Henry Stone on Losing a $17.5 Million Buyout of TK Records by Columbia Records: “I Don’t See The Cash”

“TK began skyrocketing as a record company with groups like KC and The Sunshine Band and numerous other number 1 artists and records. This kept my lawyer Allen Grubman and his firm very busy making deals. TK was Allen’s number one client. For the next few years it was a day to day building of a business. Operations grew and deals were made, and then Walter Yetnikoff of Columbia Records made a multimillion dollar offer to license TK product worldwide. Allen came to me with the offer and we accepted. After 3 or 4 years of successful worldwide hits, Walter Yetnikoff approached myself and Allen on buying TK Records for 17.5 million dollars. The deal was made and finalized by the end of June and a check for 17 million 500 thousand dollars was drawn and signed by Walter Yetnikoff. Allen in his excitement went out and bought a Rolls Royce. I said to Allen, “I don’t see the cash.” Allen said, “Don’t worry. They’ve never turned down a deal that Walter Yetnikoff made.” However, any deal over 15 million hadda be okayed by the president. On his desk the next morning in early July was over 500 million dollars in returns from distributors and one stops and he said, “As of this day there will be no more deals made until we look into this situation.” This negated my deal with Columbia for the 17.5 million dollars.”

 

©Jake Katel and Henry Stone. All Rights Reserved

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