In front of a packed auditorium at the By:Larm Music Festival, Peter Hook, co-founder of both Joy Division and New Order, is holding forth. He’s just released a book on one of most infamous money pits in the history of music. Hooky is here to explain how not to run a nightclub. He means, of course, Manchester’s infamous Haçienda.
“Rob Gretton, our manager, and (Factory Records boss) Tony Wilson felt that there was nowhere in Manchester for people like us to go and we should put it right. They came to us with a budget of £40,000 ($65,000) split between us and Factory, which escalated to £350,000 ($560,000).”
And that was just the beginning. While lots of money eventually came through the doors, no one kept track of operating costs. Even at the peak of the acid rave days of ’87-’88, the club lost $16,000 a month.
“We didn’t find out until the taxman came by. We told the girl at reception ‘When he comes, give him these books (the ‘legal’ ones), not those books.’ Guess which ones she gave him?”
This triggered a full-scale spelunking of the Haçienda’s accounting methods. “The taxman must have thought all his Christmases had come at once. Not only did he investigate us individually, he investigated Factory, the Haçienda, New Order and Joy Division.”
T-shirts were a problem. Incredibly, Joy Division never issued official t-shirts. Tax Man didn’t believe that, so he fined them for not reporting tax on the sale of t-shirts they never made or sold. And as a final bizarre touch, the audit ended with tax officials queuing up to have their New Order records autographed.
“We got the record tax fine for a group in England: £875,000 ($1.4 million). It took us ten years to pay it off. Thanks to the Haçienda, Joy Division and New Order did not earn any money. But Tony Wilson did say we should thank the tax man because we wouldn’t write such great music if we weren’t so f—ing miserable.”
In addition to plugging Haçienda: How Not to Run a Nightclub and preparing a new book on Joy Division, Hooky has a new band called Freebass.
Oh, and he’s back in Manchester where he’s just opened a new nightclub. Seriously.
