Curiously, although this managerial contract was the second one to be drawn up between the Beatles and Brian Epstein, and as such the second to be signed by all four members of the group -- it was the first that Epstein himself signed. On the 24th January, 1962 The Beatles signed their first contract with Brian Epstein, accepting his terms as their manager -- significantly however Epstein himself had decided against adding his own signature to the original document. In his autobiography, he explained that this decision did not mean that he had intended to do anything other than honour it's terms, but that he had wanted to prove himself to be a capable manager first. He wrote: ...I had finally secured their signatures on a contract on January 24th, 1962..but..I had not...signed it myself. It provided them with safeguards against unemployment, protected them and me against any breach of faith and made the terms of my percentages quite clear. Why had I not signed it? I believe it was because even though I knew I would keep the contract in every clause, I had not 100 per cent faith in myself to help the Beatles adequately. In other words, I wanted to free the Beatles of their obligations if I felt they would be better off.. Alistair Taylor who witnessed the signatures on the first contract, downstairs in Epstein's record store NEMS, recalled: ...There were only five signatures on that contract. The fifth signature was mine because Brian never signed that contract. He always said at the time that he didn't want the boys to feel bound to him. They could walk away from the contract any time they liked and he couldn't hold them if he didn't sign it...So I witnessed his non-signature because he said 'I'll sign it later, Alistair. Witness mine as well'. So I'm down in history as witnessing a non-signature...
Once Epstein had proved to himself that he was indeed a worthy manager, by securing The Beatles a recording contract with EMI and setting them firmly on the path towards their meteoric rise to fame, he added his signature to this revised five-year management contract, on October 2nd, 1962, three days before the release of their debut single Love Me Do.
Over the years, and with the benefit of hindsight, there has probably been as much speculation regarding the 25 share which Epstein secured with this contract, as there has about his competence as a manager. The Beatles' own disenchantment with Brian's financial dealings has, in Peter Doggett's words ..undermined Epstein's posthumous reputation as the initial architect of The Beatles' business empire.. That said, his unquestionable loyalty and devotion to them, earned their trust - if anything, it was his stunningly naive approach to financial affairs which let them down. As Tony Barrow insists "He was totally straight in his dealings with his artists, and also with the rest of the music business. The Beatles trusted him completely, and justifiably, and that freed them to concentrate on their music." Yet McCartney spokesman Miles aired a different interpretation of Epstein's dealings with the Beatles: "The expenses deducted from their share of the income were enormous, not least because Brian himself had very refined tastes in hotels, wine and food, all of which the Beatles paid for, not NEMS. By taking 25 of the gross, Brian made at least twice as much as any individual Beatle, and probably a great deal more than that." Epstein's 25 cut of the Beatles' pre-tax income (officially paid to his NEMS Enterprises company) was not uniquely high. The 50-50 split agreed by Elvis and the Colonel was mirrored when Gordon Mills began to handle Tom Jones, while pioneering UK rock'n'roll manager Larry Parnes sometimes took a similar fee. Conversely, many managers took no more than 10 of their artists' earnings, but recouped by removing every possible business expense - including the services of top-flight accountants, PR organisations, stylists and musical directors - from the artist's share.
In Epstein's eyes, he was much more than the Beatles' booking clerk: "I act as manager as well as agent. Most acts have one of each - to whom, by the way, they pay separate commissions." He stressed that NEMS offered the full gamut of showbiz services to its clients: "We direct and guide and shape careers. We have our own experts. We run our own public relations division. These things cost a fortune if they are done in the right way. One's profits from that 25 are not really as fantastic as people imagine. Critics often forget that we have hefty outgoings just like any other firm." The fine wines and five-star hotels were merely a necessary signal to his business contacts of his success and clout.