Apple mastermind Steve Jobs was said to generate a “reality distortion field” around himself, such that employees found themselves believing whatever he said – no matter how ridiculous it seemed afterward. The same could be said of Sex Pistols impresario Malcolm McLaren, which is why the full facts of Sex Pistols’ week-long contract with A&M Records will probably never be known.

The band signed the deal on March 9, 1977, and it was terminated on March 16, during which time they were given an advance then paid a severance settlement. Quoted figures vary but the total seems to have been around £125,000, which would be around £835,000 today – suggesting the Sex Pistols made around $160,000 a day out of the arrangement.

The roots of the controversy grew out of a previous one. On Jan. 6, Johnny Rotten and his colleagues had been dismissed by EMI in the aftermath of negative publicity surrounding their TV appearance with Reg Grundy and a later report of trouble on an airplane. In announcing the termination, the label sounded as if it had just had enough.

EMI noted that recent media reports on the Sex Pistols’ bad behavior – probably placed by McLaren – “appear to have been exaggerated,” but said label representatives were “unable to promote this group’s records internationally in view of the adverse publicity which has been generated over the last two months.”

McLaren later said he began negotiations with A&M on Jan. 5, noting that chief executive Derek Green believed the eight demos he’d heard were going to sell. A hint of trouble had already been introduced, however, before the deal was done in a London location away from the label’s office.

“I wanted to delay any clash between them and my staff as long as possible,” Green later admitted. “It came as quite a shock, when the signing took place, that Glen Matlock wasn't in the band. It had been Matlock's name all the way through negotiations, and then on the day there was Sid Vicious – an unknown quantity.”

Vicious would soon become the epitome of polite society’s horror over punk rock. But Rotten (whose real name is John Lydon) remained capable of causing trouble himself, as he illustrated by reportedly getting arrested for drug possession hours after signing to A&M. He was out on bail in time to take part in the famous publicity stunt of March 10, when the Sex Pistols signed a fake contract before Buckingham Palace, the residency of the British monarch.

Watch Sex Pistols Perform 'EMI'

McLaren had set his sights on hijacking celebrations of Queen Elizabeth II’s 25th anniversary later in the year, and A&M pressed 25,000 copies of the Sex Pistols track “God Save the Queen” in anticipation. McLaren then persuaded newspapers to report that the signing had been shut down by cops.

“This is a long-term contract for the exclusive services of the group on a worldwide basis,” label exec Tony Burfield said outside the palace. “They are providing musical tastes for the generation of today.”

Green added: “We are very pleased to have signed the group. Quite honestly, I don’t think they have done anything more outrageous that most other rock musicians have done in the past.” Perhaps prophetically, he noted: “But one thing is certain: We're not on a crash course for signing punk rock bands.”

That afternoon, A&M office staff finally met the band, and it didn’t go well. Once again reports vary, but include Rotten trying to loudly insult everyone he met and threatening to kill an exec’s friend; Steve Jones having sex with a fan in a toilet; and Vicious smashing a (presumable different) toilet, a window and bleeding everywhere as a result of his wounds. Just a day into the contract, it was doomed.

“I was in the office the day they walked in,” A&M co-founder and jazz musician Herb Alpert told Goldmine in 1980. “I’m not crazy about music that preys on the weaknesses of society. I like music that uplifts people. They were on A&M for a week … and it was longer than they deserved to stay.

“The Pistols were too demanding, too crazy, too drugged out, and as far as I’m concerned, just nonsense,” Albert added. “The Pistols were very rude to our London staff and there was a scene in our offices there. We had some money invested in them but [A&M co-founder] Jerry [Moss] and I agreed, ‘Let’s get them the fuck off. Who needs that?’”

Some newspapers took the opportunity to crow over the development as the label said: “A&M Records wishes to announce that its recording agreement with the Sex Pistols has been terminated with immediate effect.” One report claimed the crestfallen Sex Pistols offered nothing but “burps and grunts” as McLaren spoke on their behalf.

Listen to the A&M Version of Sex Pistols 'God Save the Queen'

He said they were “shell-shocked,” because the Sex Pistols hadn’t breached the terms of the deal. In any case, A&M was perfectly aware of what kind of group they were signing. “Of course, the lads celebrated,” McLaren later said of the office party. “Maybe they got a little drunk. A window got busted.”

Then McLaren went for jaw-dropping broke by adding: “Some people made accusations that there were attempts to rape some of the girls there.” Vicious responded: “Someone threw a stone from outside to bust the windows, and we wouldn't have touched the girls with a bargepole.” Lydon observed: “They’ve given us £75,000 compensation, and that can’t be bad.”

Speaking later that year, McLaren told NME that they never achieved “a fantastic rapport with A&M. I would say that a lot of people there probably don't like us. A&M is a very middle-of-the-road company, and I think they probably thought we could change their image.”

He went on to claim in the Daily Mirror that the split was triggered by a physical assault on revered British DJ “Whispering” Bob Harris, a stalwart of the musical establishment. “I was the identikit picture of everything the punk generation despised – a 30-year-old, white, middle-class son of a policeman, the long-haired, bearded, ex-hippy, stadium rock-loving, progressive rock-presenting BBC broadcaster,” Harris argued.

“One night in a club, we were confronted by half a dozen Mohican-cut drunks, faces spitting hatred and clutching broken glass,” Harris added. “Thankfully, I was pulled to safety by some roadies from Procol Harum who had popped in for a quiet drink. I escaped with cuts and bruises, but my friend got badly cut on the head and wrist stopping Sid from glassing him in the face.”

Putting changes instigated by the punk movement into perspective, Harris admitted: “I was getting a lot of abuse and felt my life was spinning out of control. For 11 years, I’d been surfing the crest of a wave but suddenly the music scene in Britain was a hostile environment for me.”

Despite McLaren’s suggestion, however, the Harris assault seems to have taken place after the A&M deal had already been terminated. “The Sex Pistols were the quickest success I ever had, but I changed my mind,” A&M’s Green admitted. “I did not want to be involved in what they did outside their music.”

The label destroyed almost all the copies of “God Save the Queen,” save for around 25 that have been seen put on sale for as much as $12,000. The Sex Pistols went on to sign with Virgin Records in May 1977 for the release of their only album, Never Mind the Bollocks.

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