In order to generate the cash flow we needed to pay the bills and secure the advances from the distributors, Neil presold over seven hundred and fifty thousand units. This was an impressive amount for a major label, but for a one-month-old independent like Casablanca, with no artist roster to speak of, it was nothing short of staggering.
On November 15, 1974, the Carson album, Here’s Johnny: Magic Moments from The Tonight Show, was released.
The album bombed.
More accurately, it BOMBED. It hit the floor with a lifeless, echoing thud. An enormous (and very dead) elephant in the room that was the music industry.
The only time we would get a sales bump is when Johnny held the album up during Tonight Show broadcasts, and even then it was just a small spike. Johnny did this maybe two or three times during the entire promo campaign, and he had to be begged to do it. I was able to get a handful of my album-oriented stations to play a few cuts, but no one in radio gave it much exposure. In the throes of our love affair with the promise of Johnny Carson, it never dawned on us that audio highlights of a TV show were simply not radio friendly. The show did not translate well without Johnny’s facial expressions and those of his guests. The album quickly became the laughingstock of the industry, the joke being that we’d shipped the LP Gold and it was returned Platinum. A funny line, to be sure. Sad thing was, it wasn’t far from the truth.
This begs the question: How can you have more returns than sales? As illogical as it seems, it is possible; it has largely to do with accounting practices and your definition of “sold.” Back then, record companies would give albums—“free goods”—to their accounts instead of offering them a straight discount. When the company sold an account ten albums, for instance, it might include two free albums in the order, so about 20 percent of the records sold went out as free goods. By way of illustration, in the production agreement we’d signed with Bill Aucoin’s company, Rock Steady, it was specifically stated that we would give 20 percent of KISS’s albums and 30 percent of their singles away as free promo product. We didn’t do this with every transaction, only when we were trying to move quantity or position a product to make it more appealing for the retailers and distributors to purchase larger quantities. This practice allowed record companies to promote their albums through free product without having to pay artist royalties (which also generated no money for the labels). Almost all artist contracts stipulated that no royalties would be paid on free goods. If a label had simply given a big discount on an album, the sale would still count, and royalties would have to be paid.
One major problem with this system was that the 100 percent return policy offered in the business at the time made it impossible track the free goods given to any one distributor over the course of a product’s life. If an account paid us for ten albums and received two more for free, it could technically return all twelve for a full refund because the two free ones hadn’t been tracked. That’s why when we “sold” seven hundred and fifty thousand albums, we were opening ourselves up to nearly a million returns.
Before the returns began flooding in, The Tonight Show album did receive Gold status from the Recording Industry Association of America (RIAA), which in lieu of actual financial success provided us with the opportunity to blow our own horn. But this was a hollow victory. We made hundreds of framed Gold records and sent them to the distributors and retail buyers in the hope that this would keep the product out there a little longer. Gold status was a bit of a sham. At the time, the primary requirement to achieve this status was shipping (not selling) half a million copies. The actual number of albums sold to consumers was not taken into consideration, as there was no one to track that. Eventually, Sound-Scan (the method Billboard currently uses to monitor sales to the end consumer) was created, and it gave subscribers access to everyone’s exact running sales totals. If we’d had to take back the entire lot of unsold Carson product immediately, it would have been even more of a disaster than it already was.
All of us knew it was a bomb, but we could not let anyone know that we felt that way. Neil, Dick Sherman, and I all fought with the distributors and accounts to keep the Carson albums on the shelves. We refused to take them back until a distributor was threatening to walk. We had to keep the album out of the return cycle as long as possible. We would get no money from the distributors for new product as long as all of this old product—namely, the Carson album—was coming back, so it was imperative that we support the perception that the album still had some life left in it. We knew that it didn’t, but that was no reason not to extend the product as long as we could. Failing to do so would have spelled the end of Casablanca, as we would have been forced to file for bankruptcy if we’d had to credit all our distributors at once.
It’s funny what you’ll tell people when the very existence of your company hangs in the balance. We made up all sorts of stories about new and grandiose advertising campaigns that were coming down the pike. “Oh, we’ve got this whole series of radio promotions,” I’d shout, “where the winners are going to be flown to LA to be in The Tonight Show audience. And be sure to watch the show tonight, because Johnny is going to be talking about the album a lot.” If that didn’t work, I’d offer them in-store advertising credit—I’d give them a discount on the album if they placed it in a high-profile spot in their record stores. I didn’t believe a single word that was coming out of my mouth, but I had to say these things anyway. If I had to tell a distributor that God himself was going to come to his house and wash his Buick for him once a week if he moved twenty-five hundred copies, then that’s what I told him. Casablanca’s existence depended upon us telling these distributors literally anything to get them to believe the album still had legs.
The end of Casablanca seemed so close at hand that I was already considering what I would do when I moved back to New York. But as time passed, the Carson album took on an interesting role in Casablanca’s history: it nearly killed us, but it also saved us. Due to oddities in the way the RIAA awarded it Gold status and the fact that we kept it on the shelves for as long as we did, the album gradually generated enough money and prestige to keep us afloat.
Our first major release after leaving Warner Brothers, and we’d fallen flat on our faces. The name Casablanca was beginning to feel particularly apt: we were alone in the barren sand dunes of Morocco, and there was no oasis in sight.
9 The Germans Are Coming!
Help arrives—The first subsidiary—Payroll service in
Vegas—Lenny and Buddy—Neil’s coup d’état—Sponsorship
with Gibson—Dressed to Kill—The big Beacon gamble—
Menage à trois
November 1974
Casablanca Records Offices
1112 North Sherbourne Drive
Los Angeles, California
The oasis appeared on our horizon in the form of Trudy Meisel. Trudy was a slim, very professional-looking woman, who—with her husband, Peter—had had some success in Germany with experimental mood music along the lines of Tangerine Dream. She came to our offices on Sherbourne one day to meet with Neil, Cecil, Buck, and me, and she explained that she was representing Giorgio Moroder, an Italian-born musician. Moroder had established a small but loyal following in Germany through a string of releases. On some of these, he was the artist; on others, which were by a collection of now largely unknown artists, he’d served as producer. He was especially strong in the then-burgeoning field of experimental electronic music, and he would go on to become a pioneer in the disco and new wave movements. Trudy had already inked deals for Moroder in Germany, France, and the UK, but she was looking for a partner in the US. The five of us sat in Neil’s office and listened to portions of the three Moroder projects that Trudy had brought with her: two electronic rock albums named Schloss and Einzelgänger (“Castle” and “Lone Wolf”); and a record by a dance artist named Donna Summer. We liked all three projects, which was a shame, because we couldn’t afford any of them.
Trudy departed without
a deal, leaving us to spend the rest of the afternoon listening to Giorgio’s projects over and over and over again. We tried to convince ourselves that we liked them enough to figure out a way to make the deal work. By the next morning, Neil had hit upon a solution: we would offer Giorgio his own US label, and he would give us the three albums at no upfront cost. Neil contacted Trudy and asked her to come back to the office that day. We pitched the idea to her and she liked it. She called Giorgio directly from Neil’s phone and explained the offer. In a matter of moments, we had a handshake deal. The details were finalized in short order—it took no more than two weeks—and Casablanca had its first subsidiary label. Moroder’s one request was that his new US label have the same name as the small label he had started in Germany. That name was Oasis. A company called Casablanca with a subsidiary named Oasis? You had to love the karma.
So we had our first subsidiary label, and the only expense we would incur was the small cost of developing the artwork. The downside was that the label had no established acts. The two electronic albums didn’t even feature an artist—they were nothing more than experimental studio projects done largely by Moroder himself. Even Donna Summer’s album was unimpressive—just a few rough tracks of Donna singing Giorgio-penned-and-produced songs. Frankly, she was nothing more than a well-trained session musician.
The Moroder signing would become one of the most important moments in Casablanca’s history, but we didn’t know that yet. We were still a new label with a limited roster, a colossal bust that was the joke of the industry, and, most importantly, no money. Our financial liquidity was awful. One Monday morning, Neil, who was looking unusually downcast, walked into my office, sat in a rattan chair, and said, “Larry, we need ten thousand dollars to make payroll for the week. We’re out of money, and I’m out of ideas.” This was the guy who could walk through the eye of a hurricane saying, “How about that wind at our backs!” I wasn’t surprised that we were out of money, but to hear Neil say it out loud was sobering. “My dad has some money,” I said. “I’m sure he’d offer the cash if I asked.” Neil rejected the idea immediately: “No way. I like Uncle Oscar a ton, and I am not going to put him in that position.” Neil felt weird accepting money from my father for something he was not sure would be successful. He had no idea when the money would be paid back, if ever. Casablanca could fold at any second.
Neil tried various money sources, but he found no takers. On Thursday of that week, he ducked into my office, said “I’m going to Vegas,” and disappeared. I assumed he was going to gamble at the casinos to try to win enough to cover payroll. I was only partly correct. Unbeknownst to me, he had a line of credit at one (or more) of the casinos. He cashed in the line and flew back to LA on Friday to pay our salaries.
Cashing in a line of credit sounds like a simple financial move, and it was. But it was also a big gamble, because in the 1970s Las Vegas was still largely a Mob-run town. The casinos would not become comparatively clean corporate entities until the late 1980s. Neil was able to pay back his line of credit before anyone knew what he’d done. When I asked why he hadn’t gone through Arnold Feldman’s contacts and borrowed directly from the Mob, he told me that once you’d dealt with the Mafia on that level, you would never get rid of them.
• October 30, 1974: Muhammad Ali knocks out George Foreman in “The Rumble in the Jungle” to regain the heavyweight crown.
• November 13, 1974: Ronald DeFeo kills six members of his family in their home in Amityville, New York. The victims’ ghosts would allegedly force the Lutz family from the same house a year later. These events would inspire a book and a movie, both titled The Amityville Horror.
• December 30, 1974: After years of wrestling with lawyers, The Beatles legally disband.
Despite our tenuous financial situation, Neil drove us forward, pushing us to look for new acts and new deals. In a move born mostly out of frugality, we bought the rights to Lenny Bruce’s What I Was Arrested For, a landmark comedy album that had been released in 1969 by Douglas Records, a company Neil knew from our Buddah days. On its release, the album had had minimal exposure, and the deal to rerelease it was incredibly cheap. Bruce’s name, despite the fact that he’d been dead since 1966, still had cachet in the marketplace, and the album, which came out in February 1975, was a decent seller for us.
Two other acts that we’d added to our roster by fall 1974 were Buddy Miles (famous for his stint in Jimi Hendrix’s Band of Gypsies project) and Peter Noone, of Herman’s Hermits (“I’m Henry the Eighth, I Am,” “Mrs. Brown, You’ve Got a Lovely Daughter,” and other 1960s pop hits). Peter and Neil had met when Neil was a singer, and they’d spent some time traveling together doing rock road shows. Peter was a gem. His fame as a major English influence on popular music in the 1960s had not gone to his head at all. Unfortunately, we could do nothing for his music career, mainly because we were just trying to survive. And, with almost all our eggs in the KISS basket, we had little time for other artists, especially one who was no longer considered hip and cool. Peter had the name recognition, but the music he was recording in the mid-1970s just wasn’t what radio or consumers were looking for. We released a single or two, but we never even thought about a full LP for Peter.
When the Buddy Miles album was being recorded, we didn’t have enough money to pay Buddy much of an advance, but he needed cash to rent a place to live. Out of kindness, Neil put Buddy up at his rented Beverly Hills mansion. Neil and Buddy seemed to get along really well, and for a little while they were fast friends. When we were finally able to pay Buddy some money, he found his own place. But soon afterwards his drug problem reared its ugly head. We would find him passed out on the floor of the office, and his music began to suffer. His behavior got so bad that Neil hired a security guard just to keep him out of the office. Years later, we ran into Buddy at a Parliament show at the LA Forum, and he threatened outright to kill Neil, throwing a knife at Neil before security hauled him away.
KISS was still our key act, even though we’d had no breakthrough success with them. I was continuing to work the band through my radio contacts, but I was becoming frustrated. Any success I had was intermittent. All of us—me, Neil, everyone at Casablanca, Bill Aucoin, and certainly KISS themselves—knew that they should be superstars. Their look, their energy, their spectacular performances just were too good to fail, but where were the sales? Why weren’t promoters lining up to book them in the big venues? This should be an easy sell, dammit. Why wasn’t it working?
To their credit, KISS never stopped moving forward. To hell with poor sales and indifferent concert promoters, they weren’t quitting. They’d spent most of 1974 touring with almost no break at all. I would go on the road with them for a few days at a time, acting as an advance man of sorts, lining up promotion, schmoozing with my radio contacts and any other local media that would talk with me. These trips were never very long. While I didn’t have to deal with the rigors of performing or sleep on tour buses, I was still exhausted after just a few days of touring. KISS had done this for months on end, and they showed no signs of fatigue. The band seemed to feed off the grueling lifestyle rather than letting it feed off them.
Their commitment inspired everyone at the label, helping to ease our frustration with the band’s lack of album sales and radio airplay. If this band was willing to tour nonstop to help promote themselves and their albums, which would put money in our pockets eventually, how could we not want to work just as hard for them?
By the end of January 1975, KISS’s second album, Hotter Than Hell, had slid off the charts, and Neil was itching for them to get back into the studio to do another. However, before recording could begin, a more pressing problem came to a boil. With the split from Warner and the debacle of the Carson album draining our bank accounts, we had yet to pay the band any royalties on their albums. And not just for that sales period—ever. Bill Aucoin and KISS were not pleased with us, and we didn’t blame them. KISS’s producers, Kenny Kerner and Richie Wise, as well as Bill an
d Joyce (who was still comanaging the band at that point), held a meeting to discuss their options. Kerner and Wise allegedly suggested moving KISS to another label. No sooner had the meeting ended than Joyce, in her clearly conflicted position as Neil’s girlfriend, blabbed all the details to Neil.
I was not privy to any of these discussions, but at this point, Neil attempted to convince KISS to part ways with Bill. KISS held firm. They were loyal to Aucoin to a fault. Based on the insight into the KISS camp’s mindset he’d gained through Joyce, Neil may have suspected that Casablanca would have an easier time breaking KISS as a best-selling act if Aucoin was out of the picture. I speculate that had he succeeded in his efforts, he would have handed management duties directly to Joyce, whose copartnership with Aucoin was about to end.
And Party Every Day: The Inside Story of Casablanca Records Page 12