Merger With NEMS
On 13 January 1967 Stigwood signed a deal with his friend and colleague Brian Epstein to merge their two companies. The Beatles were by now no longer touring, and Epstein was tiring of the demands of his ever-expanding business. He was keen to reduce his involvement in NEMS Enterprises, the company he had founded in 1963, so he decided to strike a deal with Stigwood.
Why Epstein decided to merge with Stigwood is uncertain. There had been numerous other offers made for NEMS over the previous couple of years and Epstein is reported to have turned down more than one multi-million-dollar offer from American interests, so it is unlikely that he chose to become a partner with Stigwood simply for financial reasons.
According to author George Gunby, Epstein told The Beatles' publicist Alistair Taylor that Stigwood had originally offered to buy NEMS, but the deal eventually became a merger, in which Stigwood would have to put all his company assets into NEMS; in return he would received a reciprocal shareholding in NEMS, plus a salary, an executive position as co-managing director, and access to all of NEMS now-considerable financial and other resources.
It was a beneficial arrangement for Stigwood, and it effectively placed him at the pinnacle of the British pop industry in one step, but Epstein seems to have been about the only person in NEMS who was keen on the idea. Alastair Taylor is reported to have exclaimed "You must be joking!" when Epstein told him of the merger. Epstein was also considering handing over his role as manager of The Beatles, but when the Fab Four learned of this they were outraged. They evidently disliked Stigwood intensely. Interviewed in 2000 by Greil Marcus, Paul McCartney recalled the group's angry reaction:
"We said, 'In fact, if you do, if you somehow manage to pull this off, we can promise you one thing. We will record God Save the Queen for every single record we make from now on and we'll sing it out of tune. That's a promise. So if this guy buys us, that's what he's buying.'"
Consequently, Epstein stayed on as manager of The Beatles but he handed responsibility for most of his other acts to Stigwood.
The NEMS' staff were also reportedly unhappy about the deal. The company had expanded rapidly growing from fifteen staff in 1964 to eighty in 1966. Epstein had taken over the Vic Lewis agency in 1965, (bringing in Donovan, Petula Clark and Matt Monro) and Lewis became a NEMS director, but many staff members found Lewis' abrasive manner difficult to handle. According to Gunby: "...(they) could see the same problems arising, multiplied tenfold, when Stigwood moved in. His autocratic style would be a time bomb ticking beneath people who had stuck by Epstein through thick and thin."
Gunby says that Epstein told Derek Taylor that the merger with Stigwood would bring new talent into the fold and would strengthen the operation. Taylor remained unconvinced—Stigwood, he said, had "a ruthless reputation, a cavalier style that upset more people than it pleased." Epstein himself soon found himself at odds with his new partner—he was reportedly unhappy about Stigwood's spending, was upset by Stigwood renting a yacht for The Bee Gees, and was also angered by Stigwood's unilateral decision to send Alastair Taylor to America on a business trip, a plan Epstein overruled. It is claimed that Epstein subsequently decided that he didn't want Stigwood in the company.
Read more about this topic: Robert Stigwood