Following up our earlier story on the label's financial troubles and loss of the early Green Day catalog, Lookout! Records president Chris Appelgren has posted an open letter on the label's website detailing the situation.
An Open Letter From Label Prez Chris Appelgren
By now most of you that visit the Lookout Records site are aware of something happening here at the label and I'd like to take this time to let you know a few things and really set the record straight if I can.
There are a lot of questions about the future of Lookout so I want to say the following. Lookout Records is not going under or closing up shop. We are however making some significant changes. After over 16 years of operating, Lookout has gotten to be quite an operation. We have a staff, a building, big shelves, desks, computers, shipping materials, fax machines and bunches of records and CDs laying around. That translates into a lot of expense every month and frankly we haven't been selling enough records to cover all these costs. Top that with some of the bad business decisions we've made and you have an understanding of how we got to where we are.
Want examples? Without getting into specifics it was acquiring labels, maintaining our new release schedule, signing bands while not giving enough attention to financial concerns that were not going away. Bad decisions and poor judgement came into play - most strikingly in hoping that things would all somehow magically work out, that the shortcomings in operating income and the fact that our new bands were not selling as many records as we hoped would all somehow just turn out okay on their own if we just kept working hard and doing the best job we could.
Not all of our decisions were bad and we honestly tried to turn things around, enjoying some great successes too including some incredible releases and a great celebration of 15 years of business in 2003. But the bottom line didn't change despite modest upturns in our sales. My two partners often had a better sense of our problems than I did - I was the source of the naive hope in some of our internal discussions. I probably owe Cathy & Molly an apology for my problem-solving always relying on a big dose of pure luck. We got behind in payments as money that was due to artists was used to maintain our business or in some cases fund new releases. We were in touch with a good deal of our bands as this was happening - although not everyone - and many were understanding and willing to bear with us and this hopefully brief downturn in business, including Green Day.
But the downturn was not brief and as has been reported all over, Green Day has decided that they can't bear with us any longer and are taking control of their Lookout albums. They hung in there with us through thick and thin but now it's time to move on. It has not been a battle and, however insincere it may have seemed in the light of all the hubub, our statement about friendship, respect and trust between Lookout and Green Day is accurate. They're one of the greatest bands in the world and we had a relationship with them that lasted longer than many major labels deals do. That's something to be proud of even in the face of the truth that it could have continued had Lookout made some different decisions about our own business.
Coming to this decision and looking at what it meant was a huge wake-up call. I sat down with my two partners to assess what this would mean for Lookout and a few things were very clear. It was high time to make some hard decisions about how Lookout will exist in the future. It was also time for us to get to work on meeting our current and past due obligations before we take on any more. The changes we looked at were not because Lookout would no longer have Green Day's first two albums but had to happen because our business was not healthy. Green Day's decision was a result of our internal problems not a cause.
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. It was clear we had to let our staff go, relocate into a smaller office space and hold off on any new releases. We're a very small business and we had to start acting like it.
It is heartbreaking that the team that has been Lookout Records will no longer be here working with each other day to day. This is a good opportunity to say thank you to Tristin, Erin, Taggylee, Todd, Patrick, Lisa and Ben for all your time, energy and spirit. The contribution that each of you has made to this company is indelible and I appreciate the years you have given to Lookout Records - Todd and Erin over five years each; Tristin over eight; Patrick, something like fifteen - but each day that everyone of you was here means a lot. We weren't perfect but we worked hard because we cared about what we were doing and we pulled off some pretty incredible things along the way.
Things are going to change. In fact they have already started to. We're tightening our belts and getting to work to meet our obligations, do right by our bands and partners, our supporters and even our detractors. I've never particularly been good at taking advice but now more than ever I need to listen to my friends and peers and learn from my mistakes.