Demise of a Debauched Record Label: McCartney’s ‘Boring’ Accusation

The broom cupboard at EMI Records’ headquarters in Kensington was legendary. Behind the mops and brushes, the walls were lined in studded leather… with secret compartments promising hidden pleasures.

This closet had once been a lift. It used to go up to a penthouse apartment reserved only for artists, top executives and their special guests.

For visitors who were too impatient to wait until they reached the fifth floor to get the party started, bottles of vodka and sex toys were stowed in the lift’s discreet drawers.

The room at the top was ‘laid out like a knocking shop’, one former music boss told me. The lift was installed when the offices belonged to Virgin Records, before it was taken over by EMI, and served as a reminder of an era when money was no object and everyone had a pass marked ‘excess all areas’.

In the 1970s – the golden age of rock – EMI was the biggest record company in the world. It had The Beatles and Pink Floyd, David Bowie and Kate Bush, Elton John and Queen. In an era when much of British industry was in the doldrums, crippled by strikes and power cuts, the music business was a raging success.

And when Thatcherism brought in the boom years, EMI’s riches multiplied exponentially. The arrival of compact discs meant the company could sell its back catalogue of albums all over again to millions of customers who already owned the music on vinyl LPs.

Electric and Musical Industries Ltd [EMI] had more money than it knew how to spend. Splashing out on all the drugs, alcohol and sex parties ever imagined could hardly make a dent in its budgets.

And yet, within a couple of decades, EMI had collapsed. By 2012 it was defunct, worthless. How that happened, and the crazed bacchanalia that led up to it, has fascinated me for years.

To discover the real story, I interviewed dozens of executives, musicians and party animals who were in the thick of it, for a six-part podcast called Music, Money And Mayhem.

These tales of debauchery have been part of my life since my teens, when a neighbour called Leslie Hill used to entertain me and my parents with his jaw-dropping anecdotes.

Leslie was managing director of EMI in the 1970s, when he signed the Sex Pistols to a two-year contract. A few weeks later, the band caused national outrage by swearing on television, and Leslie was forced to fire them from the label.

As long as the depravities didn’t happen on live TV, other rock stars could get away with just about anything. Leslie was a guest at Freddie Mercury’s 26th birthday party in 1972 when, at the climax of a stripper’s act, guests popped the corks on a crate of champagne and sprayed her with bubbles.

One story that appealed to my adolescent sense of humour featured a punk rocker called Slimy Toad. After Mr Toad was caught relieving himself into the water feature in the EMI foyer, a memo went round to all staff, requesting steps were taken to prevent artists from ‘p***ing in the fountain’.

To me, EMI sounded like the best place in the world to work. And that was the problem. A lot of people on the payroll were having too much fun.

Music scouts looking for bands to sign spent every night criss-crossing London by cab. At each venue, they left the meter running. That kind of extravagance meant the EMI cab account was purportedly the second highest in London.

In the 1980s, such corporate decadence didn’t matter. As the entire catalogues of Britain’s biggest bands were repackaged and resold on CD, then remastered and sold for a third time, EMI was generating cash faster than the Bank of England could print £50 notes.

Add to that the arrival of Dire Straits, whose 1985 album Brothers In Arms sold more than 30 million copies worldwide. EMI had the Midas touch and kept signing the best in British music, including Pet Shop Boys, Radiohead and Coldplay. The label was also at the forefront of 90s Britpop, launching Blur and Robbie Williams.

Small wonder that when one singer requested candles backstage, EMI splurged £20,000 on enough candelabras to light the Albert Hall. Why wouldn’t you?

The epitome of music business insanity was the homage paid to MC Hammer, a rapper as famous for his baggy pants as his pop-friendly hip-hop.

His mega-hit U Can’t Touch This helped his 1990 album Please Hammer Don’t Hurt ’Em go multi-platinum, achieving diamond status – racking up more than 18 million sales.

Nowadays, Hammer is viewed as an almost comical figure, no more than a flash in the pan. But in 1990 he was rap royalty, and he expected to be treated as the emperor of EMI. When he visited London, he demanded that the company’s top executives line up and pay homage. And they did.

As Hammer sat on a throne, imperious behind dark glasses, with his hands clasped on a silver cane, all the heads of department approached one at a time to thank him for making them so much money. Hammer bestowed a patronising nod on each of them, as though he had the power to throw them to the lions if he chose.

The man who told this story to me said: ‘The head of promotions and myself, we were kind of giggling at the back. And we got shot some dirty looks from our colleagues, warning us not to muck everything up.’

This barmy behaviour was commonplace across the whole music business, as everyone thought the party would last for ever.

What none of them realised was that they were celebrating the last days of Rome. By the late 1990s, the music business was already sowing the seeds of its own destruction.

Tony Wadsworth, then the head of EMI UK, was handed an unmarked CD by a junior colleague. ‘He said he’d burned music on to it that he had downloaded for free from the internet – Beatles music. I asked which song and he said, “No, all of it. Every song”. Our most valuable asset was now available for free.’

At the time, EMI owned the rights to The Beatles’ recordings. This ancient deal was viewed by Paul McCartney as an accident of history, probably the most lucrative accident in the annals of music, because Paul and John Lennon were barely out of their teens when they signed up to EMI.

Since the height of Beatlemania, those songs had been a reliable source of riches for EMI. But for the Millennial generation, paying for music was suddenly uncool.

File-sharing services such as Napster flourished, enabling fans to siphon compressed music files on to their computers and convert them into audio tracks on CDs – albeit at the painfully slow speeds of dial-up internet services.

At first, it took anything up to an hour to download one song. But it cost nothing. I admit, I was using Napster by 2001 because, with CDs at £15 each, I couldn’t afford to buy everything I wanted. Like millions, I felt the big labels had been exploiting us for decades, and they owed us some free music.

Napster was shut down by aggressive lawsuits, but other file-sharing networks proliferated. Unable to ban the software, record companies – including EMI – made the terrible mistake of suing individual fans. That made them millions of enemies overnight.

Unable to fathom what was going on, the music execs did what they’d always done – signed massive acts who they hoped would dig them out of the hole.

After Robbie Williams was handed an £80million advance, EMI needed his 2006 album Rudebox to sell by the lorryload… so they pressed millions of CDs in anticipation of demand.

But Rudebox isn’t one of Robbie’s finest efforts and vast numbers came back unsold. Rumour has it that they sat in a warehouse for years before eventually being shipped to China, where they were pulverised and used to surface the roads. The truth of this story is contested but what’s certain is that Rudebox cost EMI a lot of money.

With every disaster, the share price dropped sharply. Hundreds of employees were laid off, but the share price kept falling. This was no longer a happy place to work. In desperation, the company looked to merge with another entertainment giant, Warner, but the deal fell through.

And then Paul McCartney walked out. Despite having been with EMI’s subsidiary Parlophone for more than 40 years, and even though EMI owned the Beatles catalogue, he left the building in March 2007, complaining that the company had become too boring.

A sell-off was inevitable. The buyer was Guy Hands, the head of a private equity investment outfit called Terra Firma, who bought the company in August 2007 for £2.7billion – all of it, including all The Beatles’ songs.

McCartney wasn’t happy to see his music fall into the hands of a City mogul. On a transatlantic flight, he happened to look over his shoulder and spotted Hands a couple of rows behind him in first class.

Hands told me Macca was in seat 1A, the place at the front reserved for royalty and megastars. He had the seat next to him for his guitar.

‘He cornered me,’ Hands said. ‘There’s no way you can escape on a plane. He was incredibly articulate and very business focused.’

McCartney wanted to buy back his music. Hands refused to sell. Instead, he committed what many regarded as sacrilege – repackaging Beatles albums as a nostalgia product and promoting them on the shopping channel QVC – which turned out to be a huge success.

Nothing could have illustrated more clearly that Hands was not sentimental about music. In fact, the man who’s been described as ‘the least cool man in the world’ can’t tell one song from another, and is unable to recognise or remember any melody. And this was the individual in control of Britain’s pop heritage.

Since the music was no longer selling as it used to, Hands decided to develop new ways of exploiting stellar acts. He invited Mick Jagger to lunch and pitched a series of left-field schemes to him – a Rolling Stones board game, a video game and, wildest of all, a reality show called Stones Idol.

Picture it: Mick and Keith Richards hosting their version of The X Factor, judging clueless, wannabe rock stars. The best part? Contestants would stay in a Rolling Stones-themed hotel, complete with pre-trashed rooms.

Jagger refuses to confirm rumours that he announced he had to use the bathroom, then simply left the building, walking out with the meeting unfinished. What is undeniable is that within weeks, the Stones had quit EMI.

Who knows how Sir Mick would have reacted if Hands had suggested the moneyspinner he proposed to Coldplay: a toothbrush that played their breakthrough hit, Yellow. Come to that, why would anyone want ‘yellow’ teeth? It wasn’t only music legends Hands upset. When he saw the £200,000 budget for ‘fruit and flowers’, he demanded to know why it was so exorbitant, and was aghast to be told this was a euphemism for drugs.

Hands claims that musicians and executives expected to be supplied with cocaine and weed as a perk – something that is denied by EMI execs. Hands says he vetoed the ‘fruit and flowers’ budget, to the outrage of everyone – not least the drug dealers.

He then announced EMI artists and staff would have to submit to drugs tests. The reaction to that was so ferocious he backed down.

By now, he was the most loathed man in the industry. Singer Joss Stone was not alone in demanding a meeting with Hands, and when it was granted she took her dog along. As she and Hands argued over her next advance, the dog did what many of the label’s artists would have liked to do but didn’t: it relieved itself on his carpet.

In 2012, EMI was broken up and sold to other labels including Universal, Warners and Sony – destroyed by a combination of wild excess, even wilder mismanagement and colossal bad luck.

The sex lift that became a broom cupboard could be a metaphor for EMI itself.