Soul Food for Thought–The History of Stax Records

After a spin around Sun Records, Leah and I altered our orbit a couple of Memphis miles to the center of a parallel universe of talent, originally known as Satellite Records in 1957.

Inspired by the success of Sam Phillips, Jim Stewart–a banker by day and frustrated fiddler by night–decided he too could produce hit records despite no music industry experience. Upon realizing his need for professional recording equipment, he enlisted his older sister, Estelle Axton who mortgaged her home for an Ampex 350 console recorder.

In 1960, Satellite Records moved to a converted theater on McLemore Ave. and Stax Records (a fusion of their last names) was born.

Rufus and Carla Thomas recorded the new company’s first hit record, Cause I love You, in 1960…

which caught Atlantic Records’ Jerry Wexler attention and willingness to negotiate a distribution deal for all future Rufus and Carla recordings, and right of first refusal of all other Stax artists.

Steve Cropper also added to the early success of STAX.

Originally, his guitar playing fronted the Royal Spades, but Jim Stewart invited Cropper to Stax where the group was re-billed as the Mar-Keys and became the house band, playing sessions with newly signed artists as well as recording their own sounds, like Last Night, a 1961 hit.

Steve Cropper would leave the Mar-Keys to become head of A&R for Jim Stewart, but continued to play back-up sessions as needed, always a part of the Mar-Keys floating membership. One day, while awaiting a session, Booker T. stepped in for a turn on the Hammond organ, and Green Onions was instantly conceived in 1962.

The Mar-Keys had just morphed into the next Stax session band, a/k/a Booker T. and the M.G.’s,

Stax success continued when Otis Redding, driver for Johnny Jenkins’ took the microphone after Johnny’s dismal performance. Subsequently, Otis auditioned with Booker T. and the M.G.’s on accompaniment, and wowed everyone with his song, These Arms of Mine, released October 1962.

Otis Redding would become the label’s biggest star, continuing with hits: I’ve Been Loving You too Long; Respect; Just One More Day; and Try a Little Tenderness. But like Icarus, who flew too close to the sun, Otis and several members of the Bar-Kays lost their lives in a plane crash on December 10, 1967, enroute to a performance in Cleveland.

Only 6 months earlier, Otis was headlining at the Monterey Pop Festival, backed by Booker T. and the M.G.’s. At the time, he was fully aware of the opportunity and exposure. He said, “It’s gonna put my career up some.  I’m gonna reach an audience I never have before.” He was 26 when he died.

(Sittin’ On) The Dock of the Bay, co-written by Steve Cropper was released one month later, and reached #1 on Billboard’s Hot 100.

In 1968, the wheels came off the Stax bus. They lost their distribution deal with Atlantic Records after Atlantic was sold to Warner Bros. Records in 1967. Warner Bros. also reclaimed the library of master tapes held by Stax, citing a clause in Atlantic’s contract that entitled them to “all right, title and interest, including any rights of reproduction.”

Adding insult to injury, Warner Bros. also reclaimed Sam and Dave, who were “on loan” to Stax from Atlantic.

And to make matters worse, the country was at war with itself after the murder of Martin Luther King, Jr. on April 4,1968 just blocks from the label’s headquarters.

With their back catalog depleted and no distribution deal, Stewart sold his shares of Stax to Gulf & Western for millions, but stayed behind to continue running the company. Enter Al Bell, record producer and songwriter, who joined Stax in 1965 as director of promotions, and became co-owner and vice-president after buying out Estelle Axton. In 1969, Bell shepherded the “Soul Explosion,” generating 30 singles and 27 albums within eight months,

utilizing house talent like the Memphis Horns (an off-shoot of the Mar-Keys) and new talent like the Staple Singers.

But musically, the resurrection of Stax records can be attributed to Isaac Hayes, the Black Moses.

In 1969, Isaac Hayes released Hot Buttered Soul, his four-song, soul-defining masterpiece which sold 3 million albums.

The Stax Museum has many alluring features and exhibits. There’s the reassembled Hoopers Chapel African Methodist Episcopal Church from Duncan, Mississippi built around 1906;

there’s also a disco dance floor, that ideal for busting a move and showing your groove;

but the crown jewel of the collection has to be Isaac Hayes’ rotating 1972 peacock-blue, 24K gold-plated Cadillac.

The release of Theme from Shaft— which won an Oscar for Hayes for Best Original Song in 1971–

put Hayes in the drivers seat when it came time to renegotiate his contract…

In 1970, with the wind at their backs, Bell and Stewart repurchased Stax from Gulf & Western with borrowed money from Union Planters Bank.

In the summer of 1972, in pursuit of a wider audience, Al Bell brought an all-star revue to Los Angeles Memorial Coliseum–dubbed Wattstax–to commemorate the 7th anniversary of the Watts riots. The sold-out crowd of 100,000 fans spawned a highly regarded documentary film and a live double album of the concert highlights.

Stax archives recount the final years of Stax Records:

By 1971, Stax had grown from a family production company distributed by Atlantic Records, to a freestanding independent record company. Stax now manufactured, marketed and distributed its own recorded music in America and through licensees around the world. The racial harmonies that typified Stax’s early years was becoming an issue. Trust was an issue. Jim Stewart, producer-cum-chief executive officer was tired, disillusioned, and pushing paper instead of making records. He had not attended Wattstax. He told his partner Al Bell that he wanted out.

Change and challenge were pervasive after so much growth. One major problem became the theft of Stax property, including master tapes. Stax hired one of the country’s premiere white-collar crime investigative firms. Their search did uncover improprieties involving some employees, but Jim Stewart and Al Bell decided not to prosecute. Instead new security measures were designed and implemented at the McLemore Avenue and the Union Avenue Extended offices to specifically protect and preserve Stax masters, East Memphis copyrights and other valuable assets.

Al Bell was enjoying a Midas touch. Isaac Hayes, Johnnie Taylor, and the Staple Singers had all emerged as superstars. Rufus Thomas had entered the most successful era of his career. Albert King had broken through to the white rock album market. Mid-level artists such as Soul Children, Frederick Knight, Luther Ingram, and Mel & Tim were all hitting the charts. Bell was pushing company expansion in many different directions at once, issuing pop, rock, jazz, country, gospel, and comedy records in addition to its staple of classic soul tracks.

Though Stax thrived in the independent world, it had still not broken through in mass-market distribution venues like Sear and Roebuck. Seeking a buyer for his company’s other half, Al Bell kept that distribution goal in mind. He wound up, surprisingly, making a distribution deal with Clive Davis at CBS Records. CBS, though successful with many white acts, boasted no major black artists. “The company was” as Bell says, “larger that life white with no real knowledge of the black market.”

Stax and CBS each complemented the other’s weakness. Stax could help CBS reach the small, privately owned stores, and CBS could get Stax into huge chains. In 1972, through a complicated agreement, Bell bought Stewart’s half with money loaned from CBS. Jim Stewart, agreeing to remain with the company for five more years, received $2.5 million, up front, and millions more in payments to come.

Though the new relationship began well, a disaster occurred in May 1973: Clive Davis was fired from CBS. The deal he’d struck with Al Bell was full of nuance and personal commitment between two parties, and Davis’ replacement neither understood nor appreciated the arrangements.

Faced with a contract it felt was a mistake, CBS began systematically reducing payments to Stax for records sold, precipitating a tangle of legal battles and a shortage of operating funds. Stax was bound to CBS as its sole distributer, and could not get its product in to stores nor receive monies for records that had been sold.

To keep the company going, Stax founder, Jim Stewart secured operating loans with his forthcoming CBS payments as collateral. Going further, he gave Stax a personal loan and then personally guaranteed even more borrowed money. But CBS continued to withhold payments and Stax continued to hemorrhage.

Continuing:

By summer 1974, Stax defaulted on payments to Isaac Hayes, and was forced to relinquish the marquee artist. Around the same time, Stax gave Richard Pryor, in lieu of payment, the master tapes for his groundbreaking album That Nigger’s Crazy. Pryor took the album to Warner Brothers; it went gold and won a Grammy award. By the end of 1974 Stax had given 85 of its employees their pink slips.

Bell, Stewart, and Stax vice-president John Burton campaigned for capital to pay off both CBS and Union Planters Bank, from who, Stax had borrowed heavily. Leaving no stone unturned, they approached Saudi Arabia’s King Faisal, A tentative agreement was worked out, and Burton headed to the Middle East. Faisal was assassinated by his nephew on March 25, days before the meeting was to take place.

Stax persevered but times were increasingly turbulent. The nation itself struggled: Watergate led to President Nixon’s resignation. Recession gripped the U.S. economy. In Memphis, Union Planters Bank—which had loaned hundreds of thousands of dollars to Stax—struggled for its own economic survival.

Despite chart topping hits during late 1974 and 1975 by Stax artists including Rance Allen, Little Milton, the Staple Singers, young pop sensationalist Lena Zavaroni, Shirley Brown, Albert King, the Dramatics and others, distribution challenges perpetuated by CBS Records strangled Stax.

When Union Planters abruptly called in Stax’s loans and they were unable to pay promptly, the bank immediately and aggressively pursued the company. Stax’s daily operations were crippled. On June 8, 1975, the company basically ceased being able to pay anyone. In October, Stax officially laid off all its remaining employees. Many still continued to work for free. The battle between the bank and Stax was rancorous and bitter. Many believed that racism was the motivation which drove Union Planters pursuit while others believe that it was strictly a business decision.

For years, Stax had contributed to community efforts. In the company’s final days, the local community gave back. In latter 1975, when Stax could not pay its remaining employees, the proprietor of the College Street Sundry, Ms. Ethel Riley Flowers, regularly fed them at no charge. Merrit’s Bakery also gave food to the last employees “because,” in the words of William Brown, “she knew we didn’t have no money. These people were surviving on the love of each other. They weren’t surviving on waiting for that dollar to come around the corner. They knew it wasn’t coming!”

Unable to pay its bills, its artists, its loans, Stax was shut down on December 19, 1975, forced into receivership by an involuntary bankruptcy petition.

Union Planters Bank, that had helped Stewart and Bell buy back the company from Gulf & Western, moved to collect on personal guarantees given by Jim Stewart. He lost his fortune, his assets, and his home.

The Stax building was padlocked.

In January 1977, Stax’s assets were parceled out in a bankruptcy sale on the courthouse steps. The catalog of tapes was sold to a liquidating company, the office furniture to an auction company, and the recording equipment to an individual who hoped the magic would continue to work.

The Stax building was sold for ten dollars in 1980 to the Church of God in Christ (COGIC).

For Jim Stewart, it’s always been about the music.

He was inducted into the Rock and Roll Hall of Fame in 2002 for his important contribution to the music scene.

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