He agreed. About a month later, the phone call came from the studio in Germany. I said, “Record him. Send me the bill.” I paid the bill, and they sent me the tape. Then a few weeks later, I received photographs from him. He’d been in a terrible car accident. I thought, What a perfect metaphor for the state of his country. The Russians had suppressed the freedom movement. I put a photograph of him lying in a hospital bed, all bandaged up, on the front cover—and a nude shot of him standing and playing the flute on the back cover. The album [SHQ] did not sell, as we were on our way out of business then, so it did not receive promotion.
I went to the MIDEM in January 2008 and met a friend who was a Czech publisher. He wants to release the album in his country, where Karel Velebny is revered. We shall license it to him [Velebny, who died in 1989, also founded the Summer Jazz Workshop in Frýdlant, Bohemia, in 1984, which has since been named after him].
Even from the start, did you see the free jazz records at all from a political perspective?
Yes. Art is profoundly subversive. If you’re living under a system whose government is disseminating lies, art is a refuge. It’s difficult for the government to control, if it’s not verbal. Art is inextricable from the free expression of ideas. It subliminally conveys a spirit of freedom. In the late ’60s, we had a system that was drafting American youth for the Vietnam nightmare, and we have a recurrence of preemptive war now, and the official lies that go with it.
What was your relation with the East Village Other, the underground newspaper? They were receptive to the records you were producing, and you even did a record with them.
The Fugs were part of that Lower East Side community of artists, poets, and writers. They trusted me. The newspaper’s editors asked me to do a record that would help finance the paper. They brought the artists to the session.
When did you first become aware of errors or faults in your handling of the label as a business?
I knew from the start that I was woefully incompetent and not suited to deal with both the creative side and the business administration side. I never saw it as a business. It is rare that one can wear two heads. Some artists have phenomenal business acumen, but most have one orientation or the other. And my orientation was to hear what was going on. I never asked, “But will it sell?” That is no way to run a business, if you look at it as a business. If you look at it as something different—as a commitment, a calling, an obsession—no, I didn’t make mistakes. To regard it as a business would have been preposterous. ESP planted seeds that might yield a harvest in a year, ten years, or thirty years. How does one derive a livelihood in this manner? I wasn’t married; I didn’t have the normal concerns about getting married and having children and assuming the responsibility to support a family. I met women from time to time who were extraordinary, who would have made superb wives. I wasn’t about to settle down.
Because of the money from your parents, weren’t you able to keep the label going until that ran out?
Yes. And it ran out because I had been put out of business in ’68, when we were doing phenomenally well. The government closed my business because of our opposition to the war.
With respect to business practices, how did you determine your royalty rates and why did some believe it was too low?
I think our original price when we started the label was $4.98. Over the span of a few years, it became $6.98. A $5.00 retail was $2.50 wholesale, and 25¢ would have been 10 percent of $2.50, domestic. And foreign export would have been 12.5¢. The rate was 10 percent of wholesale. That was not wildly off the mark. The records themselves were not ever—for any of the artists—deemed to be a significant source of earnings. The artists would make more from a tour or a series of concerts in a few weeks than they’d make in a year from a record. The records were a vehicle for promotion. And this had been true of the industry throughout its history. The record labels and their producers, recognizing the vulnerability of the artists, would make sure the studio costs were huge. You had to use a Columbia Records studio if you were recording for Columbia, and you would incur astronomical studio costs, promotion costs, and breakage allowances.
Did your royalty rate change in those few years?
Not only did it not change, but we paid royalties to few artists. During those three years, we kept records of what the sales were. We saved those files and are busy issuing statements that go back to the beginnings of the label. When ESP resumed operation six years ago, we changed our royalty rate to 10 percent of wholesale for all recordings, unilaterally—including those that had been recorded during the early stage of the label—to reflect current prices.
But most of the time you were paying advances?
Three hundred dollars to a leader, fifty to a hundred dollars for a side person, and they all shared ownership of the album.
How did you determine these sorts of arrangements?
Artists who got together to record for ESP produced their own albums and often exchanged roles. A sideman on an album might become the leader on another album. They were all improvising. We decided that the leader should have a share of the royalties as the composer (he was generally the composer), as a performer, and as the leader. That’s three shares to one share for each of the sidemen. That is the ESP formula. All the performers share in the benefits of the sales of the record.
Whether downloads or record sales, we have become efficient in our accounting practices. We did not pay substantial royalties during the first years or during the years we were out of business. We didn’t pay royalties on the licensing either, because licenses were general advances, and then we’d receive absurd, fictitious royalty statements that were useless for this purpose.
So what did you do wrong, and how did musicians understand what was wrong, or right? Are there any particular things that you can point to as your failures in that era?
I have no regrets over any decision that I made during that time. My commitment to document the music was total. So, although I received criticism, it was more from people who didn’t get recorded than from those who did. And of those who did, some were verbal in the first few years, but as time went on, they became far more tolerant, recognizing how important their first record was to their career. Few records ever recouped their production costs in the early years.
Was there a point where this bad reputation was beginning to surface?
Writers have written critically about ESP regarding its royalty accounting practices. Our artists, as they have mellowed, are far more sympathetic to the label, and they now often cite its importance in launching their careers.
And certainly a number of the musicians kept coming back to you, complaints or not.
Yes. There is no ESP musician today with whom I can’t communicate amicably, or who would decline to work with ESP regarding a retrospective or current project involving his or her work.
5 Decline and Fall
In 1968 the label fell over the edge. What were the circumstances? How did that come about?
I had a team of four, including the shipping clerk and his assistants, who were the Godz. We had three albums on the charts by the Fugs and Pearls Before Swine. One was at position 30 on the pop charts. We were hot. Then, I received a call from an industry figure associated with Warner Brothers—that Warner wanted to buy our label. And I said no. One morning, weeks later, the phones stopped ringing and the orders stopped coming in.
