made me look like a common criminal! Within the (earlier) world of the English public school social / professional network, which continues to have a degree of resonance inside Coutts & some charitable bodies where Mr. Alder currently holds functions, to have withdrawn the POA might have been seen to imply in some way that Mr. Alder was not-quite-to-be-trusted, perhaps not a proper chap.
Who knows? We do know, however, that not very long afterwards Coutts called in a (relatively small) loan to the EG-related property company; and this contributed to the eventual & widespread collapse of the EG / Athol & Co. partners’ interests in 1992.
This is only the tip of the EG Iceberg. But today, very little business is conducted without a written contract; and very much of mine, is.
As an aside to this commentary on oral / aural / literate modes, and slipperiness in between:
Q. Why did EG want outright copyright ownership in 1975/6?
A: To get large advances for a by-then established catalogue, advances they would not share with the artists.
In 1969 the EG catalogue consisted one album: ITCOTCK. By1976 there were albums & publishing by KC, ELP, Roxy Music, Bryan Ferry & Eno. When the original licence with David Platz of Essex Music expired, EG asked for an advance. David Platz, the deservedly-respected publisher, was not prepared to give an advance to EG - unless the artists shared in it. I was informed (from within the EG office) that Mr. Alder’s response to this suggestion was: no one tells us what to do! I cannot say that this was Mr. Alder’s response, I can say that
the EG catalogue left Essex & went elsewhere, to where large advances were paid & which artists did not share in – directly. Some EG artists’ were extended loans by EG, and on which the artists paid EG interest.
This became The EG Way…
EG Management: %age 25% of gross artist income.
EG Music: 25% of gross publishing;
+ 25% of managed-writer income;
+ use of advances
eg business generated by use of advances (such as property acquisition & interest on EG loans to EG artists).
EG Records: 25% of gross record income as licensee to major
paid from Record One (ie artists paid all costs of making the record);
+ 25% of managed artist income from record sales.
Copyrights: owned by EG for eventual sale / dispersal @ c £4.5 million.
Bright wheeze or what?
The main modification / addition to The EG Way came when the partners needed money to support their declining interests outside the EG Music Group. The company EG Management became Athol & Co. and another company bearing the same name of EG Management was created from Andraford Ltd. (August – November 1988). During 1989-90 around $4 million was lent to Athol & Co. from the EG Music Group, and this included unpaid artist royalties.
Those artists with professional advisers outside the EG office were alerted to the problems. Those artists managed by EG (eg RF & Toyah) were advised & informed by the same representatives now diverting artist income to themselves via Athol & Co. – another bright wheeze, or what? This particular bright wheeze is known as conflict of interest, and this is a chapter in itself. During a telephone conversation with Mr. Alder on May 17th. 1991, he acknowledged to me: we are sensitive to suggestions of conflict of interest. But arguably, not too sensitive.
Where are they now? Mr. Alder has returned to reside in the Isle of Man, and this Diary regularly refers to various of Mr. Alder’s charitable & good works. Mr Fenwick runs the family firm of Fenwick’s & manages Roger Waters.
And life goes on.
16.12 Yesterday’s Diary referred to the problem of returns. What does a record company do with a pile of stock when their licence period expires? There are several answers to this, one of which is ship it to Israel. Where-to-ship-returns is a specialised area of record company exporting, with some territories favoured over others. Those most favoured tend to be smaller territories within the overall sales area, enjoying an inverse relationship to detailed sales accounting.
Here is another answer…
… the DGM Chamber of Easement + Returns Department. We offered these boxes of CDs to the relevant DGM artists, but mostly the artists declined to pay for the shipping.
The DGM Back Door Returns Department…
I do have the professional acquaintance of someone who would export these…
… without providing royalty statements to The California Guitar Trio afterwards.
16.55 David has been given a ticket to the Led Zeppelin show at Wembley on 10th. December.
17.17 Closing down the Workstation. Off to Bredonborough via Romain’s Emporium of Antiquities & Delight in Wilton.
An accident on the M5 just south of the A40 junction (the road from Cheltenham to Sherborne House) brought motorway traffic to a halt. I detoured through country lanes, arriving a little later than planned to the Minx & WillyFred The Contemplative…
WillyFred is contemplating which toy from Jeff & Lynn to chew next…
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