Bruce Springsteen has always been an artist first, businessman second. But that philosophy got him deep in legal trouble early in his career, when he put too much trust into his first manager.
Despite now being an infamous figure in Springsteen’s career, Mike Appel deserves credit for discovering his talent. Appel knew who he would become as soon as he saw him perform. He earned Springsteen’s trust because he saw the future rock legend in him before anyone else. He sunk all his finances into launching Springsteen’s career. He put his family’s livelihood at risk. And he sincerely believed in Springsteen’s talent.
That confidence helped Appel land Springsteen his first recording contract with Columbia Records, which was signed on June 9, 1972. But because of his lack of legal savvy and unwavering trust in Appel, the contracts he signed would relinquish most of the profits and control of his own records that he hadn’t even made yet.
Appel’s all-or-nothing attitude and complete devotion made Springsteen trust him with his word.
“I needed somebody else who was a little crazy in the eyes because that was my approach to it all,” Springsteen says in the biography Bruce. It was not business. If business had to be a part of it, then it had to be a part of it. But it wasn’t a business. It was an idea and an opportunity, and Mike understood that part of it very, very well. And that was important to me.”
If only business was important to him at the time.
The Big Break
Appel may have handed Springsteen some bad contracts, but he does deserve credit for getting his foot in the door. His aggressiveness landed them a meeting with John Hammond, a legendary talent scout and producer at Columbia, on May 2, 1972. But that didn’t stop Appel from nearly ruining the deal before it started.
Hammond was famous for discovering Bob Dylan, so Appel used that in his audacious opening remarks:
“So you’re the man who is supposed to have discovered Bob Dylan…Now, I want to see if you’ve got any ears, ’cause I’ve got somebody better than Dylan.”
Appel’s disrespect irked Hammond nearly to his breaking point. “Stop! You’re making me hate you!” he said, according to the Springsteen biography Two Hearts, The Story.
Bruce sat there while Appel continued to irritate Hammond, hoping he’d actually get to play a song before they got booted out of the office. Eventually he got to play “It’s Hard to Be a Saint in the City”, and Hammond saw the singular talent Appel was talking about.
“I heard immediately that he was a born poet,” he said. “I kept a lid on my excitement.”
A few days later, CBS Records President Clive Davis had a demo in his hands and he joined Hammond in the quest to sign Springsteen. But first, Appel had some deals of his own to make with his client.
Sometime in May 1972, Appel handed Springsteen a series of contracts. In perhaps the biggest mistake of his young career, Springsteen failed to read through the fine print, maintaining his absolute trust in Appel’s judgment.
The contracts began as a series of management agreements between Springsteen and Appel, along with his partner, production company Laurel Canyon Ltd. Some of the striking details of the agreements that Springsteen unwittingly signed:
- Established Laurel Canyon as 100 percent owners of Springsteen’s song catalog
- Royalty rate for retail sales would grant 3% to Springsteen, 9% to Appel/Laurel Canyon
- Springsteen’s resulting profits would be split 50-50 with Appel (eventually changed to 75-25)
You don’t need to be a math genius to know that Springsteen lost out big-time. But in a way he also screwed himself, since he never bothered to have a lawyer look through the contracts before signing them – or at least com through the contracts himself.
The deal would eventually become a joint contract between Laurel Canyon and Columbia, which granted a $40,000 budget and $25,000 advance to produce Springsteen’s debut album Greetings from Asbury Park. At that point Springsteen just wanted to get to work.
It wasn’t until after the massive success of Born to Run that Springsteen realized the financial trouble he created for himself. In early 1976 he recruited producer Jon Landau, who famously reviewed Springsteen’s 1974 Harvard Square performance where he dubbed him ‘the future of rock ‘n’ roll’, to look the contracts over. He immediately recommended calling a lawyer.
With the help of the law firm of Mayer, Nussbaum and Katz, Springsteen finally gave the contracts the legal scrutiny it needed. Appel caught wind of this, and of Springsteen’s growing interest in Landau as a producer.
Springsteen and Landau filed their first big lawsuit on July 27, 1976, arguing that Appel had failed to act in the best financial interests of his client in exploiting a naïve Springsteen for his own financial benefit.
Appel and his attorney Leonard Marks struck back just two days later, seeking a permanent injunction to ban Springsteen and Landau from entering a studio together, which judge Arnold Fein upheld. The contracts had bound Springsteen to Appel as his producer and no one else.
This issue started a string of troubles that eventually had Springsteen telling the judge “I’m fighting for my life.” But the case began to swing in his favor when he hired Peter Parcher as his new lawyer and began crafting his testimonies like his concerts – and the tide began to turn.
“Springsteen’s performance at deposition proceedings, according to insiders, was akin to his stage act,” reads a 1977 Rolling Stone feature on the case. “Colorfully and authoritatively, he parried each of Marks’ allegations that Appel, not Springsteen, was the real architect of his success. If he was fighting for his life, he was adding to his battle all the considerable knowledge of stagecraft at his command. Friends said Bruce was proud of himself; he knew he was beating a fine attorney at his own game.”
A series of damning affidavits painted Appel as the villain against almost every other partner Springsteen had in his early career, and rumors of a settlement began circulating. Springsteen expressed his devotion to Landau as his new producer in an impassioned deposition on December 8, 1976:
“Landau’s ability to communicate with me stems from the simple fact that I trust him…[Appel’s] interest in this action is strictly financial…My interest is my career, which up until now holds the promise of my being able to significantly contribute to, and possibly influence, a generation of music. No amount of money could compensate me if I were to lose this opportunity.”
On May 28, 1977, Springsteen and Appel settled the case for undisclosed sums. This allowed Springsteen to finally work on the follow-up to Born to Run with Landau, his “producer of choice”, after a lost year. The original contracts with Appel and Laurel Canyon were rescinded, and Springsteen received an undisclosed but reportedly “handsome” royalty rate for his recordings, astronomically higher than before.
As for Appel, he reportedly received “several hundred thousand dollars” for relinquishing control over the recordings, and retained a small portion of royalties.
The producer may have rubbed colleagues the wrong way and exploited Springsteen financially, and he deserved to ultimately give up the control he had deviously gained for himself. But he is still the man who discovered The Boss, and he saw a star in Springsteen when he was unknown. Springsteen may have gotten himself in trouble at first, but he got what he was seeking.
“What Springsteen wanted, to the exclusion of almost everything else, was to make a great rock & roll record – and to find someone who believed in him without reservation,” Rolling Stone summed up in 1977. “Appel was his man.”