40 Years Ago: Bruce Springsteen Settles 10-Month Lawsuit with Manager Mike Appel
In 1976, a young Bruce Springsteen, famous for his energy but also his off-stage reserve, stood on a courtroom table and argued that no amount of money could later compensate him for a missed opportunity to influence an entire generation of music.
It’s an argument that began — at least in the courts — on July 27, 1976, and went on for 10 months. Springsteen had filed a lawsuit against Laurel Canyon, Ltd., owned by his manager and publisher Mike Appel, who had co-produced Born to Run along with his future manager Jon Landau. Among the allegations were fraud, undue influence and breach of trust. The legal maneuvering, all parties would later learn, had far more to do with relationships than money.
It may have been hard for some to predict Springsteen’s rise with Born to Run, which hit No. 3 on the Billboard chart. Though the Jersey boy’s first two albums Greetings From Asbury Park, N.J. and The Wild, the Innocent and the E Street Shuffle were critically lauded, sales were low. He knew if he didn’t manage to move his third, Columbia Records, the label he started with and remains with to this day, would've given him the boot. The sales came through this time, making the young musician a superstar.
But with all his success, Springsteen’s bank balance was surprisingly low. The contracts he had signed with Appel just a few years earlier — desperate to make music and not particularly interested in the money or corporate rites of passage — were the problem. According to Christopher Sanford’s 1999 book Springsteen Point Blank, the Boss was retaining less than a tenth of what he earned.
“The irony is that I myself had much to do with the pitching and existence of this tent here in the corner of my personal little carnival. Mike shouldn’t have been so overreaching, but my young fears and refusal to accept responsibility for my own actions also brought much of this into being,” Springsteen wrote in his 2016 autobiography Born to Run.
A naive young Springsteen had signed away rights to his publishing and a large chunk of money to his management. Years later in the 2010 documentary that was released as part of the boxed set, The Promise: The Darkness on the Edge of Town Story, which chronicled the days leading up to his next album Darkness on the Edge of Town — he recalled, “More than rich, more than successful, more than happy, I wanted to be great.” He was, by many standards, but suddenly “rich,” or at least the greatness that wealth represented, seemed like a reasonable goal as well. Two days after he filed the suit, Appel countersued. Appel had also filed a motion to prevent Springsteen from entering the studio to record a new album with Landau, now his preferred producer and confidante. Landau's latter-day involvement as producer and advisor to Springsteen had threatened Appel's place in the pecking order, and he was defending his territory with all he had.
Springsteen couldn’t record new music, despite being on a creative apex during which he had already released three albums in as many years and sat atop the musical world, buoyed by the simultaneous cover stories on Newsweek and Time. Instead, he took the band on the road, perfecting the craft of live performance, getting some much-needed cash in his and his band's pockets and playing what would become legendary shows.
In his book, Springsteen described Appel as wanting to protect his investment following the success of Born to Run. Both of them acutely aware of how significantly Born to Run changed their circumstances, Appel carried a new set of agreements with him all through Europe as the band toured, trying to get Springsteen to sign them. But, describing himself as no longer “clueless,” Springsteen wanted to get a better understanding of the original agreements he’d blindly signed with Appel. He wanted a lawyer — and not the one Appel provided — to look them over.
After learning the terms largely favored Appel, Springsteen wrote, he met his manager in a New York City bar and told him it was a no-go. The two laughed, had a few drinks and finally, Springsteen was ready to make the deal despite the terms. In a scene reminiscent of a romance novel rather than corporate deal, Springsteen wrote, “Maybe it was just to get the whole f---ing business thing, where I was extremely uncomfortable with my ignorance, off my back. I told myself I didn’t really give a f--- about the money anyway… High on many shots of whiskey, I pressed pen to paper. I felt a hand grab mine. A voice said, ‘No, not like this.’ It was Mike’s.
“I loved Mike — I still do — and despite the recent contract revelations, I wanted us to continue to work together,” he wrote.
But each side, though claiming to want a fair and amicable agreement, was holding their ground. Even Springsteen’s mother, Adele, tried to help the two work out their issues, sending Appel a book called Business Problems of the Record Industry Workshop, according to Sanford.
“By now I knew the full extent of our early contracts, but what were they compared to us?... The music, the audience, what we’d been through, and our feelings for each other... I started, 'Mike, I know the contracts are bad but that’s alright. We can fix it, they’re just paper. We can tear ‘em up and start something new. We have X amount of dollars for five years of work. Let’s split it and move on. Just tell me how much is mine and how much is yours. I was looking for a fair and rational answer. Instead, Mike replied, 'Well… that depends,' describing a split that would be more advantageous for Springsteen only if he signed with Appel for another five years.
“At that moment, Mike’s words went beyond negotiation and became a not-too-thinly-veiled threat," Springsteen recalled. "Amongst friends, that’s not nice. We would fight, hard.”
Springsteen took to theatrics during the deposition and trial, informed by his legal team that the only way Appel would budge is if he knew there was no way their working relationship could be repaired. He eventually had to be pulled aside by the judge, who explained how his behavior could be used against him during a trial.
Listen to Springsteen's 'The Promise'
Meanwhile, Springsteen wrote more than 80 songs, ostensibly for what would become the 10-track Darkness on the Edge of Town. Many of them were released decades later on The Promise, including the title song, which is among the strongest in his catalog. But he hadn't put it on Darkness, mostly for fear it was too transparently autobiographical. Parallels were drawn between the song’s race car-driving narrator and Springsteen’s feelings about his career during the lawsuit, particularly in the final verse when he sings, “I won big once and I hit the coast / Oh but somehow I paid the big cost / Inside I felt like I was carrying the broken spirits of all the other ones who lost / When the promise is broken you go on living but it steals something from down in your soul / Like when the truth is spoken and it don’t make no difference, something in your heart turns cold,” and especially in its final line, “We were gonna take it all and throw it all away.” Where Born to Run was filled with hope and dreams of getting out, "The Promise" reflected the danger of having those dreams come true.
Ultimately, Springsteen wrote, “A settlement was reached, separation papers were drawn up and one quiet night in a dimmed midtown office building, Mike and I finalized our divorce... I would have some dealings with Mike in the future, some good, some cheesy, but once the war was over and time — a good deal of it – passed, the fondness and connection remained… We had come to cross purposes —this is the world — but I can never hate Mike; I can only love him,” he reiterated.
In the May 28, 1977 settlement, Appel gave up most of his publishing rights and his management rights for $800,000. His production cut was reduced from 6 to 2 percent. And to the surprise of some, when he started a new agency a decade later, Springsteen loaned him $175,000 to do it, according to Sanford.
“These were two people who were essentially married, who had broken down walls for each other and together,” David Benjamin, part of Springsteen’s legal team at the time, told Peter Ames Carlin for his 2012 book Bruce. “And it was a great partnership when it worked… Look, I’ve been divorced; I’ve been there. So just a important as Mike was, he was the starter marriage. Jon took Bruce to places Mike probably couldn’t. And when one of the partners falls in love with someone else, the hurt in the old marriage becomes magnified.”
But over the years, as, Springsteen alluded to, the two mended fences. In 2009, when Springsteen began playing full-album shows, he saved the last show of the tour in Buffalo for Greetings from Asbury Park, N.J. Springsteen had flown Appel in for the show and began the album segment by saying, “So tonight I’d like to dedicate this to the man who got me through the door… Mike, this is for you,” he said.
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