The rise and fall of the Lookout Records empire.

A decade after going global with a song about being too bored to masturbate, Green Day has reclaimed its pop-culture stranglehold by dominating MTV’s masturbatory (but oddly boring) Video Music Awards. During last month’s prime-time awards broadcast, the East Bay trio raked in seven trophies related to its 2004 album American Idiot, which has garnered widespread critical praise and sold four million copies so far. The band is now conjuring cash at a rate unheard of since Dookie, its 1994 major label debut, went diamond (ten-million-plus units sold). With their latest, Berkeley’s pop-punk geese have clearly laid another golden egg. And although it’s been years since they’ve truly belonged to the East Bay or their old Gilman Street stomping grounds — having long since ascended into the rootless strata of ultracelebrity — at least one other local entity stands to gain mightily from Green Day’s return to the limelight.

Make that stood to gain. The day after the MTV gala, Chris Appelgren, co-owner of Berkeley indie-punk label Lookout, led a tour of the elaborate two-story office he owns on Adeline Street. It’s adorned with the usual underground-label detritus: old posters, random video-shoot props, and walls of mail-order-ready CDs, records, and T-shirts. What’s unusual is that only two people occupy the cavernous space: Appelgren and fellow co-owner Cathy Bauer (their third partner, Appelgren’s ex-wife Molly Neuman, now lives in New York City). Although the label plans to relocate to a smaller space soon, it used to have even more elaborate digs, and a sizable staff to match. At its peak in the mid-to-late-’90s, Lookout operated a record store and office warren on Berkeley’s University Avenue, where it employed eighteen full-timers. As recently as late July, the label had six full-time workers in addition to the Cathy-Molly-Chris nucleus.

But Green Day funded much of that, and Green Day no longer will.

Lookout is notorious for giving the band its start, while Green Day’s sales are notorious for keeping Lookout afloat. Signed in the late 1980s by label cofounder Larry Livermore, the trio put out a few EPs and two full-length albums —1,039/Smoothed Out Slappy Hours and Kerplunk — on Lookout between 1989 and 1991. Three years later, major label Reprise unveiled Dookie and made Green Day a household name, and Lookout, which suddenly controlled the back catalogue of one of alt-rock’s biggest sensations, found itself atop a gold mine.

Green Day could have taken those valuable early records with it, but instead opted to let Lookout keep control, and before long, both releases went platinum. Those successes, coupled with another prescient Gilman-connected Livermore signing — ska-punk pioneers Operation Ivy, whose 1989 CD Energy sold more than half a million copies through word-of-mouth idolatry — gave Lookout three megasellers that kept money pouring in. At its peak in 1995, the label boasted $10 million in sales, astonishing for a small indie label. Appelgren, a former employee who assumed full control of the label from Livermore in 1997, sat at the helm of a deified pop-punk imprint that seemed financially set for life.

All of which makes Lookout’s current struggle to survive seem baffling. Yet somehow, a combination of managerial hubris, bad business decisions, and sales that haven’t lived up to the increasing sums spent on promotion have decimated the label that once documented and defined the East Bay’s signature sounds. Worse, through a combination of bad bookkeeping and poor communication, Lookout has left behind a string of disgruntled ex-employees and frustrated bands that have clashed with Appelgren over royalties and eventually fled to other labels. The list of defectors has grown over the years to include, among others, Screeching Weasel, Avail, Neurosis, Pansy Division, Enemy You, Blatz, Filth, the Criminals, and the Riverdales.

But the latest defector is by far the most devastating. In late July, citing unpaid royalties, Green Day legally pulled its Lookout back catalogue, cutting the label’s fiscal umbilical cord. “It’s been over ten years, and really, we’re not the first band to do it,” bassist Mike Dirnt explains. “I feel we’ve more than honored our handshake agreement with Lookout. I think that’s really fair. There comes a time where you’re like, ‘Okay, how long do you want to support your record label?'”

Although Lookout reissued 1,039 last year, both it and Kerplunk are ripe for future boutique-repackaging affairs, possibly on East Bay punk label Adeline, co-owned by Green Day frontman Billie Joe Armstrong. For now, Dirnt says, “We’re just going to hold onto those records for a while. Something like that comes up and everyone wants to know what you’re going to do, but sometimes it’s nice to just have them in your possession.”

Green Day took some initial flak from overzealous young punks, and on the day gossip Web site PunkNews.org reported Green Day’s decision, Lookout co-owner Molly Neuman spoke out in defense of the band: “We have nothing but respect for them,” she said. “We are a small business that’s facing challenges. … Although it’s very, very difficult for us and the people we love who work for us, we have to face the size of the company that we are, and scale it down to what that is. And it blows. But we’re gonna do it.” On a tour of the Lookout space with Appelgren, the results were immediately apparent: A row of desks, each topped with a bright blue iMac, stood as reminders of the employees laid off following Green Day’s defection. All upcoming releases and new signings have been suspended indefinitely so Lookout can focus on paying back the outstanding royalties that have been largely to blame for the artistic exodus.

“I like and respect everyone I work with,” Appelgren says. “And I have a sense of having failed and having not done everything I could or should’ve done for them, and lost sight of them somewhat. If I can’t restore everything, I can at least repair it as much as I can, and also hopefully bring Lookout to a place that is truer, truer to the size of label that we are, truer to the number of records I can reasonably expect to sell.”

Repairing the finances will be tricky enough, but Lookout’s reputation has taken a beating. Few musicians publicly accuse Appelgren and his partners of malice, but their sketchy bookkeeping and seeming inability to pay bands without being hassled is assailed by employees and artists alike, or both in the case of Jesse Townley — a longtime local punk fixture who once served as the label’s “royalty advocate” and has played in Lookout bands including Blatz and the Criminals. “I’ll tell you this,” he says. “When you talk to ex-employees and ex-bands frankly, you hear, ‘I was so excited to be a part of something I thought was really special, but dot-dot-dot, XYZ happened,’ or ‘It turns out XYZ was really the case.’ Time and time again. I’m over being frustrated — I’m just resigned. It’s like, ‘Yeah, you know? It sucks.’ It’s one more thing that was really great at one point, and just went into a spiral of mismanagement, and that’s that.”

Too Much, Too Fast

The things that define you can also haunt you, and Lookout has formidable ghouls in both Green Day and Larry Livermore. The label’s cofounder — his original partner, David Hayes, jumped ship in 1989 — is a mythical East Bay figure, a then-forty-year-old guru who came down from the mountain of northern Mendocino County, beheld the vibrant pop-punk scene seizing the 924 Gilman warehouse, and immediately grasped its genius and marketability. “With both Operation Ivy and Green Day, I knew within thirty seconds of the first time I saw them that they had the potential to be great, and that I wanted to do a record with them,” he recalls via e-mail. “My admirers call me a genius, and my detractors say I was just plain lucky.”

Like most underground labels, Lookout began as a devoutly homegrown affair that held disdain for major-label greed and stood for DIY punk ideals like fairness and friendship before commerce. “I didn’t expect it to get too big, though in the back of my mind I certainly thought it was possible,” Livermore says. “I knew that the bands we were seeing at Gilman were as good as or better than anything I was hearing on the radio or seeing in other clubs, so I thought that if there was any justice, some of them should make it big.”

The early Lookout bands were largely tied to the Gilman scene, with local stalwarts such as Crimpshrine, Neurosis, The Mr. T Experience, and Samiam filling the roster. When the majors eventually came calling, Op Ivy imploded at the prospect of fame and fortune, but Green Day proved willing and extremely able. “To me it mostly meant writing more zeros on the checks and realizing I probably wasn’t going to have to go back on welfare anytime soon,” Livermore says.

But the downside of Lookout’s newfound success was immediately evident. With serious cash now at stake, the band-versus-label spats that plague any label only got more heated: One ugly dispute between Livermore and Chicago punk band Screeching Weasel arose from Lookout’s complicated royalty arrangement, a painstakingly detailed 60/40 split between band and label, respectively, of both costs and profits. Frontman Ben Weasel insisted he was getting ripped off, a charge Livermore vehemently denies; Bill Michalski, a friend of Weasel’s who went on to serve as Lookout’s accountant from August 1998 to August 2000, admits the bookkeeping could easily generate confusion and dissent. “You get a UPS bill — there was a package sent to promoters in Europe,” Michalski says, offering an example. “Four bands would go on tour, and you had to figure out by weight how much the promo materials weighed for each band, and divide that up between their releases. Everything was expensed out that way. Because of that intricacy, Ben Weasel just assumed they were trying to cheat him, because he didn’t understand it. But they weren’t trying to cheat him.” (Ben Weasel declined an interview for this article on the advice of his lawyer.)

The dispute drove the parties to the brink of a court battle. And while Livermore was prepared to take that step to earn vindication, his most enthusiastic young employee — Appelgren — stepped in and appealed on Screeching Weasel’s behalf. “Our agreements all say that our contract is based on friendship and trust, and here was a situation where that friendship and trust was breaking down,” Appelgren recalls. “And I thought it was more important to try and come from that place. Kind of an idealistic approach, I guess.”

Livermore eventually relented: He and co-owner Patrick Hynes agreed to sell their stake in Lookout to Appelgren, whose first big move was to re-sign Screeching Weasel to a new, less opaque royalty arrangement, albeit one Michalski suspects actually cost the band money. Soon thereafter, Weasel convinced Appelgren to purchase Weasel’s own small pop-punk label, Panic Button, a move Livermore now cites as a financially devastating act of appeasement: “I’m not in position to give an exact dollar figure, but put it this way: It would have easily been enough to pay off all of Green Day’s back royalties.” Appelgren concedes it was a bad move. “I would not recommend buying a label to anyone,” he allows.

Despite his efforts, Screeching Weasel eventually jumped ship and now works with South Bay imprint Asian Man. And while the circumstances were more complicated than the classic label-screws-band sob story, Weasel’s allegations made the rounds of the credulous underground, adding to an accumulating lore of Lookout business squabbles.

It’s tough, however, to really get to the bottom of that lore, since many key players are reluctant to go public — Appelgren wouldn’t discuss specific disputes, and even bands that allegedly were wronged tend to be tight-lipped. Avail, a vaunted East Coast punk outfit once rumored to be preparing a lawsuit against Lookout, declined an interview, citing good friendship over bad business.

Indeed, Green Day may have been the first band owed enough to risk an unflattering public fight. The delinquent royalties accumulated gradually, and fairly recently — Michalski and Townley say Green Day was largely paid up as the ’90s drew to an end. Not fully paid up, though. “I think they were stiffing everybody equally,” Michalski says. “I don’t think it was a decision to do that — I think they just made such bad business decisions, they just found themselves with no money to do it. When I was there, Green Day and Op Ivy were always top of the list — we paid them before we paid anyone else. [Lookout was] aware of the fact that those guys could sink or swim the label.”

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.

Yet Appelgren has faced plenty of criticism for struggling at all. Sure, labels hit financial snags all the time, but Lookout’s early success only made its subsequent failures more perplexing. “The thing is, they had three releases on that label that sold, rain or shine — the two Green Day albums and the Op Ivy,” Ginoli says. “And a lot of labels don’t have that. So I’m very disappointed that they did not manage their business better in order to keep going. … I don’t think they were out trying to screw people — I just think they’re lousy businesspeople.”

Townley has heard that one a few times too many. “If you’re incompetent for that long, it becomes malicious,” he says. “Because you don’t actually care enough to change, you don’t care enough to learn how to be a good employer, you don’t care enough to put in a workable royalty system. Hey, this Green Day thing is not a new problem, and there’s a huge list of bands who left. ‘Hey, that’s a problem.’ No shit! It’s been a problem.”

But the ongoing royalty snafu is a symptom of Lookout’s financial problems, not the disease. If Appelgren didn’t pocket the ludicrous royalty sums Green Day was supposed to be earning, then where the hell did it go? How can a relatively small indie label burn through millions?

The answers, respectively, are “promotion” and “very, very easily.”

Whatever Sticks

Jon Ginoli recalls with bemused nostalgia his band’s attempt to invade MTV. Pansy Division’s 1996 video for “I Really Wanted You” got played exactly once — on the late-night alt-rock show 120 Minutes. Radiohead hosted. It never aired again. It cost $5,000 to make. “And that was considered a triumph,” Ginoli notes.

Band and label alike wanted to position Pansy Division’s fourth Lookout album, 1996’s Wish I’d Taken Pictures, as the Breakout Record. Alt-rock was huge, out-of-nowhere success stories were still possible via a seemingly flexible radio and MTV market, and Ginoli and his mates had recently benefited from their highest-profile gig ever, opening for Green Day just as Dookie broke.

The economics seemed to make sense. Pansy Division’s first record brought in $5,000 before expenses, its second made $10,000, and its third $15,000, all on shoestring recording and marketing budgets. “We never spent money on promotion,” Livermore recalls of Lookout’s early mentality, “apart from sending out about a hundred records to fanzines and college radio stations, and a couple hundred bucks for ads in Maximum Rocknroll and Flipside fanzines, essentially announcing that the records existed. And that was it.” To wit, Op Ivy broke up prior to Energy‘s 1990 release and thus never even toured to support it, but the seminal album sold like hotcakes anyway. (Under Appelgren’s watch, Lookout would mail up to 1,500 promo copies of a new release to press, radio, and other industry flacks.)

With Pansy Division’s star rising, unaided, in a similar arc, the next step seemed obvious. Appelgren sums up the post-Dookie Lookout mentality: “We created so much success not doing any of these things — not doing these marketing and promotional efforts — what would happen if we did start to do these things?” So Pansy Division shot a video that cost more than the recording budgets for its first three records combined, and Appelgren took out a costly ad in Spin. As an added oddity, the band hooked up with a Canadian minor-league hockey card manufacturer, which produced a limited-edition set of Pansy Division cards, the traditional stick of gum replaced with a condom. Total estimated promotional budget: $10,000. Total sales of Wish I’d Taken Pictures: roughly $15,000. The band’s prior album, Pile Up, garnered equivalent sales at a fraction of the cost. “I don’t regret doing it,” Ginoli recalls of the power move, “but the lesson learned was ‘Don’t do it.'”

This misadventure, multiplied by X number of fledgling bands and X number of contending albums, explains Lookout’s financial plight: Too many of its promotional experiments — paid for by the Green Day cash cow — didn’t fare well enough to break even. Indeed, it was Dookie‘s success that set the stage for Lookout’s great philosophical debate. While Screeching Weasel ultimately drove Livermore to cash in his chips, the problem of how to spend all that Green Day scratch already had him heading for the door. “Once all the money started rolling in in 1994 and ’95, there was a lot of pressure — both from the bands and from people within the label, especially Chris and Molly — to spend way more on promo, videos, the whole deal,” he says. “I always thought most of it was a waste of money, but I had to compromise to keep the bands and other people at the label happy.”

Indeed, the tail end of Livermore’s reign was hardly an austere affair. When he abdicated in ’97, Lookout was operating its ambitious retail store and mail-order office. It was a venture both Appelgren and Livermore concede lost money in a simultaneous attempt to battle rival label Epitaph and retailer Amoeba Music.

Yet even in the punk world, the mid-’90s alt-rock boom brought a certain logic to the “spend more to make more” strategy. Post-Nirvana and Green Day, the market became flooded with indie labels, artists, and media attention that simply hadn’t existed when Larry Livermore first shook hands with Op Ivy. Young bands desperate for attention in an oversaturated and fiercely competitive national punk scene began badgering their labels for promotion. “When the band and the label are united in saying, ‘We want to do this as cheaply and economically as possible,’ then I think that’s a great situation,” Appelgren says. “If that’s not the case, and one side is trying to be economic and another side isn’t, that’s gonna be really problematic, and you have to move to a more conventional deal structure, ’cause we had to recoup some of the money we were being asked to spend.”

That pressure led to some tough decisions — in the late ’90s, for instance, Lookout switched distributors from the similarly homegrown Mordam to the more establishment-oriented, and reputedly professional, RED. This struck Michalski as a petulant abandoning-your-roots miscue, but he nonetheless echoes Appelgren’s contention that the label’s hand was all but forced by touring Lookout artists furious that they couldn’t find their CDs in out-of-town record stores.

In any event, Appelgren was on his own, because Livermore didn’t want to deal. “I was sick of it, partly because I was feeling like Lookout was turning into something very different from what I had intended, and partly because it wasn’t fun anymore,” Livermore recalls. “I loved discovering bands, starting new things, inventing new ways of getting things done. But what I didn’t enjoy was sitting in an office fielding requests and demands to spend ever-increasing amounts of money on what I thought was a foolish attempt to mimic the bloated excesses of the major labels.”

And that, for both close associates and the anonymous sea of message-board armchair quarterbacks, is the one-line criticism of Appelgren’s Lookout Records: He tried too hard to act like a major. “They started acting like they had Sony or Warner Bros.’ budget, when they didn’t,” Michalski says.

The trouble is that plenty of major-label releases also flop, despite massive expenditures on magazine ads, glitzy videos, and whatever form of surreptitious radio payola is in vogue this month. The dominant philosophy here is not exactly elegant: Throw shit at the wall and see what sticks.

As Lookout’s former accountant, Michalski has several examples of shit the label threw, both mundane and outlandish. “There’s just a billion little things that added up to big things,” he says. “The tendency to overnight everything to everybody, even when you could send it regular mail and it would get there in plenty of time. Just dumb things like that, you know? Because that somehow made them seem more important.” He also cites pricier examples of hubris, such as Lookout’s ploy to break into airline in-flight playlists, a venture that never got off the ground. “That’s so crazy,” he says. “You must have to pay a ton of money to get songs on that shit.” Michalski is particularly rankled by the label’s bumbling with regard to the Warped Tour, the summertime punk-rock roadshow that hits four dozen cities, and by the late 1990s was a necessity for any label coveting the Teenage Mall of America demographic. In 2000, Lookout dropped $50,000 to secure a booth in the festival’s power alley of merchandise and promo stands, but failed to spend the cash needed to properly stock it with giveaways. “Fifty thousand dollars will get you in the door, but you’re gonna need $250,000 or $300,000 to make an impression on all those kids,” Michalski says. “If you don’t have, like, free stickers to give away or whatever — [Lookout] didn’t have money for any of that other kind of shit once they paid to get on the tour. Epitaph and everybody’s giving away all this shit, and everybody’s ‘Woo! Hey! Epitaph,’ and, like, ‘Uhh, Lookout sucks, they had an empty booth.'”

Such escapades are clearly over. “We looked long and hard at our situation and what we would need to do for Lookout to continue and build back up to a secure, solvent business,” Appelgren wrote in an open letter posted at LookoutRecords.com. “We’re a very small business, and we had to start acting like it.”

American Teen Media Machine

All this is not to suggest that Lookout didn’t score some publicity coups in its glory days. For example, though they might’ve caused as many problems for the label as they solved, it’s hard to ignore the Donnas.

The Donnas rattle cages by design: how they look, what they play, what they represent. For Livermore, the all-female quartet is the epitome of Lookout’s wasteful, overpromoting, quasimajor ways: “They threw so much money at the Donnas, it might have been more efficient for Lookout simply to send a $15 check to every kid in America and tell them to use it to go buy a Donnas record.”

Appelgren laughs that off: “We did not spend that much money on the Donnas. I promise.” Tristin Laughter, the label’s former publicity guru and one of the six employees let go post-Green Day, concurs. “The Donnas got tons of national press and attention from almost the moment we signed them,” she writes via e-mail. “Interest in the Donnas had a lot of sources: their charisma, charm, humor, the fact that they were so young, women, they played rock ‘n’ roll, the fact that they were kind of post-feminists, the Runaways vibe, etc. etc. etc.”

Yes, et cetera. The Donnas began as four underage tarts from Palo Alto with a blatantly Ramonesy pop-punk style — dressing alike and taking the names Donna A, Donna R, Donna F, and Donna C — who dominated Lookout’s roster from 1998 (American Teenage Rock ‘n’ Roll Machine) to 2001 (The Donnas Turn 21). Horny teenagers and horny old rock critics immediately adored them — it’s entirely possible the band received more column inches of press than every other post-Green Day Lookout band combined, a media obsession that only escalated as their photos got more glamorous and their sound veered farther from the Ramones and closer to Mötley Crüe. Managed by Lookout co-owner Neuman, the band’s ascension to the majors (Atlantic released Spend the Night in 2002, which spawned the hit single “Take It Off”) and the cool-kid major leagues (a slot on 2003’s Lollapalooza tour) was inevitable, but it inevitably rankles fans of bands like Crimpshrine who find it all a bit crass.

Even the Donnas’ labelmates bitched at Appelgren, justifiably jealous at the effortless acres of magazine coverage the band farmed. Like his ex-publicist, Appelgren says he had little to do with it: “A lot of what happened to the Donnas was not because we spent more money — maybe they were more novel, but we were responding to demand. We didn’t create that demand.”

Regardless, the Donnas effectively cemented Lookout’s newfound image as a label willing to promote like a big shot and tinker with a sound some fans still hold sacred. Michael Burkett, aka Fat Mike, finds fault with both of these aspects. He’s the frontman for beloved West Coast punk band NOFX and impresario of Fat Wreck Chords, a label remarkable both for the consistency of its sound (melodic punk) and its sales goals (a couple hundred thousand units). “Thanks for saying ‘consistent,'” he cracks. “Some might say our bands all sound the same.” His ultimate aim is less ambitious than Lookout’s, but far more attainable: “We’re not a label that breaks bands,” Fat Mike notes. “We fix bands.” Indeed, Fat has worked with several Lookout defectors, including Avail and Screeching Weasel.

Burkett takes the Larry Livermore approach to promotion: Screw it. “Lookout didn’t end up making money on the Donnas, with all the money they spent,” he says. “I mean, the fuckin’ Donnas were on the cover of Spin and in Rolling Stone and shit, they were all over MTV, and they don’t even have a gold record to show for it.”

To support his anti-promo argument, Burkett cites another quasi-indie that often promotes like a major: Epitaph, the Los Angeles province of guitarist Brett Gurewitz, whose popular punk band Bad Religion provided the early revenues, enjoyed its own mid-’90s breakout band the Offspring, and has since combined Fat’s sonic consistency (plenty of Warped-ready punk acts) with Lookout’s quest for something bigger. Take the Distillers, a female-fronted scuzz-rock sensation that broke out in 2002 with Sing Sing Death House and succeeded wildly, in part because the album was promoted half to death. “Brett from Epitaph told me he spent $9 per CD marketing the Distillers [approximate list price: $13], because he thought they were gonna be big,” Burkett recalls.

Even with top-selling Fat Wreck bands such as NOFX or No Use for a Name, Fat Mike says he aims to spend around a dollar per CD in promo; Lookout’s approach under Appelgren veered closer to the Distillers model. Pansy Division’s big push also worked out to about $9 in promo per $13 disc.

As for the classic Lookout pop-punk sound best embodied by bands such as Crimpshrine and the Queers, Burkett warily eyes Appelgren’s willingness to abandon it, and cites that as one of the label’s primary faults. “They signed more garage bands. Garage bands are real hip, but they don’t sell,” he says. “They stopped signing melodic East Bay punk bands. They went for more of the guitar-driven stuff.”

The debate about how predictable a label’s sound should be is as inevitable as it is complicated; Fat Mike’s hard-line approach leaves little room for the sudden, lucrative breakout successes Lookout desired. Livermore also laments the loss of that East Bay pop-punk ideal, but most prominent indie labels have no choice but to diversify: Epitaph traditionally favors Warped-style punk but still backs cracked troubadour Tom Waits and hip-hop rabble-rousers including Sage Francis and the Coup. Seattle’s Sub Pop — the other great Lookout analogue, best known for giving Nirvana its start — eventually strayed from its grunge roots, struggled to reorient itself, and is now healthier than ever thanks to comparatively sunny indie-pop tastemakers like the Postal Service and the Shins.

In these cases, the equation is simple: Good music sells, genre be damned. But Lookout’s gambles — such as Appelgren’s own late-’90s garage band the Pattern, and this year’s indie-rock signing Hockey Night — have struggled to find audiences, and now seem like bad promotional bets regardless of sound or image. “Putting out records is fundamentally speculative,” explains Sub Pop marketing chief Chris Jacobs. “Mostly, we try to keep our expectations and our budgets reasonable so that even our small bets pay off.”

Appelgren, ultimately, has tried at every turn to avoid resting on his label’s financial and artistic laurels. “We put out these definitive bands in these styles of music, and I would like to move on and put out definitive bands in new places,” he says. “Green Day was initially not allowed to play at Gilman because they didn’t sound punk enough. And if you think about how they’ve gone on to define punk for millions of people, it’s interesting, and I’m always kinda thinking that maybe there’s something else new and exciting that can do that same thing.”

Lookout’s Austerity Plan

Lookout may be wide open for hindsight-saturated criticism, but most of the barbs are oversimplified. Despite the Donnas-style sonic experimentation, the label has always valued consistent purveyors of pop punk, from the bratty Queers to the literary wit of Mr. T Experience. And its more indie-rock dabblings have brought success — politically charged punk troubadour Ted Leo, recording as Ted Leo/Pharmacists, has released three albums and a few EPs to impressive sales and beaming accolades from the Spin/Pitchfork set. Leo, who has reinvested some of his royalties in an effort to keep Lookout afloat — “Sucker,” Michalski cracks — has nothing but praise for the label he may now have to abandon: “They have really, really, really made me feel just absolutely great about working with them, for years. And if this hadn’t happened, even without a contract, I would’ve continued to work with them.”

Even Lookout’s more vocal critics fall short of personal shots: “I think Chris and Molly and Cathy are awesome people,” Fat Mike says. “I think they’re all swell. I’ve always gotten along great with Chris. I think he’s always tried very hard.” Livermore himself admits the rules have changed completely: “When Lookout first put the modern form of punk rock on the map, it was easy, because we had almost no competition. Now there’s almost cutthroat competition from some very professional operations, and who knows if I’d be able to keep up with it if I were still in the business?”

But Larry’s criticism has been the hardest for Appelgren. When Green Day’s decision was made public, Livermore — who now resides in England and says he’s crafting his memoirs — resurfaced, and his sharp-edged message-board posts defended Green Day by trashing Lookout. Comments such as “No matter how rich a band is, they shouldn’t be expected to subsidize a failing label forever, especially when that label isn’t doing anything particularly worthwhile” made it into Pitchfork and the local press.

“When I saw those posts, I spoke to Larry — I was really upset, and I thought, ‘If you want to say something, if you have an opinion, or if you want to know really what happened, you should contact me,'” Appelgren recalls. “There was always a sense that I had something to prove to him, ’cause when he left Lookout, he thought he was leaving because it was done. One of the ideas he proposed was, ‘Why don’t we just end it? Why don’t we just stop it here? Quit while we’re ahead?’ And I felt like that wasn’t doing a service to these relationships we’d had, I felt like we were successful, and while maybe he was in his forties at the time and I was 23, I felt challenged, and I felt like I couldn’t go to him for advice or counsel. I was trying to prove to him that I could pull this off.”

Now Appelgren has a chance to shock everyone by pulling Lookout out of this mess, but it’s an enormous one: He is in considerable debt to Green Day royaltywise — “While it might not be a fortune by Green Day’s standards, by almost any other band’s (or person’s), it would be,” Livermore offers — and with no new bands and records to generate fresh interest, and income, it’s unclear how he’ll dredge up that kind of cash. “Chris says they’re gonna continue; they’re gonna release records in 2006,” Townley notes. “To be blunt, I’ll believe that when I see it.”

Lookout hopes to have its long-range battle plan in place by the end of the year. Perhaps the label will indeed break new bands and records again someday, or perhaps merely survive on sales of its still-impressive back catalogue. In the meantime, Appelgren has plenty of time — and space — to contemplate.

“I think the thing I’ve done wrong that’s clear to me is not addressing issues when they’re smaller, not addressing issues of financial shortfall before they became more and more difficult to manage,” he concludes. “I think that’s really the root of our problems. Maybe it all comes down to being a little bit naive. Or a lot naive.”

Cole Haddon contributed reporting to this story.

For a focus on Lookout’s musical evolution, see Down in Front.


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