Kerplunk 

The rise and fall of the Lookout Records empire.

Page 3 of 8

Eventually, even while cognizant of the damage a miffed Green Day could do -- "Any high-priced music lawyer could destroy any one of Lookout's contracts," Townley notes -- financial pressures apparently forced the label to fall behind on that deal, too. "That's the only thing I can figure," Michalski says. "That they must've botched up so bad they didn't have a choice."

Outside parties can only speculate as to the figures involved, and Appelgren won't disclose numbers. For perspective, however, Livermore says Green Day had netted anywhere between $10,000 and $2 million to $3 million in royalties annually, and with the success of American Idiot, Lookout's Green Day sales were almost certainly on the uptick.

While most Lookout bands simply weren't earning enough royalties to risk burning bridges, that clearly wasn't the case with Green Day. "That's the thing: Nobody really wants to fuck Lookout over, but they don't want to sit there and let Lookout fuck them over either," Michalski concludes. "So a lot of bands have waited a really long time before they took any action. People gave [Lookout] a lot of slack."


'It's About Trust'

While Screeching Weasel felt mistreated, it at least got paid in the end. Many smaller Lookout bands found they had to pester the label relentlessly to get their due. Sometimes they'd get it. Sometimes not. "When I worked there," says Townley, who was on Lookout's staff from 1997 to 1999, "I had to go in whenever royalties were due, I think it was every three months, and say 'Where's my check?' even though I worked for the company and I was getting my regular paycheck. My artistic royalties were not being dealt with. For the smaller bands, that was certainly standard operating procedure."

"They still owe us money," concurs Jon Ginoli of SF queer-punk outfit Pansy Division, which worked with Lookout from 1993 to 1998 -- the band is owed a couple thousand dollars, he estimates. He walks a polite line between acceptance and frustration. "Somehow their accounting was a little sloppy, but we were always able to get paid, even if sometimes we had to make a few phone calls to straighten things out," he adds. "But at a certain point a couple years ago, suddenly we weren't getting statements regularly. And after that, when we did get statements -- you know, we get a statement and a check -- we started getting statements that said, 'We owe you blah blah blah,' but no check."

The missing payments grated on staffers as well. "It's just really crappy business practices," Michalski says. "They think, 'Oh, we can just string them along for a little longer,' and then a little longer becomes too long for people's patience. It was just so frustrating. That's why I had to leave, because I was the one answering the phone: 'Oh, yeah, check's in the mail,' or whatever. And it wasn't."

As Lookout's "royalty advocate," Townley was supposed to help smaller bands decipher royalty statements and defuse arguments. "For myself, and for the people I know who were bummed about royalties, it wasn't about money," he says. "It was about living up to your promises. ... If it was about money, we wouldn't be in these bands. If it was about money, Green Day would've pulled their records in '94. But it's not about money. And that's really important for people to understand: It's about trust."

Appelgren seems to acknowledge this now, and while he insists any outstanding royalties he owes are unavailable because they were poured back into Lookout -- not his own pockets -- he is nonetheless conciliatory. "I expect that as we work on figuring out the next phase of Lookout, there is going to be a kind of facing up to the truth of our situation, which means having really honest conversations," he says. "There's been an air of crossing our fingers trying to create new success and hoping that'll make everything better. That didn't happen, clearly."

Lookout's current woes stem in part from Appelgren's failure to be a tough enough manager. Hesitant to lay off staff even as times got tough, he instead halved employee work hours for six months last year, and then rehired everyone to full-time last October. Appelgren now says the downsizing didn't go far enough, and with Green Day out, his crew may be gone for good. In the boom times, meanwhile, he instituted full health benefits and a 401(k) plan. "When we could afford it, I really wanted us to not only be a model record label, but a business that supported those people making a commitment to it," he says.

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