The Beatles' agreement with Parlophone expired according to its terms on June 3, 1966. It was not until January 26, 1967 that a new agreement was concluded, this one for a period of nine years. [Masters recorded between June 3, 1966 and January 26, 1967 were accommodated by a series of letter agreements.] Capitol continued to derive its rights to manufacture and distribute in the U.S. under the MEA (though the internal royalties override that EMI received for licensing the Beatles masters to Capitol was reduced from 5% of the retail price to 2.2% of the retail price, payable on 90% of sales, less a fixed packaging fee; there also were several other technical nuances).
Royalties payable to the Beatles for new material were substantially increased. The 1967 agreement later became the source of considerable confusion because instead of being payable on â€œretailâ€ price the royalty became payable on a â€œwholesaleâ€ price, which was incompletely defined. This probably was due to a misapprehension by Alan Livingston, then Capitol's President. Livingston had negotiated separate terms for the U.S., Canada and Mexico and most likely got them confused because the sales base for each territory was expressed differently.