Of Angels and Teddy Bears
THE RULES, REGULATIONS AND POLICIES OF MOTOWN’S MONEY MEN
Harold and Sidney who?
By now, most of Berry Gordy’s principal players in the business of Motown have been identified and profiled in the history books. At the very least, the names of Esther Edwards, Barney Ales, Ralph Seltzer, Ewart Abner, Michael Roshkind and Jay Lasker are familiar to you.
The same goes for those who ran the firm’s creative departments at one time or another, including Mickey Stevenson, the Holland brothers, Harry Balk and Suzanne de Passe in A&R; Billie Jean Brown in Quality Control; and Janie Bradford at Jobete Music. Not to mention other key individuals, such as Mike McLean, Beans Bowles, Loucye Wakefield, Harvey Fuqua and Maxine Powell.
Good news from the accountants, Mr. Gordy?
But the Noveck brothers? Sidney, the accountant, and Harold, the tax attorney, were influential in shaping the financial structure of Motown. Berry Gordy trusted them as much as anyone else – if not more than anyone else – to validate and sustain the company’s fiscal health under his ownership.
In To Be Loved, Gordy wrote that the brothers “had watched over me and my money like careful parents for more than 25 years.” Later, he told Vanity Fair, “Anytime we got in any trouble, we didn’t worry about anything, because [the Novecks] would spend a thousand dollars to find a penny. The books had to balance, all the time.”
When Gordy considered taking Motown to the stock market, the Novecks dissuaded him. “Berry and I had talked about going public,” Barney Ales once told me, “because I wanted us to buy Cameo-Parkway Records and put everything – their distributors, their music publishing – together. Berry was all for it until he spoke to Harold, who told him, ‘Once you go public, you have to open up all your books.’ ” Motown stayed in private hands.
On the advice of the Novecks, Gordy operated his company as a subchapter S (for “small”) Corporation. This reduced corporate taxation for small and family-owned businesses, but set limits on the number of shareholders, required a single class of stock, and restricted who could own shares.
LOWER TAX RATES
The Motown founder possessed virtually all of the stock, with single-figure percentages held – from when is not clear – by Esther Edwards and Smokey Robinson. Under S Corporation rules, business income flowed through to the shareholders, who paid tax at individual rates, which were lower than corporate rates. If a company lost money in any one year – a fate which befell Motown Records in the late 1970s and into the ’80s – stockholders had to replenish it from their own funds. This was the structure endorsed and recommended by the Novecks, although for Motown employees, it meant they lacked the corporate benefits which they could have earned elsewhere.
From To Be Loved: the search begins…
Gordy has said he was introduced to Harold Noveck circa 1961 by Detroit attorney Sue Weisenfeld, whose signature appears on Stevie Wonder’s first artist management contract with Berry Gordy Jr. Enterprises, inked that year. Soon afterwards, he brought certified public accountant Sidney into the fold. (The brothers always served as consultants; they never joined Motown on staff.) “Throughout the years,” Gordy noted in his autobiography, “whoever ran my in-house Finance Department was subject to Sidney’s and Harold’s rules, regulations and policies.”
About the Novecks’ personal and professional background, little has been written, although WGB reader Callista Gould has confirmed that they came from Atlanta (their parents were immigrants from Russia) and moved to Detroit in the early 1940s. Sidney, born in 1922 and the younger of the pair, was described in To Be Loved as “a sweet little man.” Gordy’s second wife, Raynoma, was less complimentary. “Bald-headed and pudgy,” she called them, adding that they were “the definitive ‘no’ men.” Harold, born in 1917, was “very Jewish,” according to Barney Ales, “because he was Orthodox, but he didn’t make a big point out of things like that.” Shelly Berger, one of Motown’s senior West Coast figures, used to refer to the Novecks as the Malach Hamovis. “That’s Yiddish for the Angels of Death,” he told Vanity Fair. “They were very, very conservative.”
A rare glimpse into the Novecks’ Motown relationships came when Evelyn Noveck gave a couple of media interviews after the Broadway opening in 2013 of Motown The Musical, in which her late husband, Harold, was briefly portrayed. Talking about Gordy’s Boston Boulevard mansion in Detroit when he threw parties there, she said, “It was beautiful, and Berry made everyone feel welcome. He made us feel like we were his family.”
DIANA’S ‘FAVOURITE MAN’
Noveck recalled one occasion when Diana Ross arrived late. “Diana was an extremely attractive woman who always dressed modestly at the parties.” She added that Ross was humble, even though she knew she was a huge star. “Diana often said my husband was her ‘favourite man.’ I always had good vibes about her.” Noveck also remembered being a guest when Gordy married his third wife on a waterfront estate in Santa Barbara. “It was a fairy tale wedding – so beautiful. I’m glad he gave up getting married again after the third time.”
Evelyn Noveck also observed that, after Motown moved to California, Harold (and, presumably, Sidney) would travel once a month from Detroit to Los Angeles to work on company business. When her husband was back in Michigan, “Berry and Harold would talk on the phone until well past midnight. Berry seemed to forget about the West Coast time difference.”
Advice from the Novecks? (OK, it’s from Motownopoly)
In 1986, that business included the company’s prospective sale to MCA, whose record division handled Motown’s U.S. distribution. Harold Noveck was among those at a lunch meeting organised by Gordy with senior MCA executives, on the day before Thanksgiving, to discuss a deal. Jay Lasker, then president of Motown Records, remembered lead negotiator Noveck proposing a $70 million purchase price. By December’s end, however, Gordy had changed his mind, evidently unwilling to lose what he had spent a lifetime to build. (Less than two years later, of course, Motown Records was sold to MCA.) For his part, Lasker speculated that advice from the Novecks about Gordy’s tax liabilities played a significant part in the transaction’s termination in ’86.
As a rule, Gordy heeded his financial advisors, but the firm’s S Corporation status left something to be desired. “It was a problem as far as I was concerned,” said Barney Ales. “That’s why we never had pensions or things set up for the important people within the company, which I wanted to do through the Novecks. But they said, ‘No, it’s better for Berry to be an S Corporation.’ And I didn’t know anybody who had a piece of it until maybe they went to California.” It’s arguable that by keeping this focus on Gordy’s interests, rather than on building the business or attending to the welfare of the people who worked there, the Novecks were short-sighted, particularly in the 1980s. Ultimately, though, the responsibility for the company’s direction and operating environment lay with its creator.
The detail, and the truth, of Motown’s financial structure is unlikely ever to be revealed, and any secrets went to the graves of the brothers who helped to design it (Sidney Noveck died in Michigan in April 1998, Harold two months later.) Evelyn Noveck’s memories of her husband’s client were of a more personal nature. “Berry sent Christmas gifts each year to everyone ever associated with Motown, and the gifts always had teddy bears included,” she told Hometown Life. “I still have three of the teddy bears.”
So now you know: Harold and Sidney Noveck – money managers, cash custodians, tax guardians. Angels or devils? You decide.
Music notes: what better playlist to accompany Harold and Sidney Noveck’s exploits than one featuring “Money (That’s What I Want)”? Since Barrett Strong’s original Tamla recording, the song has been a steady, substantial earner for Jobete Music over the decades, including the Beatles’ interpretation. There have been more than 100 other versions, and the eight chosen for this playlist, ranging from 1960 to 2012, reflect a considerable variety in styles. Aside from Barrett, my own favourite is by James Blood Ulmer. Enjoy.