45 Years Ago: The Lawsuits That Derailed Grand Funk Railroad
Grand Funk Railroad began 1972 as one of rock ‘n’ roll’s most successful bands. But by March, the popular power trio found itself stuck in a legal quagmire.
Guitarist and singer Mark Farner, drummer Don Brewer and bassist Mel Schacher started 1969 as unknown musician in Flint, Mich., and, by the end of 1971, they had released six albums that incredibly had all gone gold – without the benefit of a hit song.
Grand Funk Railroad came into being when Brewer and Farner, both struggling to make it as musicians, contacted Terry Knight, the former frontman of their old band the Pack. They were at such a desperate point that they agreed to sign with Knight as their “manager, producer, press spokesman and musical mentor,” even though Farner thought Knight was a chameleon and a con man.
To round out the power trio, they brought aboard Schacher, an old friend of Farner’s. Knight initially had little luck interesting record labels in Grand Funk. He did manage to score them the opening slot at the Atlanta International Pop Festival on July 4, 1969, which led to the band getting a deal with Capitol Records. The Capitol deal, in fact, was with Knight’s production company, which Grand Funk was signed to. This arrangement would become more significant later on.
Once described as someone who “fancied himself as the Colonel Tom Parker of the '70s,” Knight took a very hands-on approach with Grand Funk Railroad, whom he named after Michigan's Grand Trunk Western Railroad. Knight produced their albums, helped write the songs and even designed the album covers. He kept Farner, Brewer and Schacher away from the press and handled the interviews himself. Unlike most managers, Knight didn’t try to befriend rock critics. In fact, he seemed to revel in antagonizing them and he used the negative-to-vicious reviews (Rolling Stone called them the “worst band in the world") to promote Grand Funk as a the “people’s band.”
The onetime singer also was not shy about attention-grabbing publicity stunts. His most audacious one was having a 60-foot Times Square billboard advertising Grand Funk’s 1970 Closer to Home album that cost an estimated $100,000. The stunt unexpectedly benefited from a New York City workers strike that caused the billboard to stay up several months after it should have been taken down.
Nearly two years to the day from their Atlanta debut, Grand Funk Railroad became the first band since the Beatles to play Shea Stadium -- and they sold out Shea in 72 hours, faster than the Beatles did. This crowning achievement, however, also started the cracks that soon derailed Grand Funk Railroad’s meteoric rise to super-stardom. As rock critic Robert Christgau wrote at the time, “it was the end of the beginning and the beginning of the end.”
Knight, however, still saw Grand Funk Railroad as his gravy train as 1971 ended. The band’s sixth album, E Pluribus Funk, released that November, reached No. 5 on the Billboard chart, and Grand Funk had sold more than 20 million records in less than three years.
In early 1972, Knight met with the band to share his idea to top the Shea Stadium success: a five-night stand at Madison Square Garden. Although Farner, Brewer and Schacher dutifully signed the paperwork for the concerts, they were starting to question Knight’s autocratic control. They griped about their touring and complained about his producing skills and songs he wouldn’t let them record.
Their biggest beef involved money. In early March, the band had found out that Knight, through his production deal with Capitol, was getting 16 percent of the album profits while they were receiving only 6 percent. Knight also had his cut as their manager, as well as a share in the song royalties and had 21 percent of GFR Enterprises, the corporation Knight created to handle Grand Funk Railroad’s business. This didn’t sit right with the trio. They were generating a lot of money but getting only a couple hundred dollars in a weekly stipend from GFR. As Brewer explained to Rolling Stone in 1972, “We wanted to hear what was happening with the money and Terry didn’t give us the right answers. He gave us the runaround.”
Knight, meanwhile, believed the guys simply “began to believe their own press.” He told his side to Rolling Stone, explaining that Farner, Brewer and Schacher could have been more involved in their financials and the making their albums, but “they had a Lear jet sitting at the airport the night the E Pluribus Funk album was finished.”
Feeling uneasy about Knight, Brewer contacted John Eastman, a respected music business lawyer who also had helped his brother-in-law Paul McCartney go solo from the Beatles. Knight was shocked when he discovered that the group had fired him as manager and backed out of the Madison Square Garden concerts.
That’s when the writs hit the band. On March 21, 1972, Knight filed a lawsuit against Eastman, alleging interfered with Knight’s contractual arrangement with Grand Funk. A week later, Knight sued the band for fraud and breach of contract, with his suits adding up to approximately $57 million. Knight later proclaimed on Behind the Music that “if they’d have waited three months, they would have been out of the contract.”
Grand Funk countered with their own $8 million lawsuit against Knight, charging him with defrauding them and misuse of their money. Knight would continue to file suits – one accused the band of trademark infringement and another charged Capitol Records with royalty illegalities. He sued retailers and concert venues that were dealing with Grand Funk. Two sides also played out their cases in the press, taking out ads to state their side of the lawsuits.
Knight’s most notorious move came on Dec. 23, 1972. Grand Funk were scheduled to perform a benefit concert at Madison Square Garden (where Knight had planned to have the band play a series of shows earlier in 1972). Knight arrived before the concert, with sheriff deputies and a court order authorizing the confiscation of the band’s equipment as part of what Knight alleged the band owed him. Fearing a cancellation would cause a riot, a compromise was reached with Knight taking the group’s gear after the show.
The legal battle of the bands eventually resolved in February 1974 with a settlement reached in the 30-plus lawsuits. The band got to keep its full name, Grand Funk Railroad, while Knight got a load of money, publishing rights and the group’s investments. Both Brewer and Farner stated in Behind the Music that they settled because the band wouldn’t have survived if a court fight lasted longer. For his part, Knight proclaimed that he didn’t mind wearing the black hat “as long as I can wear the black hat to the bank.”
Despite the lawsuits’ emotional and financial strain, Grand Funk ironically achieved their greatest popular success after they separated from Knight. The band, which had re-signed with Capitol in 1972, released their signature song “We’re an American Band” in 1973. The song hit No. 1 and their Todd Rundgren-produced album was their highest charter at No. 2. Their next album, Shinin’ On (also produced by Rundgren) spawned another No. 1 hit, a cover of the old Little Eva tune, “The Locomotion.” Another cover, “Some Kind of Wonderful,” reached No. 3 in 1974. But that year's LP, All The Girls in the World Beware!!!, was their last gold album.
While Knight might have won the legal battle, he lost the war. The other band he managed, Bloodrock, also left him in 1972. He was dropped by Capitol, and Brown Bag Records, the label he started in 1972, closed shop by 1974, and Knight basically left show business soon after that. In 2004, Knight was stabbed to death while trying to protect his daughter from her boyfriend.
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