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Credit where credit’s due: Many thanks to Mark W for the article scan

Title: A suitably spectacular finale
Author: Simon Garfield
Source: The rock yearbook 1989

A SUITABLY SPECTACULAR FINALE

ZTT/Frankie Goes To Hollywood was the perfect pop partnership of the eighties; its success pointed to a new dawn for independent record labels. Simon Garfield watched it submerge itself in a sea of good old fashioned acrimony.

It was May 1987, and Paul Morley was making a point at a ZTT board meeting in Ladbroke Grove. Morley, then a ZTT director and - since his writing days at NME - a man aware of the power of bad press, had scanned the recent cuttings on his label’s relationships with Propaganda and Das Psych-Oh Rangers and observed that “ZTT is now perceived as a bully label.”

Eight months on at the High Court in the Strand, and Morley is nowhere to be seen. But his observations have seldom been more prophetic. In some eyes, the bully label had turned into a grisly ogre, a baffling high-walled maze of super-tech studio gadgetry and exploitative business practice. This was Holly Johnson’s view, an opinion he raised throughout his three-week attempt to free himself from all ZTT ties and win back what he regarded as excessive recording costs deducted from the royalties he earned with Frankie Goes To Hollywood. And having toured the ZTT studios and turned a nose up at all manner of trivial pop diversions, it became - in essence at least - the view of Mr Justice Whitford, who let Johnson go to MCA with considerable funds in his pocket.

The popular press loved the saga. Not so much because it exercised the great, famous pop stars getting their own back on their publishing and record companies, but because it repainted a reassuringly venal and depraved pop world picture. The case covered homosexuality, bags of used fivers, drunken envy among spoiled adolescents, and an element that readers with even the slimmest knowledge of modern-day recording techniques were well aware of - that and these days rather trendy, rite of not all the sounds on every record were made by good-looking cover stars playing old-fashioned instruments.

For ZTT, the courtroom events marked not just the end of its relationship with Johnson, but also the close of a unique and ever-tumultuous first period in the label’s history. Why bother to paraphrase the last decade of British pop in terms of CBS, PolyGram and Virgin or George Michael, Dire Straits and Boy George, when you could do it in terms of just one small independent company?

From its inception in 1983 to the court case in January 1988, ZTT had everything: entrepreneurship; sound creative judgement; inspired marketing; dramatic, shooting success; bullish financial takeovers; harsh boardroom tussles; and then a protracted downward spiral, bereft of most of the above. There was a human-interest angle: the two ZTT directors, businesswoman Jill Sinclair and record producer Trevor Horn, were married and had kids; Sinclair even wrote long workmanlike letters attempting to narrow the chasm between herself and Horn’s parents. And then there was the legal angle: the severing of ties, rarely amicably, with signings The Art Of Noise, Propaganda, Andrew Poppy and Das Psych-Oh Rangers, and even a row with their distributors Island Records.

It’s a perfect parabolic parable: massive success, massive failure and now, at the time of writing in June 1988, what looks like an upward swing with The Pogues and Nasty Rox Inc. How can this happen? Isn’t success supposed to breed success and failure to breed failure?

For Jill Sinclair, the answer is rooted in experience: “It’s very hard when you’re a small licensed label, and you’re very successful, to keep everyone happy. When you have great success, you think all you need to do is to make good records, but there’s a lot more to it than that. We in our naivety did not realize the problems that small labels can get into with things like recording costs. Those experiences have been very painful. Running a record label is so hard.”

For music business solicitor Brian Carr, the answer has something to do with ZTT contracts. Acting for Propaganda in their successful attempt to leave ZTT in 1987, he discovered there was no limit to the amount Trevor Horn could charge for his efforts as producer. In theory this could mean that even a successful artist might never see any net earnings, such would be the debt to the recording process. “Normally a company exercises some control over expenditure in the studio,” says Carr, “and in this case there was no control over Trevor’s expenditure. The agreement entered into by the group [contained] no way in which one could obtain control… There’s no use saying, as I think was said, that Trevor’s not prepared to work to a budget, that’s just being irresponsible.”

Another ZTT act, bombastic Das Psych-Oh Rangers, signed to the label on the express understanding that they would not be produced by Trevor Horn, but soon found themselves part of the common ZTT dilemma. Horn and Sinclair seemed to control everything. They had signed the band, were producing the band, were using their own studios and were able to charge their own rates and work at their own pace, secure in the knowledge that any royalties due to their artistes would first have to pay their ZTT bills.

Additionally, the ZTT producers would receive royalties on each record sold, and the company’s publishing arm, Perfect Songs, would take a large cut from all earnings accruing from every song in their catalogue. Frankie Goes To Hollywood - produced by Horn, engineered by an in-house ZTT engineer, recorded at ZTT’s Sarm Studios and initially published by Perfect Songs on a 60/40 split - were locked into the lucrative Horn/Sinclair circle for every penny they made bar touring receipts and T-shirt sales (the latter of which cost them a royalty for use of company copyrighted artwork).

The terms of Holly Johnson’s employment with his record and publishing companies were exposed fully in the courtroom. The band received perhaps half of the royalties a group with their success could expect (only 8 per cent of retail price on album sales at home, 6 per cent abroad; 4.5 per cent on single sales at home, 3.2 abroad). Technically they could be held to ZTT indefinitely, with no guaranteed release dates for any of their recordings. Publishing terms were similarly ungenerous.

There was nothing illegal in any of this, nor was there anything terribly novel - even in the wised-up late eighties it was clear that George Michael, Annie Lennox, Elton John and Joan Armatrading had all learnt little from the experiences of The Beatles, Stones and hosts of other shamelessly exploited artists.

In freeing Johnson, Mr Justice Whitford found the recording contract to be unreasonable, nonsensical, and unfair in that it detailed no way of limiting what were seen as excessive recording costs.

Johnson claimed afterwards that it was “a great day for musicians everywhere”, and forecast wide-reaching implications for the music industry. In effect, the implications are likely to be small. The publicity generated by the case may direct more artistes towards good solicitors, but Frankie Goes To Hollywood themselves sought legal advice before signing. If anything, it may improve an artiste’s case during any contractual renegotiation that follows commercial success.

It’s a depressing detail of music business life, but it is exactly that - a business. Faced with such a pedigree of exploitation, not least in black music, who can blame new artists for signing now and deciphering all the niggly clawback clauses later?

Six months after the court hearing, Holly Johnson had recorded two tracks for his first solo album for MCA, and looked back on the trial as one of the worst experiences of his life. “The press aspect was dreadful,” he claims. “Using the first days’ evidence they tried to discredit me both as a performer and as an individual. I felt a bit like an empty shell afterwards. I wish I hadn’t gone through the wear and tear. This probably sounds like idealistic twaddle, but it was worth it because you have to fight for what you believe. It’s such a shame I was in the courts rather than in the charts.”