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Title: The final chapter?
Author: Lloyd Bradley
Source: Q

The final chapter?

The Frankie Goes To Hollywood phenomenon began in 1983 with spectacular, almost unprecedented success. Five years later - apparently exploited, underpaid, unable even to leave - Holly Johnson took ZTT Records to court claiming “unreasonable restraint of trade”. And he won. This is the full story.

On Wednesday 10 February, the usual knot of press photographers and television camera crews on permanent point duty outside the Law Courts in The Strand had swelled to a small army. Just after 4pm their patience was rewarded; in a flurry of anoraks and aluminium camera cases they surged forward to intercept a satisfied-looking figure in an excruciatingly fashionable high-buttoning green suit as he made his way to a taxi hailed by an aide. William “Holly” Johnson, ex-vocalist with Frankie Goes To Hollywood, informed the thrusting battery of microphones it was “a great day for recording artists everywhere”.

A few moments earlier a more conservatively dressed couple had emerged. Trevor Horn (brow beaten but affable) and Jill Sinclair (unsmiling) skirted round the newsmen, tersely wishing Johnson “all the best” as they stopped to cross the road.

The trio had been protagonists in a court case in which a breach of contract injunction, served by Horn and Sinclair as ZTT Records/Perfect Songs Publishing to stop Johnson recording solo with another company, was answered with a writ claiming the contract was “unreasonable restraint of trade” and the group’s recording bills were “excessive”. This costly (up to £250,000) and bitter legal action told an extraordinary tale about the music business of the mid-’80s, a tale of naive enthusiasm and complete disillusionment, of the marriage of the new thrusting independent labels proliferated by punk to the brisk young capitalism that was the hallmark, and of the exposure of the worst, most self-destructive aspects of both.

After three weeks of testimony that had seen the court visit ZTT’s Sarm West studios in London’s Ladbroke Grove to inspect recording hardware and hear some high-decibel rock’n’roll, and much pedantic legal jargon spiced with phrases like “the 12-inch Sex Mix of Relax” and “laying down tracks m’lud” - really! - Court 24 heard the judge instruct that Johnson be released from the contract he signed in 1983. Citing cases of a pub tied to a brewery, a petrol station tied to a petrol company and an unnamed “aspiring young songwriter” tied to a music publisher, Mr Justice Whitford described the document as both “unreasonable” and “nonsensical”. Regarding the recording costs of the albums: Welcome To The Pleasuredome’s £350,000 was considered justifiable due to its phenomenal success - 1.1 million copies sold, along with the singles Relax (4th best-selling single of all time in the UK at 1.7 million, a total of 5 million worldwide), Two Tribes (9th best-selling single at 1.5 million in the UK, best selling 12-inch single ever in UK at 800,000) and The Power Of Love (by reaching Number 1 FGTH became only the second British group to have three Number 1 s with their first three singles - the other was Gerry And The Pacemakers); the Liverpool album’s staggering £790,000, however, was made subject to a second enquiry concerning Johnson’s claim for compensation. Both sides felt court costs had been inflated by the requirement of unnecessary documentation, and will settle who pays what out of court.

The rot began as early as 1985, while Frankie Goes To Hollywood were still in the flush of their initial successes. “We changed solicitors,” explained Johnson, “because we discovered ours also represented Dave Robinson, who was MD of Island Records, ZTT’s distributor. It seemed like a conflict of interests. The new firm took the trouble to explain the contract to us, and we started to get unhappy as we realised the full implications of it.” Prior to that, in 1984, when FGTH were among the world’s top-selling groups, Johnson had questioned the fact that they were only being paid “pocket money - £5 per day, £10 if we were in the studio. Trevor Horn told me I was being greedy.” (The amount was raised to £200 per day in January 1985, after three huge hits and a Number 1 album.)

The contract - which was to become a standard for ZTT acts - gave the company control of everything except T-shirt sales (of which a percentage had to be paid for the use of company-owned artwork) and tour earnings (which, with a large expensive tour such as FGTH’s, are likely to turn out to be a loss). Although it allowed for “consultation” with the group over the choice of studios and producers used, it also stated that, in any dispute between the two parties, the company’s word would be final (in Pleasuredome’s case the studio was the Horn/Sinclair-owned Sarm and the producer Trevor Horn). Similarly, it allowed the group to be overridden in any discussions about recording budgets. Should a producer other than Horn be brought in, that producer’s royalty rate would be increased from 2.5 to 4 per cent and the difference be charged to the band. It assigned the band unusual royalty rates: 8 per cent on UK album sales and 6 per cent on album sales outside Britain (standard figures are around 15 and 12 per cent); singles royalties (unusually three-quarters of the agreed album rate), under FGTH’s contract, were three-quarters of three-quarters of the album rates - the double deduction allowing a cut to ZTT’s distributors, Island Records, which came out of the group’s profits - leaving the band with a meagre 4.5 per cent (UK) and 3.17 (abroad). It dictated that the group “promote” record releases - usually with television appearances around Europe - but placed the company under no obligation to support these travels financially. The contract had no specific time limit: it lasted for “five album releases” but, as it gave the company control of the release schedule, it could effectively last forever; it actually made it possible for ZTT to keep the group and not release any records by them. The contract contained a “leaving member clause”, stating that should any member leave the group he would immediately be subject, as a solo artist, to the same terms and royalties, starting from scratch regardless of how many albums that person had already contributed to as a group member. It was also “silent to” the accepted record company practice of renegotiating royalty rates following a big hit - it left any such agreements entirely dependent on “ZTT’s generosity”

This recording contract was tied to a publishing deal in an all-or-nothing offer: the Horn and Sinclair-owned Perfect Songs would control FGTH’s publishing on a 60/40 split (later to rise to 65/35) although the group received the larger share, it was still a below average figure. Publishing and recording deals coupled like this are extremely unusual: they used to be commonplace among independent record companies (majors have always kept the two aspects separate) but are no longer favoured as they can lead to too many complications if a group wants to leave a label.

Jill Sinclair maintains that this recording contract, the first she had encountered, as FGTH were ZTT’s first signing, was in common use throughout the industry. “I asked my lawyer to get another record company to send over a standard contract so all I’d have to do was fill in the royalties and advance.” (It’s believed to be the same contract Wham! signed with Innervision, which also became subject to “restraint of trade” proceedings, settled out of court.) “Frankie Goes To Hollywood had legal representation at the time they signed it, and I assumed they knew what they were getting into.” Johnson blames youth, naivety, the eagerness to get a record deal after being on the dole for so long (it is no secret that every major record label in London had passed on the group) and “the prospect of working with Trevor Horn” as the reason the group weren’t as cautious as they might have been.

Prior to this re-examination of the contract, the group had already experienced ZTT’s autocratic and self-serving methods: as the seemingly endless streams of remixes of the first two singles reached the shops; with two curious choices of B-sides for versions of Relax - Gerry And The Pacemakers’ 1965 Top 10 hit Ferry Across The Mersey and an interview with the band conducted by ex-music journalist Paul Morley, now in charge of ZTT’s marketing (it was Morley who devised the Frankie Say… slogans and changed the word “sock” to “suck”, thus ensuring Radio One banned Relax); and the stories - leaked from ZTT - that swept the music business claiming that FGTH didn’t play the music on Relax and Two Tribes.

Johnson explains: “I didn’t like all of the remixes, but was told by the company that they thought remixing so many times was a good idea as it would prolong the life of the records, so it was done. Ferry Across The Mersey was either Trevor or Paul Morley’s idea, which I was against in the beginning and the Paul Morley interview thing was a bit, er, odd. We did know about it being used as a B-side - Trevor told us - but we didn’t really think about it much. We didn’t really have much time to worry about any of that - since Relax went to Number 1, we were literally being dragged round Europe by the scruffs of our necks to do TV promotional appearances.”

The “Frankie Can’t Play Their Instruments” scam was potentially much more damaging as, together with the emphasis placed on the group’s corporately controlled marketing, it suggested they were “puppets”, thus defusing interest from other record companies. “It was very upsetting to all the members of the band at the time. It crushed our confidence, something that was still with us when we started work on Liverpool.”

ZTT’s barrister approached the three-and-a-half year-old revelations with enthusiasm in court, throwing a juicy morsel to the press gallery who appeared to be unaware of the affair. “Frankie Relaxed While Session Men Made The Hits” screamed one of several spirited newspaper “exposes”. While Johnson was quick to acknowledge Horn’s expertise and huge contribution to the group’s sound - “We couldn’t have made those records without him” he felt just as powerless to hit back at the stories as he did four years ago.

“Once it was done, it was done. It would’ve been no use explaining to people that when you make an electronic dance record not many people play on the record - that it’s a machine sequencing the bass, a machine sequencing the drums. People just loved stories about us being talentless. What happened was we cut several versions of Relax, then some session players cut some, then we cut some more. The final one that was used was a bass and drums sequence, Steve Lipson played some guitar, Andy Richards did the keyboards and they were my vocals. But, as Trevor said in court but nobody took any notice, the bassline was Mark O’Toole’s original bassline and the drum pattern was Peter Gill’s original drum pattern that he’d played on the demo.

“The rules in the studio are completely different from playing live: in the studio you make the best record you can using whatever is available to you. Everybody does it and it’s been going on for years, but if you try to tell people that, it just sounds like you’re making excuses.”

By mid-1985 the group were obliged to spend a year out of the UK for tax purposes and so they moved to Ireland to write songs for the second album. All was not well. Johnson says the whole group now saw the contract as restrictive but postponed any renegotiation in return for a Trevor Horn production on the forthcoming work. Sinclair maintains that only Johnson was dissatisfied but, after taking legal advice, he took the matter no further.

Press reports of internal schisms were by now commonplace. Johnson sees them as a result of “ZTT’s media machine creating factions within the group of The Lads/Paul and Holly, from the very beginning. It was dumb, because reality ended up imitating the press.” He believes such rifts were actively encouraged, as “five scallies from Liverpool can be more than a handful” and he stated in court that, during the first recording sessions, Horn took him and Paul Rutherford aside to suggest they “ditch” the other members and continue as a duo.

Sinclair denies any “divide and rule” policy, believing the split began with the appearance of Wolfgang Kuhle as Johnson’s personal manager and constant companion. “When he took Wolfgang on tour it was the thin end of the wedge. Naturally the others resented it as they didn’t have their wives or girlfriends with them.” She says she and Horn worked hard to keep the band together, flying to Jersey - where the group had moved - to “beg the others to accept the situation” and acknowledged Kuhle as Johnson’s management. Much was made of the relationship in court. Johnson, again sure the ZTT barrister was addressing the press rather than the bench, was “appalled at this tactic designed to wear us down”. It inspired headlines such as “Holly’s 6ft Hunk Split Frankies” and “Frankie’s Friend Led Him Astray”. The singer thinks Kuhle became a scapegoat for “all sorts of internal problems the band was having”.

The recording of Liverpool began in Wisseloord, just outside Amsterdam, in November 1985, and the band stayed there until March 1986 when they moved to ZTT’s Sarm West to work until June. In spite of a verbal agreement, made in Ibiza, where the group stayed after Jersey, Horn was not producing, his former engineer Steve Lipson was in charge. The ZTT line is that the appointment of Lipson had been agreed by the other members of the band, as the company “wanted the group to have more say in production and not be reliant on Trevor, but Johnson didn’t turn up for the meetings at which this was agreed.” Johnson denies any knowledge of the arrangement or meetings. During recording, the singer seemed even more distant from the band. ZTT maintain he was becoming “impossible to work with” - he wouldn’t fall in with the accepted FGTH practice of recording at night, was present for only 23 days out of seven months’ recording, refused to sing on Do Ya Think I’m Sexy? (Paul Rutherford deputised), changed his telephone number without informing the company and failed to turn up to meetings. Sinclair is sure Johnson’s apparent disinterest in the album was due to its rock (as opposed to dance) orientation, a new direction ZTT wholeheartedly endorsed because it meant “they had something they could tour with, as it would be easier to play live”. Sinclair claims that during the recording the band were “distraught” because they thought Johnson had left.

Johnson denies ever stating, at that time, he was going to leave. He claims he did everything that was required of him to the best of his ability - “I perform better to a dance groove” - wanted to record from 9 to 5 to be able “to live as normal a life as possible” and concedes that, although not completely happy with the album’s rock arrangements, it was “better than The Smiths”.

Troubles continued after the band had finished in the studio. Trevor Horn took over the work of remixing the album until its November release and then carried on for a further three months remixing Watching The Wildlife and Warriors Of The Wasteland for single releases. He spent an estimated £500,000. Johnson believes Horn was obsessive about anything with his name on turning out less than perfect and says that the whole group grew alarmed at the costly delay. “We were given an assurance (again verbal, again in Ibiza) that Liverpool would cost less than Pleasuredome, and we finished up - after it was put back from April to September - having to sell 2.5 million before it would be into profit.” An uphill struggle indeed; it would’ve involved more than doubling Pleasuredome’s figures, without the impact of FGTH’s initial spectacular success. So far, Liverpool’s sales are hovering around the 800,000 mark. Sinclair justifies the time and money by saying it was to create different 12-inch mixes, and that American distributors insisted on Watching The Wildlife being completely remixed for that market. She goes on to tell that the other members of the group “specifically asked for the extra work to be done” and maintains that ZTT hurried them into recording as a last ditch attempt to keep the group together. “The album would’ve been a lot easier if they weren’t in such disarray when they started recording.” Horn has a reputation for ignoring budgets in his quests for perfection and here, as co-owner of the record company that oversees production costs, he felt free to carry on as long as he liked.

By the end of the year, Liverpool’s lukewarm reception was accelerating the crisis at ZTT: in buying out the bankrupt Stiff Records in August ‘86 for £300,000 they had taken over the label’s debts of £1.5 million; they were attempting to extricate themselves from a manufacturing and distribution deal with Island; German signing Propaganda, after racking up a recording bill of nearly £250,000 for their less-than-successful first album, The Secret Wish, were suing; French torch singer Anne Pigalle wanted out; Das Psych-Oh Rangers, a trio bent on mutating abrasive rock ‘n’ roll into a barrage of electronic white noise, were threatening legal action to invalidate their contract after the label had failed in its obligation to release an album from them within a year; The Art Of Noise left as they didn’t feel confident about the way they were being marketed and had little control over it; and the label had conspicuously failed to match the level of success it had enjoyed with the first FGTH releases.

Johnson describes the situation at the company. “There was a very low morale all round - from the acts to the office staff. It was a discontent that began with acts as there was always a kind of teachers and school kids atmosphere between Jill and Trevor and the groups. We were like the teachers’ pets because we were doing well, which was unfortunate for other people who didn’t have Trevor’s attention. Like there’d be Propaganda hanging round the studio waiting to start work with Trevor when he was spending all his time on us and this sort of thing led to a lot of unhappiness. It became a very unhappy ship. Everyone thought everyone else was going behind their backs. Trevor and Jill should’ve realised that would happen, so either they were being very immature or they wanted it that way.”

Sinclair, however, refused to admit ZTT had a morale problem. “It was only Holly. The other Frankie lads were fine, Anne Pigalle left simply because we couldn’t give her what she wanted and she couldn’t give us what we wanted, The Art Of Noise felt they could do better elsewhere, Propaganda had split up after rows with Claudia Brucken (vocalist) after she married Paul Morley - we can hardly be blamed for that, she can’t help who she falls in love with.” She claims that the lack of hits didn’t affect anything: “Any record company only expects a 10 per cent success ratio; we’d done considerably better than that.”

Johnson sums the situation up: “I’m not saying they had the intention of shafting anybody, but they’d set out to maximise their own profits and in doing so had become a microcosm of a major label with all the in-built lack of communication.”

In March ‘87 he left FGTH. “I had to take responsibility for my own business dealings - I felt it couldn’t be swept under the carpet any longer.”

Sinclair claims that two months earlier, ZTT offered him the chance to record a solo album before doing another Frankie album, he and Kuhle seemed agreeable but cancelled a meeting to discuss the recording schedule at an hour’s notice signalling the end of any dialogue. Johnson maintains the solo project before another group recording was his idea but the company was cold to it.

On July 23, 1987, ZTT received notification from Johnson’s solicitors that he was signing a solo deal with MCA. Johnson: “The atmosphere at ZTT was impossible to work in. I don’t think they had any respect for me.” Sinclair: “MCA offered him more money and royalties, they advanced him £150,000 towards any legal fees incurred getting out of his contract with us” ZTT’s injunction was served on August 10; Johnson’s counter suits followed swiftly.

Johnson believes that the judgement will have far-reaching implications in the British music business: “If artists are unhappy and companies are aware that maybe contracts are a bit one-sided, then they’ll both make greater efforts to renegotiate rather than end up in court. It’s set a precedent inasmuch as artists will now know they can get an unreasonable arrangement broken, so any renegotiations will start from a much fairer position. It should bring people together rather than tear them apart like has happened in the past.”

Jill Sinclair admits that the standard ZTT recording contract has now been substantially altered “to include the vast amounts of money groups can earn in the long term”. The remaining members of FGTH were released by the company during the hearing, a week before the verdict was delivered; the legal process has been set in motion to release Das Psych-Oh Rangers without going to court. ZTT will be appealing against the judgement, not to get the verdict overturned but to claim damages to compensate for loss of income from any recordings Johnson might have made had he remained there. Jill Sinclair remains adamant that this was a “novel” verdict in such a restraint of trade case. “Unlike the other examples the judge cited when he announced the verdict, which hinged on what couldn’t be done or how one party had suffered, this one failed to take into account what had been done under the terms of the contract - Holly Johnson’s career hadn’t suffered because of the contract.”

Brian Howard of Russell’s, Johnson’s legal representatives, agrees that the result will make a difference, albeit a less dramatic one than the singer envisages: “It will swing the balance of power further towards new, pretty naive groups than it has been in the past, but it won’t actually tip the scales in their favour. What it will certainly do is make record companies much more careful in the deals they’re offering, both in terms of finance and actual contract structuring, making provisions for renegotiating in the case of huge success.”

Lloyd Bradley