Thursday, February 7, 2013

Album Economics: Round Records 1974-76

Robert Hunter's Tales Of The Great Rum Runners, the first album released on Round Records (RX-101) in June 1974
Round Records was the record company formed by Jerry Garcia and Ron Rakow to release solo albums and other material by Garcia, other members of the Dead and other musicians. The venture was an adjunct to Grateful Dead Records, which had been born once the Dead became free of their Warner Brothers contract in March, 1973. Per the legend, certain members of the Grateful Dead were uncomfortable with the risk associated with expanding the record company, so Garcia took on that risk himself. The label released ten fascinating albums in its two year existence, finally folding in early 1976.

Since Ron Rakow was a partner in Round Records, and Rakow ultimately absconded with a few hundred thousand dollars of the Grateful Dead's money in 1976, no one wanted to talk about Round afterwards. What has made the historical record confusing, however, was that no one had really wanted to talk about Round Records even while it existed. Back in '75, many rock artists had their own record labels, and although Round was a very different animal, it didn't seem that way at the time.

The public face of Round was of course Jerry Garcia, but in those days, journalists were still busily asking Garcia about LSD and Woodstock. There might have been a few generic questions about Round, but the ever-engaging Garcia simply answered the questions he was asked, and the conversation would spin far away from his own record company (Rakow did give an interview about Round to Record World, accessible on the indispensable Grateful Dead Sources blog, but it was more about the mechanics of distribution).

What happened with and to Round Records? More importantly, what was supposed to happen? To the extent we know what happened to the label, it was sunk with the financial morass that finally squeezed out Grateful Dead Records. In the end, Round released ten albums, but many of them were released quite some time after they were recorded. This post will attempt to unravel some of the financial underpinnings of Round Records. Once the cobwebs have been removed and the framework becomes visible, we will get some picture of what Garcia may have had in mind for Round. As in many other ventures, Garcia and the Grateful Dead had very imaginative ideas, but once again seem to have fired up the locomotive before the railroad tracks were finished.

Looking backwards, however, the timeline for Round Records releases makes no sense at all, and bears little relationship to Garcia's musical efforts at the time. One reason for that may be that Round was poorly run, by a partner who was neither organized nor reliable. Of more interest to me than Ron Rakow's business practices, however, is an analysis of what music Jerry Garcia was interested in making outside the Grateful Dead from 1973 to 1975, and how Garcia may have seen Round as fulfilling those ends. Without suggesting a narrative for Garcia' side projects, the history of Round Records would make no sense whatsoever.

A Round Approach
The evidence of Round Records' birth and passing is maddeningly non-specific. Given the lack of direct evidence, I have tried to analyze Round Records as an institution, rather than focusing too much on the particular actions of individuals, which may remain forever unknown. My institutional analysis points towards some interesting conclusions:
  • Round Records was conceived as an independent record company that would release a wide variety of material, much of it not likely to be popular
  • Round would be a platform for experimental  or unheard music
  • Most of Round's projects were to be recorded in-house, at either Mickey Hart's ranch studio (The Barn), or Bob Weir's garage studio (Ace's).
  • Inept business practices insured that the Round venture floundered, and almost everything released on the label was well out of date by the time it came out
  • Almost everybody involved with Round was unhappy with the music and the finances, and thus only talks about Round in an indirect way
To explain my conclusions, I will present the following:
  • A brief overview of the beginning of Round Records
  • An institutional analysis of the likely explanation for Jerry Garcia Round album Garcia inexplicably having the same name as the previous Garcia solo album on Warners
  • A timeline of the Grateful Dead finances in conjunction with Round releases
The Birth Of Round Records
The Grateful Dead informed Warner Brothers that they would not be renewing their contract, nor signing with anyone else, in the Fall of 1972. This was unprecedented for a rock band. Because of contractual obligations, they would not be free of Warners until March 1973 and the release of Bear's Choice. Perhaps Warners or another company thought they could talk the Dead out of independence--the record companies certainly tried--but the Dead stuck to their quixotic plan. The resulting entity was called Grateful Dead Records, financed by a large loan from the First National Bank Of Boston, organized by the always ambiguous Ron Rakow, who had been in and out of the Grateful Dead's finances since about 1966.

The first public corporate mark of Grateful Dead Records was in fact a notation on the liner notes for the Garcia/Saunders album Live At Keystone. That album was released in January 1974, some months after Wake Of The Flood, the initial GDR release. However, the Keystone album was recorded before Wake, in July, 1973, so when Garcia was listed as "Courtesy Of Grateful Dead Records," it was a corporate indicator of Garcia's primary affiliation. The album was released on Saunders' label, Fantasy Records. There is reason to assume that Fantasy may have hoped that even if the Dead were going it alone, Garcia might have been available to record as a solo artist. Fantasy was used to working with jazz artists on a project by project basis, so there might have been some synergy there, but this is only speculation. In any case, Garcia seems to have had bigger plans.

Wake Of The Flood was recorded in August, 1973 and released in October. Despite some difficulties getting paid by distributors and some counterfeit pressings that cut into sales, the album was pretty successful. McNally said that it sold about 400,000 copies, a healthy number for those days. Since the Dead weren't sharing profits with a parent record company, the money for Wake was still pretty good. The band's concert receipts had improved as well. By Grateful Dead standards, the group was fairly flush with money at the beginning of 1974.

McNally describes the formation of Round Records as fraught with conflicts of interest (p.452). The Dead's lawyer, Hal Kant, objected that Grateful Dead finances shouldn't have been co-mingled with a solo project, and Garcia blew up, so Kant was replaced as Round's lawyer by Rakow's personal attorney. McNally does not put a precise timeline on the formation of Round, but it seems to be sometime after the formation of Grateful Dead Records. By the beginning of 1974, despite or perhaps because of their success, the Grateful Dead's self-contained empire was full of strife. Booking agent Sam Cutler was let go, and McNally describes a period of conflict and confusion (p.468-469).

Yet the first Round Records project, Jerry Garcia's second solo album, got under way in February 1974, with John Kahn producing. Presumably, Kahn and Garcia had already been working on the concept for some time. The solo album, mysteriously titled Garcia, just like the first one, was released in June, 1974. Even so, it was not the first Round release. That honor went to the first solo album by the hitherto ghost-like Robert Hunter, Tales Of The Great Rum Runners. Both albums were released somewhat simultaneously in June, 1974. Yet, then as now, no one can give a plausible explanation for why Garcia's solo album used the same name as his 1972 release for Warners. Garcia II would have made some marketing sense--but just calling it Garcia, like the first one? The silence accompanying this choice shouts dysfunction, and that dysfunction appears to be at the center of the Round universe.

Seastones, by Ned Lagin, credited to Ned Lagin and Phil Lesh (Round RX-106), released March 1975
What Might Have Been The Plan?
Round Records was formed in late 1973, as a vehicle encouraged by Garcia for releasing projects outside of the Grateful Dead proper. Garcia and the other members of the Grateful Dead had a wide variety of projects underway: live R&B with Merl Saunders, electronic music, bluegrass, new songs from Robert Hunter and perhaps more. They also had access to their own studio, namely Mickey Hart's own facility in his barn at his Novato ranch. Thus the more esoteric projects could be recorded at a more realistic price than the high rates of professional studios like The Record Plant in Sausalito.

I think Garcia wanted to run an independent record label that released his own music and the music of his friends, whatever it happened to be. Some of it might be somewhat commercial, like the Jerry Garcia Band or Kingfish, but some of it might be outmoded country subgenres or unfathomable experiments. At the time, major record companies were good at making money on music, but they were hit machines that depended on artists who toured heavily behind popular music. Warners or Columbia had too much overhead for bluegrass or something equally obscure. A low-overhead independent label would have been a different matter.

In theory, while the Grateful Dead rode the big horse, Round Records could have made creative music cheaply at Mickey's Barn in Novato and sold a modest amount of records to Deadheads and people of discriminating taste. Without much overhead, the players would get a little money, and there would be enough left over to make the next album. All sorts of friends and allies could get a chance to make the music they wanted to, not the mandated 10-songs-per-lp-of-rockin'-hits that the industry demanded.

The idea of Round Records as a self-sustaining, independent label, run by artists for artists, would have been a great idea--if it were 1990. David Grisman's Acoustic Disc was built on that model, and it has generally been very successful. While some of Grisman's albums, particularly those with Garcia, have sold quite well, some of the releases are specialist projects recorded for a modest, discriminating audience. No matter: they were usually recorded in Grisman's (high-tech) garage, and they are sold in limited runs to those who want them, via mail-order and the internet. None of this was plausible in 1974.

Many rock artists in the early 70s had "private labels," called "imprints" by record companies: the Jefferson Airplane had Grunt (for RCA), Frank Zappa had Bizarre/Straight (Warners), ELP had Manticore (Island), and so on. Certainly, those artists got to release albums by their friends: Zappa released albums by his best friend in high school and his daughter's nanny, for example. However, the big record companies still exerted a lot of control on the imprints. Their real interest was in using the artists to find new hitmakers. All of Warners' investment in Zappa paid off when he signed and civilized some crazies from Phoenix, AZ called Alice Cooper. When Zappa left Warners, they dropped all the acts on Bizarre/Straight except Alice, and they made millions on the band. That was what they had really wanted. Warners could not have channeled Alice Cooper as they were in 1969, but Zappa could, and the payoff for Warners a few years later was huge.

I don't doubt Warners or Columbia would have (and probably did) offer Garcia his own imprint if the Dead would sign. However, Garcia was dismissive of Grunt, the Airplane's label, so I don't think he had any interest in having a corporate entity under his control. In typical fashion, Garcia seems to have chosen to go it alone, but he chose it at a time when an independent label had no way of getting distributed or paid, and any unique music they made would never be heard on the radio, rendering it permanently obscure.

A careful look backwards shows a plethora of album projects by members of the Grateful Dead, most of them recorded at Mickey Hart's Barn studio: albums by Hart himself, Old And In The Way, Roadhog, Barry Melton and Jim McPherson were all recorded there, none of which saw the light of day (some of the McPherson material was released in 2009). There were ongoing experiments with electronic music (that would become Seastones) and radio plays (the mysterious radio play "Insect Invasion"), and numerous live ensembles like Garcia/Saunders, the Great American String Band and The Good Old Boys. Yet none of this came to light during the brief tenure of Round Records, and only bits and pieces surfaced in succeeding years. It stands to reason that all the recording going on was intended, ultimately, for release, and I think that Round Records was intended to be that vehicle. 

Jerry Garcia's second solo album (RX-102), inexplicably entitled Garcia, just like his first album two years earlier
Why Call The Album "Garcia"?
Although Garcia's 1974 solo album bore the number RX-102, ceding RX-101 to Hunter's album, the Round Records enterprise would not have gotten underway without the promise of an album that would actually sell. Jerry Garcia's first solo album had been released by Warners in January, 1972. The album was titled Garcia. More so than many people, Jerry Garcia was someone often addressed by his last name, even by old friends, so it was almost like a nickname.

It was common in the 1960s and 70s for record companies to title the first solo album after the artist: Neil Young, Stephen Stills and Jackson Browne's first albums were named after themselves, for example. The naming of Garcia's first album was particularly appropriate, since he played most of the instruments (all save the drums), and sang and wrote all the songs, save of course for Hunter's lyrics. In that sense, Garcia was very much a solo album. The Grateful Dead were rising in popularity in 1972, and Garcia was quite successful (I think it went gold). Radio friendly songs like "Deal" and "Sugaree" certainly helped.

There was no fathomable motivation to name Garcia's second album the same name as his first. The naming was so unfathomable that Grateful Dead Records themselves dropped it. Promotional copies of Garcia were imprinted with a stamp that said "Compliments Of", and people started to informally call the album Compliments Of Garcia, partially just to distinguish it from the first album. Informally, the album has been called Compliments Of Garcia ever since. The Store now lists it as Compliments. It's not a bad title--but why couldn't they have thought of it before? Some artists with long, complex recording histories sometimes end up with the same or similarly titled albums, but usually they are a result of two different Live In Concert albums a decade apart. In 1974, Garcia had had only released two solo albums, but they both had the same name.

What had to happen for Garcia's first album on Round to have the same name as his only other solo album? There have to have been three culprits--poor planning, a failure to communicate and arrogance. On a business basis, Round Records was run by Jerry Garcia and Ron Rakow. Garcia was busy making music, however, so that meant that Rakow effectively ran the label. McNally quotes Dead attorney Hal Kant on Rakow's supposed professional credentials: "Rakow is supposed to be a serious businessman? He doesn't have a clue." Events seemed to have borne out Kant's assessment.

I have to assume that as Kahn and Garcia worked on the album, the name on the tape box or studio sheets was 'Garcia Project' or just 'Garcia.' In effect, I assume this was the working title for the album. A very fine Byrds album, Untitled, was called that because it was the name on the tape box, and when it came time for the release, the Byrds liked Untitled better than their planned name Phoenix. However, Untitled was a clever, ironic title, attracting attention to an excellent album.  So it's not hard to see how the solo album had a working title of Garcia, but still hard to see how it really got released with that name.

Garcia himself was never someone who liked to name things. Indeed, for all his eloquence, Garcia didn't even write lyrics. One of Robert Hunter's lesser duties, apart from lyrics, was as the designated Namer Of Things. If Garcia had had a little foresight, he would have asked Hunter to come up with a name. Hunter would have listened to the tape, and thought of something appropriate--perhaps even Compliments Of Garcia. Once Garcia had accepted Hunter's title, that would have carried the day. But what with recording Mars Hotel, touring, playing with Merl Saunders and numerous other things, Garcia seems never to have asked Hunter, nor made any other plans to name the album.

What commentary there is about Ron Rakow mostly concerns his alleged dubious business practices. Those alleged practices aside, Rakow seems to have kept his own counsel (literally, with respect to the Round attorney) and not let anyone outside of Garcia know what was planned. It would be conventional even in a small record company to ask what the title of a forthcoming album might be, but I don't think Rakow had those conversations with people. I suspect he wasn't very direct with anyone about it, actually, but at the very least if the subject had come up, almost anyone in Grateful Dead circles would have mentioned that the first album was called Garcia.However,  I don't think anyone had those kinds of conversations with Rakow, even casually.

Finally, however, the most likely explanation for the Garcia title was Ron Rakow's arrogance. Rakow, for all his big talk, probably didn't know or didn't remember that the first album was also called Garcia. Rakow had probably taken steps that committed Round to an album title of Garcia, such as printing the cover. Rakow took great pride in saying how he had found a way to print extra copies of the Wake Of The Flood album cover cheaply (and then sold the records as cut-outs, another tangential subject), so it's not far-fetched to think that Rakow had a "deal' on the covers. Rakow does not seem to be a person who would admit a mistake or listen to reason, nor would he have had any interest in spending extra money to change the album title. If you've ever worked in a place where the boss doesn't listen, all sorts of stupid decisions are confirmed merely to insure that the boss never has to admit that he has wrong.

The strange history of the Garcia album title suggests that Rakow ran Round Records as a sloppy, private kingdom where he listened to no one save Garcia. Since Garcia wasn't interested in details, that left Rakow to manage Round Records unchecked. It looks like Garcia was working on numerous projects, with the idea that Round would be the vehicle for releasing them. Yet Round only intermittently released anything, often long after the musicians had moved on.

Old And In The Way, Round Records greatest legacy, recorded in October 1973 and released in February 1975 (RX-103)
Round Records Timeline 1973-1974
A detailed look at the chronology of Round Records shows how the label was dependent on money borrowed against the Grateful Dead. When Rakow found a source of cash, a few albums popped out out of the pipeline. However, each cash infusion obligated the Dead to more pressure from either their creditors or the record company, and the cycle repeated itself. What I believe to be Garcia's inspired vision for an independent record label turned into a tool for Ron Rakow to use Garcia as a fulcrum to leverage the Grateful Dead for cash. The Wall Of Sound and the Grateful Dead movie were also a huge cash drain on the band, leaving Round begging for scraps. The history of Round releases is intimately tied to cash infusions to the Dead, each time indebting the band further. No one seems to have gotten paid for a Round release, because the label was a financial house of cards in the first place.

  • March 1973: Warner Brothers releases Bear's Choice: Grateful Dead become independent.
  • April 1973: Grateful Dead Records launched, funded by a loan from the First National Bank Of Boston and an overseas distribution deal with Atlantic Records (for $300,000).
  • April 1973: Old And In The Way (founded in March) records at Mickey Hart's Barn studio in Novato. The tapes have never surfaced
  • May 1973: Ned Lagin moves to California, and begins working on what will become Seastones at The Barn with Garcia, Hart, Phil Lesh and others
  • July 1973: Jerry Garcia records at Keystone Berkeley with Merl Saunders, for Fantasy Records
  • August 1973: Grateful Dead record Wake Of The Flood at the Record Plant
  • October 1973: Wake Of The Flood released on Grateful Dead Records
  • Summer or Fall 1973: Round Records established
  • January 1974: Live At Keystone, by Garcia/Saunder/Kahn, Vitt, released on Fantasy
  • January 1974: The Dead start making plans for The Wall Of Sound, which will ultimately eat up all their increased concert revenue
  • February 1974: John Kahn begins producing the Garcia album in Southern California
  • April 1974: The Grateful Dead begin recording Mars Hotel at CBS Studios in San Francicso
  • Spring 1974: Robert Hunter records Tales Of The Great Rum Runners at The Barn. It's possible that a Roadhog album of Hunter songs was recorded just before this
  • June 1974: Round Records releases Rum Runners and Garcia
  • June 1974: Grateful Dead Records releases Mars Hotel
  • Late 1974: Garcia pays David Grisman $1000 to make an album out of Owsley's Old And In The Way live recordings. Neither Grisman nor any other band member receive another cent from the record, and Grisman and Garcia do not speak for the next 14 years.
  • October 1974: Rakow and Garcia impulsively decide to make a movie out of the band's stand at Winterland (McNally p.478)
  • Late 1974: Grateful Dead Records is effectively bankrupt, and Rakow arranges a distribution deal with United Artists Records
Whatever the grand plans of the Dead at the beginning of the year, they collapsed under the weight of the Wall Of Sound and poor financial management. Round Records had only released two albums in June 1974, and had been silent since that time. The Dead were rescued by the UA deal, but UA in turn demanded product from the Dead. However, early 1975 saw a flurry of releases from Round. UA probably didn't care, one way or the another, but accepted the releases as a condition of signing the Dead. The implication, however, seems to have been that any Round releases after the first two were throttled by a lack of cash.

The Old And In The Way album was released 16 months after it was recorded because there was no money to release it earlier. The fact that Grisman, nor any other band member, was not paid for the record is another implicit sign of poor fiscal management by Rakow.  Lagin has complained as well that the released Seastones was just a small piece of what they were trying to accomplish musically, and he has alluded to pressure from the record company. Whether that was directly from Round or indirectly from UA, it's another clue that despite attempting to provide musical freedom, Round's artists ended up unhappy.

Keith & Donna (RX-014), released February 1975 (RX-104)
Round Records Timeline 1975-1976
  • January 1975: Jerry Garcia and Dan Healy record The Good Old Boys, with David Nelson, Frank Wakefield, Chubby Wise and Don Reno, at Mickey Hart's Barn. The Pistol Packin' Mama album will not be released for another 13 months.
  • January 1975: Work is completed on a studio above Bob Weir's garage in Mill Valley. The studio is called Ace's. Per McNally, the band Heroes are the first to record there (McNally p.482). Garcia actually played on some sessions, which were released decades later on the Bill Cutler album Crossing The Line, but I have to think that a Round release was at least contemplated.
  • February 1975: Round releases the Old And In The Way album (RX-103). With financing from the UA distribution contract, Round could release a flurry of albums
  • February 1975: The  Grateful Dead, with Mickey Hart back on board, began playing at Ace's
  • March 1975: Round releases the Keith And Donna album (RX-104)
  • March 1975: Round releases Tiger Rose, the second Hunter album (RX-105)
  • April 1975: Round releases Seastones, the Ned Lagin project (RX-106). A sticker on the album credited to Lagin and Phil Lesh, because UA wanted a member of the Grateful Dead's name on the record.
  • June 1975: Under pressure from UA to deliver product, the Dead record Blues For Allah in two weeks at Ace's
  • August-September 1975: Jerry Garcia begins recording Reflections at Ace's. There is a distinct whiff that Garcia needs to produce a salable album for UA, both to finance the Dead's operations and also the Grateful Dead movie.
  • September 1975: Blues For Allah is released on Grateful Dead Records, but with a United Artists record number. 
  • October-November 1975: Jerry Garcia records the other half of Reflections at His Masters Wheels in San Francisco, formerly Pacific High Recorders (and then Alembic Studios). He records with John Kahn, Ron Tutt and Nicky Hopkins, although Larry Knechtel is brought in to help on keyboards.
There were no Round releases between April 1975 and February 1976, when Reflections was released. The spurt of releases in early 1975 came via a cash infusion from UA. When that dried up, Round was dormant. What cash there was seems to have been absorbed by the movie, but once again Rakow's cash management can hardly be respected. Rakow made another deal with United Artists in early 1976, which provided another spurt of releases on Round. However, once Rakow wrote himself a check for  $225,000 in Spring 1976, the Dead found themselves broke and owing United Artists a Grateful Dead album. The regrettable Steal Your Face was the result.

Diga, by the Diga Rhythm Band, produced and led by Mickey Hart, the final release on Round (RX-110)
Round Records Timeline 1976
February 1976: Round/UA releases Reflections (RX-107)
March 1976: Round/UA releases Kingfish (RX-108). Weir was a member of Kingfish at the time, and the album was recorded at Ace's. Reflections and Kingfish were the sort of albums that UA would have hoped for when they financed the Grateful Dead.
March 1976: Round/UA releases Pistol Packin' Mama by The Good Old Boys (RX-109). UA cannot have been interested in this record, and it sank quickly. UA probably saw it as a rock star indulgence, like letting Frank Zappa release an album by a group that included his daughter's nanny.
May 1976: McNally details how Rakow had allowed the Dead's finances to become disastrous (pp.488-492). Rakow writes himself a huge check that bankrupts Grateful Dead Records, but Garcia refuses to insist on prosecution.
June 1976: Round/UA releases Diga, by the Diga Rhythm Band. This too was probably seen by UA as a rock star indulgence.
June 1976: Grateful Dead/UA release Steal Your Face. The whole record company experiment comes to an end. With few other options, and a movie to finance, the Grateful Dead have already returned to the road.

Looking Backwards
I will admit that I have drawn some very specific conclusions from scattered, fragmentary evidence. Nonetheless, any serious consideration of Jerry Garcia and the Grateful Dead's musical goals have to account for Round Records. There are so many things that are hard to explain: the title of Garcia's solo album, the strange, intermittent pattern of releases and the numerous unheard projects demand an explanation that hangs together as a plausible narrative. If someone can come up with a better explanation for the strange history of Round Records, I would be more than willing to try it on for size. For now, I'll have to stick with my own explanation of events.

In the early 1970s, Jerry Garcia, other members of the Grateful Dead and their fellow Marin musicians found themselves working on a wide variety of music, only some of which had any commercial potential. With Mickey Hart's studio, and then Bob Weir's, it seemed like all this music could be recorded and produced. Jerry Garcia and Ron Rakow hatched a plan to start a self-funded, independent record company to put out those albums. Garcia himself was the star attraction, but the door was open to bluegrass, electronic music, songwriters, drummers and many other kinds of weirdness. A record company not run for some corporate suits, but one run by and for the musicians themselves. It was a great idea, and some very good music got recorded.

Overrreach and a cash squeeze got the better of Round Records. Some ill-advised management decisions, possibly connected to some very dubious business practices, required that Round was beholden to the vagaries of the Grateful Dead's own very-difficult finances. The Round recording artists found themselves unhappy with both the released material and the lack of money forthcoming, making Round very similar to a regular record company. When Grateful Dead Records evaporated under the weight of its obligations to United Artists and Ron Rakow's self-dealing, Round Records disappeared with it. Such grand plans were not undertaken again, and rarely spoken of.


  1. upon reading this, i have to posit a theory of my own: without the implosion of round/grateful dead records, the dead may have never returned to the road at all.

  2. A great read, as usual...but I didn't understand what this means:

    "print extra copies of the Wake Of The Flood album cover cheaply (and then sold the records as cut-outs)"

    What are cut-outs? Bootleg records? An empty record cover to hang on the wall? Also, what's the status on the Old & In the Way record? Are the musicians now getting their proper share from that original album? Grisman has released some more O&ITW cd's on his label so I'm sure that the money goes to the musicians on those, but what about the first one?

  3. a cut-out is a record with a notch cut in the cover. see here:

    1. Thanks, but now I'm even more confused. Did Rakow do that do rip off the band?

      "Rakow took great pride in saying how he had found a way to print extra copies of the Wake Of The Flood album cover cheaply"

      I understand the value in getting the album covers printed cheaply, but what did they gain by selling them as cut-outs?

  4. In record stores of yore, besides all the new records, there was a bin full of records for $1.99 or $2.99, or some such price, with their upper left corner "cut out." These albums were--supposedly--overstock, albums where the company had printed too many and cut their losses by farming them out at cut-rate prices. Only certain albums appeared in cut-out bins, but if you knew what was what and were a little adventurous, you could get some good albums cheap.

    However, standard record company contracts allowed them to forego royalties on cut-outs, so they sometimes used cut-outs to punish bands. If a group changed labels, then the prior label would dump all their old albums into the cutout bins to punish the transgression (when Steely Dan jumped from ABC to MCA in the late 70s, Katy Lied and other albums turned up for 3.99 all over the country).

    When a band was big enough to force a record company to offer a good contract, they made sure that the company couldn't "cut out" their albums. That was why you never saw Rolling Stones or Beatles albums in the cutout bins.

    The cutout bins were also handled by a separate distribution channel than the regular records, and that channel was swathed in mystery. There were rumors that the cutout bins were used to dump unauthorized pressings and other "grey market" albums. Many albums were awfully easy to find in the cutout bin, but impossible to find new.

    There were two reasons Ron Rakow might have wanted to use the cutout bins. The first reason would have been to get around United Artists. After the Dead had signed a distribution deal with UA, all their albums including Wake Of The Flood were supposed to have gone through UA. However, since he had apparently printed numerous extra covers, he could have LPs manufactured (or maybe he already had), stick them in the covers, and then tell UA that they were "unsold stock" from earlier. I recall Wake Of The Flood in cutout bins at discount prices, and it seems that Rakow would have been able to not share any of that money with UA.

    The second reason to use cutouts, of course, was that they were a different distribution channel. That made one more hideyhole for cash, one more opportunity for fuzzy accounting and one more trip down the rabbit hole. If the 70s rumors were true, cutout distributors were well prepared to deal in cash and leave very few tracks in the snow. Regardless of whether Rakow used the cash to help the band or for something else, that sort of arrangement was right up his alley.

    1. And this is why I check your blog every day--I usually learn something new, either from you or commenters like LightIntoAshes. The stuff about Round and GD records is great, but the subject of cut-outs is completely new to me and very interesting. I grew up with cassette tapes so I don't really know anything about records, and by the time that I was buying my own music everything was on cd.

  5. Joobie - your theory is tempting, but the timeline doesn't entirely bear it out.
    The Dead sent out a newsletter in January 1976 announcing that they planned to tour again mid-year, and Garcia spoke about the upcoming tour plans in March. It was not until April/May '76 that the final break with Rakow happened, and bankruptcy followed shortly.
    So their plans to hit the road again preceded the implosion by months.

    On the other hand - although publicly they just stated that they wanted to tour again because they missed playing, etc, the Dead were probably noticing by the end of '75 that their finances were plummeting, partly due to the lack of touring, and partly due to the GD Movie - Garcia's pet project, which gobbled up more of the Dead's money than Rakow ever did. So their financial situation may have been in their minds when they decided to tour again.

    Jeremy - Rakow said that he found it only cost $500,000 more to print 2 million album covers than 1 million covers, so he printed 2 million.
    "Then a few years later, when we needed money, I ordered the records to fill the covers from our pressing plant in Santa Maria at a special rate. I had the records drilled as cutouts before they were even shrink-wrapped, and then I sold them all to a cutout operation in Philadelphia for 95 cents apiece and made $500,000 in one day. They sold them in stores for $2 apiece, so in the end almost 2 million copies of Wake of the Flood were sold." [from Jackson's Garcia bio, p.246]

    I'm dubious about the numbers there - two million copies sold? really? - but it illustrates Rakow's kind of dealings.
    It also illustrates a couple of Corry's points - 1) even by Rakow's numbers, the band only broke even in this scheme, but 2) the cutout distributor may have paid Rakow in a way that didn't need to be "shared," and 3) there's no mention of consulting the Dead, who may not have been thrilled about seeing their first independent album in the cutout bins.

    Rakow's particular talent was digging up financing - if there was one thing he was good at, it was convincing sources of income (like banks, or record companies) that his business schemes were sound. One reason Garcia may have valued him was that he sounded quite plausible in the "straight" business world, and could make advantageous financing deals.

    1. yeah, i think my reasoning was that the band could see the writing on the wall w/r/t round records going under, and returning to tour was partially an effort to keep from going totally under.

  6. What, exactly, went wrong is up for debate, because Round's inner workings are still mysterious. I'll just mention a few other things to consider -
    1. Rakow & the Dead went back a long way. He had, in fact, been the financial manager of the Carousel back in '68. That operation had gone bust within a few months. Though he'd been an inept manager, the Dead apparently did not blame him.
    2. Rakow had essentially been the one who'd started up Grateful Dead Records in '72-73. Maybe other more businesslike people within the Dead organization could have done a better job; but Garcia, at least, seems to have seen Rakow as the guy who could lay golden eggs for them.
    3. Rakow ended up stealing $275,000 from the Dead - just after they fired him. There is, no doubt, a partly untold story & a history of bad feelings behind this; but it's worth mentioning that the final cause of the firing, was that Rakow was demanding that Lesh & Hart finish & turn in their albums on-budget and on-time, to meet the UA deadlines. They found this unreasonable.
    4. All Rakow's deals not only had to fund Round Records, but also Garcia's film projects - not only did the Dead end up spending over $600,000 on the GD movie, but Garcia also agreed to give something like $300,000 to help produce Hell's Angels Forever...a movie that didn't get finished 'til the '80s. I'd imagine all Round Records releases were peanuts in comparison.
    5. Not only that, but most Round Records releases were not big put it kindly. Old & in the Way was probably the biggest success. On the one hand, the Dead had driven themselves into the ground with the Wall of the Sound and stopped touring, so there was no longer any touring revenue to put in - and on the other hand, the musicians on Round were hardly putting out any big hits, either. Plus there was a recession going on, and possible problems with distribution. Rakow would've had to be a financial wizard to make all this work out.
    6. I'll be writing my own post on Rakow & Round Records soon, which will complement this one & bring up some other areas for discussion.

  7. LIA, thanks as always for the fantastic citations. Your point about Rakow's dealings with the cutouts is fascinating, since even by his own probably fictional description, its not clear how it makes money. Nonetheless it helps confirm my point that cutouts were another shady side of the record industry.I, too, doubt that half a million extra copies of WOTF were sold, but a lot definitely were--I remember all those cutouts in stores.

    It's also a great point that for all his many flaws, Rakow wanted Hart to turn in his album and Mickey wouldn't do it, so some of the flaws of Round had to do with the artists, not the business.

    I'm really looking forward to your posts on the black hole that was Rakow and Round.

  8. Some post! Fun to read, plenty of food for thought. EXCELLENT.

  9. in the summer of 75 my parents and i went to visit my brother jeff tamarkin in california. the plan was to fly into lax where jeff would meet us. from that point we did some sightseeing followed but several days going to national parks like the grand canyon and yellowstone. jeff lived in the bay area and we ended our trek there. we stayed a few more days in the area; our folks in a hotel and i with jeff. one night we went to see the rowan brothers at a marin club. lesh was hanging at the bar. we heard that earlier that night the dead did a practice at the great american music hall and the next night would be a private concert there. we went down in hopes of getting in. we heard the first set from outside. during the break many journalists who probably had to be there but didn't really want to, started leaving and would hand their invitations to us waiting fans. i think there were maybe 25 people trying to get it. i managed to get one but when i got to the door the guy asked who i got the invite from. i had to think quick because the wrong answer would mean not getting in and having the invitation taken away. i said anton round was the one who invited me and he let me in. i was able to see most of the second set but had to leave before the end as i was catching a plane home. as i left i asked at the door if i could have an invitation as a keep sake and he said ok as long as i didn't give it to someone else. i still have it to this day.

  10. Dave, that is pretty remarkable. I had always wondered if any civilians had gotten into that show, and now it seems a lucky few did.

    Its also interesting to hear that they rehearsed there the night before. The circumstances surrounding the August 13 show are definitely worthy of a post of its own.

    1. i seem to recall hearing they spent way too much time the night before figuring out how to mike the crickets. :-)

    2. i also just remembered. while at the show i overheard that kingfish would be playing their first east coast show not long after. we ended up going. that was in trenton,nj with several other bands at an all day thing.

  11. Interesting footnote. On the new Garcia website, run by Jerry's daughters, there is some commentary on the re-launch of Round Records and the history with Rakow.


  12. This is all brilliant and wonderful. You guys are digging deeply into the obscure stuff. Fabulous!

    1. Thanks. It's timely, too, what with the unexpected return of Round.

      Maybe the estate will release some cool Betty tapes back into the wild.

  13. Annoying nitpicky correction, but I know you guys like to have everything right. Stephen Stills's first solo album, for Atlantic in 1970, was called Stephen Stills. It was his third solo LP (not counting the two albums with Manassas) that was simply called Stills, released by Columbia in June 1975.

    1. unk, you were correct, and I fixed the post.

      Not an annoying nitpicky correction at all --annoying nitpicking is pretty much what I do. Thanks for reading so closely.

  14. The Garcia site mentioned above has a very brief summary of Round Records, concluding:
    "The coup de grace of the fledgling label came in September 1976 after a series of poor financial decisions by Rakow who was ultimately fired by Garcia and the band."

    That ambiguous sentence alone raises multiple questions:
    1. I don't think the Dead ever fired anyone for making "poor financial decisions." Yet it's hard to find specifics anywhere on what decisions, good or bad, Rakow made for Round. 2. Was Garcia really involved with the firing, or is his family now subtly distancing him from Rakow?
    3. Rakow left in May 1976. The label apparently lasted as an entity until September - well after the band had started touring again. What, if anything, did anyone do in those months to right GD/Round Records again? (Garcia's movie seems to have taken priority over any other effort.)

    Mainly hypothetical questions, I know; but there are other unknown areas as well...

  15. I was pretty excited when I saw that the newly revived Round Records webpage mentioned that it would be the source of "reissues." So, I wrote to them asking if we could see a reissue of the KEITH AND DONNA album, and this is the reply that I received: "Unfortunately, I don't foresee a reissue of the Keith and Donna material on Round…that isn't to say that Donna may not reissue this material through another avenue, but at this point, Round will strictly be the vehicle for Garcia related releases. Thanks for reaching out."

    So, there you have it....don't hold your breath for a Good Ol' Boys reissue either, I suppose (I refrained from replying that the Keith and Donna album is, actually, a Garcia related release!). And by the way: Fantastic article!

    1. Raile, thanks for finding out the answer to this question--I had kind of wondered about that. The implication of their answer seems to suggest that Donna controls the rights to it. Of course, they may not know either.

  16. A tidbit really. The original plan was for the cover of the second Garcia album to be embossed. I assume the plan was set aside due to cost.

    1. I don't think this was a trivial point at all. We may never know the true story, but the only scenario that makes sense to me was that the self-absorbed Rakow wanted to call the album "Garcia" and didn't realize that had been the title of the first album.

      Once he had printed the covers, there was no turning back, as he had no cash nor would he admit error. After reading about Rakow's glee at printing extra WOTF covers, it tells me he thought he had the cover thing aced.

      So it doesn't surprise me that he had some other harebrained scheme. Perhaps he planned to have the first pressing embossed, and the second 'regular,' not an uncommon practice at the time. Being Rakow, perhaps he made the regular albums first, as part of some grand scheme, and then didn't have the cash to actually pull off the embossed part one.

      In any case, whatever, the real story, the title of the Garcia album and the printing of the cover have to be a big part of it, because everything else makes less sense.

  17. Now wait a minute. We need to be grounded in facts.
    From what I've read in discographies, the first pressing of Garcia DID have an embossed cover! (You can still see pressings with the embossed cover being sold on ebay.)

    Also, Steve Brown (who worked for GD Records) had this to say in his Golden Road article on Round:
    "We had the "Garcia" promotional copies for radio stations, reviewers, and in-store playing printed with "Compliments of" over the title Garcia, instead of the usual "Promo Copy - Not For Sale" sticker. We thought it would be classier, but the disc jockeys and reviewers thought it was the title."
    One copy on is listed as "D.J. Copy. Embossed cover with 'Compliments Of Garcia' printed on."

    This is a different situation - not only did they emboss the covers of the first pressing, they also did separate printings with the extra "Compliments of" just for the promo copies! A lack of cash does not seem to be an issue here, nor a lack of thought.

    (Plus, remember that a "Sampler for Dead Heads" of tracks on the Hunter & Garcia albums was sent to all the deadheads on the mailing list as part of the promo effort when they were released - that's tens of thousands of free EPs being pressed.)

    And instead of considering the strange titling of the album as Rakow gone amok, there's also this to consider:
    Garcia's first solo album, of course, did not have his name on the cover, just an abstract picture. One thing JGMF has pointed out is that when Garcia decided he needed the income in the mid-70s, he made sure to publicize his name ("Jerry Garcia Band" and so forth). So here's his first solo record on Round, and what's on the cover? A big "GARCIA" and a picture of himself.

    I get the sense of rivalry with the earlier Warner Brothers album - Rakow & the Dead constantly deplored how poor Warners distribution for their albums was. Perhaps Rakow said, "They only sold X many, but if we do THIS, see how many we'll sell! We'll even use the same title!"
    At least, that makes more sense to me than the notion that Rakow somehow knew nothing of Garcia's previous album.

  18. excellent piece. I think i bought all these records. seastones was truly terrible, but the rest i liked a great deal. it's sad that old & in the way and rum runners remain out of print; tiger rose was re-released with new vocals and it just wasn't the same, and i've always wondered if it is the new vocal or that I had changed.

  19. One other thing... When the Dead released their second live album in 1971, did they come up with any bold new title? Nope. It was just "Grateful Dead," same as their first album.
    For Garcia to do the same thing 3 years later shows a small pattern, I think.

    Blair Jackson asked Rakow where the name "Round Records" came from. Rakow agreed the name was "lame & unimaginative," but "Nobody could ever agree on anything. 'Okay, records are round.' That they agreed on." [Garcia p.247]

  20. LIA, these are very good points and I am probably jumping to conclusions about the printing of the covers. It's also a very good point about the cover of "Compliments" being a painting of Garcia, very much in tune with the promotion of the time.

    However, the other side of the equation was that there was no rational explanation coming from Rakow, Garcia or anyone else. There were plenty of interviews and no explanation. Deadheads like us all know the "Skullf**k" story, and how the double album came to be called Grateful Dead. The band has dined out on that story for years--yet there is no explanation for the title of the first Garcia Round album.

    Now, to your point, the reality was somewhere inbetween. The Round album was a calculated effort to be successful in 70s record company terms, as the cover painting attests. Nonetheless, the execution was lacking, and in ways that suggest there was a deep disconnect.

    Who was it who "couldn't agree on anything"? Jerry? I doubt it. Who was disagreeing with Rakow? We'll probably never know, but I'm still curious...

  21. Rakow's comment may not be too germane to this discussion, but it does point out that a lot of decisions were made as full-band decisions, meaning the final decision was often a compromise. (Hence, the utterly lame "Grateful Dead" as an album title, after the big discussion with WB.)

    If Rakow's being truthful there, it indicates that he wasn't in control of naming his own company, let alone a record album. Quite possibly Garcia did not feel the execution was lacking on that album; at least I haven't seen him complain about it anywhere yet. (But like you, I don't think Garcia cared much.)
    The other thing is that Hunter's spectacularly-covered album came out at almost the same time. If Rakow were in charge of album titles & covers, would he have lavished more attention on Hunter than on Garcia? I suspect that "Garcia" was thought of as the true "flagship" album, hence all the work on the extra covers.

    (It's also notable that FIVE of the Round albums are simply named after the artist - Garcia, OAITW, Keith & Donna, Kingfish, and Diga. If it was Rakow's idea, he was at least consistent.)

    My own take, which differs from yours, is that no one, even Garcia, would have let Rakow name an album on his own; and that any decisions Rakow made, even as president of Round, may have been faced with upset band members in meetings ready to tell him his ideas sucked. That was how they'd always operated.
    OK, Garcia may have protected him until '76. Nonetheless, every band member (except Bill) released albums on Round. I would think there were vociferous disagreements over those two years, and the amount of control that Rakow had over his kingdom may be more limited than we think.

  22. My Round Records post is on indefinite hold, unfortunately - but this is a tidbit from a 6/8/74 Billboard article:

    "In an effort to counteract the counterfeiting of its disks, Grateful Dead Records will emboss the word "authentic" on the left-hand side of each of the new Grateful Dead LP's set for release this month.
    In addition, a new Jerry Garcia album on Round Records will feature a totally embossed cover as a safeguard against counterfeiting...
    'We ran into a lot of problems with counterfeit material on our last LP,' says Andy Leonard, art director and production manager of the two labels, 'so we came up with the idea of embossing 'authentic' on the new LP.'"

    ('Grateful' Label Plans Antipiracy LP Moves, Billboard 6/8/74)

  23. In an interview with the UK magazine Dark Star (August 1980), Robert Hunter had a few bitter thoughts about the Round era...

    DS: "David Grisman and Vassar Clemens were beefing on once about the fact that they never got any money from Old & In The Way. That was in 1977."
    Hunter: "I've never seen any money from either Rum Runners or Tiger Rose. It all got lost somewhere in Round Records. Rum Runners even made it into the charts - made it to 198 or something! Some of those transactions were very sloppy. I don't know how that all went down. I know that Grisman was very unhappy about all that. I haven't the slightest idea what went down and why money wasn't forthcoming. Whether it all got plowed back into the production costs? Funny things started happening once we started making the movie. A lot of the free money around seemed to disappear completely. It all got channeled into the movie one way or another. All available energy was just drawn into that... I think I was being sore about it. I did not like going into audio-visual; I wanted to write records!... [But] all the attention, all the money and all the interest was going into making the movie."

  24. And, unless I am mistaken, The Movie was really Garcia's baby. So here might a case where Jerry is using the other band members to support one of his projects, quite the opposite of how we normally think about these things, and in particular about Round, which was presumed to be Garcia's risk and Hunter (inter alia)'s potential reward.

  25. The Movie was all Jerry's, for sure, and I think all the other band members came to view it with some trepidation as the work on it went on & on. But one unspoken rule of the Dead seems to have been: you don't say no to Jerry.
    Personally I think the Movie (and the economic difficulties of running a small indie record company at that time) was more responsible for sinking Round than anything Rakow did.
    But anyway, Garcia probably assumed that Rakow could dig up funds from anywhere to keep the movie production going; but ignored that part of those funds were coming from his friends' royalties. So everyone else got screwed. It was probably quite reasonable for Grisman to leave in a huff.

    1. Totally fascinating. It really fills out part of the picture of why Garcia stayed with these guys, how they all existed together so intimately, alternately taking care and taking advantage of each other.

    2. LIA, I think your phrase "you don't say no to Jerry" sums up a lot of the history of the Grateful Dead. Certainly the Movie insured that Round Records would not survive, even if Rakow was circumlocuted..

      I think Garcia rationalized this on the grounds that he was losing far more money than the other band members and colleagues (Hunter, Grisman, etc). However, while that was true, he had the opportunity to make more money from touring, so the risk parameters were hardly identical.

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