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Capricorn Records

By Russell Hall
April 2004

In a business where executives often achieve legendary status, Capricorn Records founder Phil Walden has always been something of an anomaly. Unlike say, Jerry Wexler or Ahmet Ertegun, Walden’s achievements occurred outside the glare of the public spotlight and without lots of fanfare. Nonetheless, Walden’s impact on American music is hardly less significant than that of the figures mentioned above. Just consider: during its glory years, which basically spanned the ‘70s, albums released on Capricorn earned nine platinum album awards, seventeen gold album awards, and five gold single awards. The artists whose work garnered these sales were among the most influential of their time, and the catalogs of many of those same artists continue to generate vast revenues to this day. The Allman Brothers Band, The Marshall Tucker Band, Wet Willie, Elvin Bishop and other fathers of “Southern rock” made Capricorn a force to be reckoned with and in the process put the cities of Macon and Atlanta on the musical map. Moreover, in the span of a few short years they brought Capricorn a multi-million dollar fortune, and provided Phil Walden with enough cache to stage benefits and fundraisers which helped put Jimmy Carter in the White House.

Walden, who was born in 1940 in Greenville, SC, and grew up in Macon, began his first tentative forays into rock and roll as a student at Mercer College where he booked bands for local high school and fraternity events. He opened his first office as a sophomore and soon expanded his activities throughout the southeast. At the time he had ambitions to become an attorney, but the success of one of his first clients — a then little-known soul singer named Otis Redding — convinced him to embark on a different path. In short order he signed a number of acts and soon established himself as manager of some of the country’s finest rhythm and blues performers. In addition to Redding, these artists included Sam and Dave, Percy Sledge, Clarence Carter and Joe Simon.

“I had to learn everything on my own,” Walden said in a 1998 interview in which we spoke about the then-resurgence of Capricorn. “There were no courses in those days, correspondence or otherwise. I became friends with a man named Joe Galkin who was one of the first independent record-promotion types. As it turned out, Joe was from Macon, Georgia. His family had moved there from Russia. He had booked bands when he was in high school, and he left Macon with Tommy Tucker — one of the big bands in the old days — to become Tommy Tucker’s manager. 

“Galkin moved to New York and lived there for 30 or 40 years,” Walden continued, “and he had actually invested in a bar in New York which had gone bust. So, he had gotten back into the music business and come to Atlanta to start this whole new thing of becoming an independent promotion man. Nobody knew what an independent promotion person was at that point. Anyway, he bought the first record that I was ever associated with. We had produced a little 45 by Johnny Jenkins called “Love Twist,” and it became a regional hit. Joe Galkin bought that and put it on Atlantic Records and that opened an avenue to Atlantic [for me].”

For a time, it looked as though Walden’s musical focus would be limited to rhythm and blues acts. Following the death of Otis Redding in a plane crash in 1967, however, he switched his emphasis to rock and roll, albeit rock and rock of a type rooted deeply in Southern black music. Eventually he approached Atlantic Records vice president Jerry Wexler with the idea of building a studio in Macon. Wexler demurred, and instead suggested that Atlantic Records fund a record label to be based in Walden’s hometown. Despite initial reservations, Walden accepted the offer and after considering and rejecting such names as Macon Records and Walden Records, the two men christened the new label Capricorn.

With an advance of $70,000 from Wexler and a distribution agreement with Atlantic, Walden set out to recruit rock and roll bands. One of the first musicians to catch his attention was Duane Allman, who at the time was a little-known guitarist doing session work at Muscle Shoals Studios. Upon hearing Allman’s guitar-work on Wilson Pickett’s version of “Hey Jude,” Walden become determined to sign him and build a band around him. After some personnel shuffling, in 1970 the Allman Brothers Band was formed.

“We brought Jaimoe [Johnson] in,” said Walden, in the 1998 interview, “and we did some early recordings that didn’t result in the formation of the Allman Brothers Band. Later we used some of those cuts on the Duane Allman Anthology album and Lamar Williams was the bass player on that. But things went forward and after the band came together we still didn’t have a singer. Gregg was on the West coast and he didn’t join the band for several weeks or maybe even for a couple of months. When he did come [in] he sounded great, of course, but even after Gregg got there, if the Allman Brothers played an hour set probably forty minutes of it would be instrumental. For a lot of people the vocals were afterthoughts, to break up the monotony of all that music. I thought they sounded spectacular.”


“For the first date outside the south,” Walden continued, “I booked them at the Boston Tea Party, where they opened for the Velvet Underground. That was an odd pairing. I got all the major agents to come up and they all had a little critique afterwards. Most of the agents, I think, didn’t really understand what the band was trying to do musically. Most of those guys, at the time, were into bands like the Who or other English groups. In fact, the comments I heard that night were things like, ‘You know, you ought to dress up those guys a bit.’ And I remember Duane made one of his classic remarks, which was, ‘You know, if you wanna go to a fashion show I suggest you go to the garment district. But if you want to hear rock ‘n’ roll music, you shouldn’t be too concerned about what we’re wearing.’ Other agents looked at Gregg and said, ‘There’s only one real good-looking guy in the band, and you’ve got him stuck behind the organ. Can you get him to come out at least on one number — get him to fall down on his knees or something?’ The band was all assembled in the dressing room when that was suggested and Duane just sort of let out a sigh and said, ‘Same old shit, man. Same old shit.’”

Although, according to Walden, The Allman Brothers Band’s first album sold only about 33,000 copies, the group quickly established itself as one of rock’s most exciting live acts. The band’s relentless tour schedule, which often included free shows, earned them a dedicated following. Following the release of a second studio album which sold only moderately better than the first, the Allmans released one of the best live albums in the history of rock and roll. A double album set, At Fillmore East captured a great band at the height of its powers. Moreover, it set a perfect standard for all subsequent live albums. In the aftermath of its success, countless groups tried to commit to vinyl their own versions of the Allmans’ stage magic, but few came close to matching such power. Looking back, Walden was amused by the reluctance among the powers-that-be to release a double album.

“I don’t think anyone could’ve predicted the extent of its success,” he said, “but we were counting heavily on it. We had been through numerous negotiations with Jerry Wexler at Atlantic to let us do a double album of all those long cuts. Wexler wanted us to edit the release down to a single album and he was adamant about that. He said we couldn’t afford to put out a double album by this band. At that point, the top selling album [by the Allman Brothers Band] had probably come in at about 100,000 copies, so Jerry was of the mind that, with a double album, we wouldn’t be able to pay the publisher and whatnot because this was just a developing group.”

Walden continued: “Finally, he said we could do it if we made a deal with the publisher. So we did that, but then we hit him with our other news, which was that we wanted to sell this double album for $6.98. A single album was $6.98 in those days; $8.98 and $9.98 were the double album prices. But we insisted on this because . . . in a subtle way we were trying to suggest that the Allman Brothers Band was the people’s band, and we wanted the album to carry a price tag they could afford. After we got all those folks to agree with us, [the set] debuted at about 65 on the Billboard charts that first week, and started a whole gang of imitators. I can’t tell you how many double live $6.98 albums came out after that. But I think [At Fillmore East] remains one of the finest live albums ever made in its conception and its execution. It’s one of the foundation albums of modern music, in my opinion.”

Having established the Allman Brothers Band as the label’s cornerstone, Walden began assembling a roster of artists on Capricorn that, as with the soul artists he managed in the ‘60s, reflected his gifts for recognizing, recruiting and developing new rock and roll talent. By the mid ‘70s, the Capricorn family included such luminaries as the Marshall Tucker Band, Wet Willie and Elvin Bishop, each of whom released singles that went gold during this period. According to Allman Brothers Band biographer Scott Freeman, by 1974 Walden’s estimated net worth was $5 million — this at the ripe old age of thirty-four. Moreover, the success of Capricorn inspired rival labels to embark on their own searches for bands that exemplified the “southern” sound identified with Capricorn. Among the groups that rose to prominence at this time were ZZ Top, the Charlie Daniels Band, and Lynyrd Skynyrd — who, incidentally, were managed by Walden’s brother, Alan. Although none of these acts were Capricorn artists, each owed a considerable debt to the Allman Brothers and the Marshall Tucker Band.

As phenomenal as the label’s rise had been, however, its demise was to be nearly as spectacular. In view of its prestige, the collapse of Capricorn in 1979 was brutal and shocking in its swiftness. Plagued by financial difficulties — in part due to the break-up of the Allman Brothers Band in 1978 — Walden signed a distribution agreement with Polygram Records that netted Capricorn a much-needed $1.5 million advance. Then, according to Freeman, Polygram loaned the label another $2 million, specifying that all assets owned by Capricorn serve as collateral. As fate would have it, the 1979 recession hit the record industry especially hard, prompting Polygram to demand its money back. As a result, Capricorn was forced into bankruptcy, and Walden went into a personal tailspin. Already beset by burgeoning problems with substance abuse, the then 39-year-old old executive sank into a bleary, chemically-addled subsistence that lasted several years.

“The Chapter 11 bankruptcy certainly took a lot of the wind out of my sails,” he said, “but then again I complicated the problem. Toward the end of ‘79 and into ‘80, a cocaine habit I had really came to the fore. I didn’t have anything else to do other than indulge myself in that habit. I didn’t handle that situation very well. Emotionally, [the bankruptcy] was much more difficult to overcome than I thought it would be. My drinking increased, my drug intake increased, and I was ill suited to make a deal with anybody. That was especially disappointing, because when I went into the bankruptcy proceedings with Capricorn initially, various primary players within the industry had contacted me about setting up new deals — new arrangements — to get me through the Chapter 11 thing. [The plan was] to hit the ground on the other side of the proceedings, whereby I would be ready to go into a new situation, and would maybe have some lateral movement as opposed to going back and starting the whole thing over again. Obviously I should not have trusted my own judgment at that point, though, because I was too influenced by chemicals.”

No deal was forthcoming, and Walden disappeared from the scene, essentially settling into a lengthy period of inactivity and depression. In late 1984, he somehow summoned up the wherewithal to move from Macon to Nashville, ostensibly with the intent of starting a new record label. Instead, three additional years were spent salving his wounds with drugs and alcohol. Separated from his wife and family, completely broke, and living in a small efficiency apartment, Walden simply waited with the unrealistic expectation that someone would, as he puts it, “come in with a multi-million dollar, complex deal to restart Capricorn.” Finally, on December 30, 1987, he made a commitment to himself to become clean and sober, and began attending Alcoholics Anonymous. The decision to cease the substance abuse was comparable to awakening from a long slumber and forced him to confront some harsh realities.

“I was assured that, by becoming clean and sober, everything was going to be righted in a matter of weeks,” he said. “There’s a wonderful thing about getting clean and sober. After about thirty days, you begin to see those sunny skies and everything, but then the other side of that sword is that you realize the extent to which you’ve alienated yourself from people. I had alienated myself from all those within this industry that I was anxious to be a part of again. There just wasn’t any deal.”

Walden continued: “So I started making my little trips to New York and to LA to talk with various majors about resurrecting Capricorn. These were all incredible meetings. Everybody would sit around and talk about what we had created, and about how special Capricorn was, and about what a special niche the label had in the recording history of America. But there was never a deal. I would surmise from that that there were those who still didn’t trust my sobriety. It took me some time to try to rebuild my reputation within the record industry.”

Phil Wlden and Gregg Allman at Capricorn

Ultimately, help came from an odd and unexpected source. The late actor/comic Jim Varney, of Ernest Goes To Camp fame, was living in Nashville at the time. A mutual friend arranged a meeting between Walden and Varney, the latter of whom was dissatisfied with his management contract. Walden offered to try to work out a settlement on the actor’s behalf that would free Varney from his contract, and eventually an agreement was reached. Suddenly Walden found himself with his first client since the demise of Capricorn. Later Walden said he considered the four years he served as Varney’s manager as some of the most crucial of his career, and he recalled the actor fondly.

“He certainly saved my life, and I’m eternally grateful to Jim,” he said. “It was a good relationship for both of us and one I enjoyed. But it was not the music business. And I think it was during this period that I began to realize how much this industry means to me, how much a part of my life it had become. I sincerely missed it. I missed the competition, I missed the excitement of discovering someone new, and I even missed those processes of bringing someone to the public’s attention.”

As it turned out, the man who paved the way for Walden to re-enter the music profession was perhaps the industry’s most respected executive. In his role as Jim Varney’s representative, Walden often traveled from Nashville to Los Angeles in order to meet with the actor’s agent and executives at Walt Disney. In early 1990, Walden began taking advantage of these trips to meet with Lee Phillips, a record industry attorney who had represented Walden in the ‘70s. On one of these visits, Walden presented Phillips with a business plan that outlined a proposed resurrection of Capricorn Records. Phillips, in turn, scheduled a lunch date with Warner Brothers president Mo Ostin, and presented Ostin with a synopsis of Walden’s idea. Contrasting with Walden’s fears, Ostin had fond memories of his relationship with Capricorn. Subsequently, Walden began meeting regularly with Ostin, and he soon presented the Warner Brothers executive with a business proposal. After nine months, a deal was struck whereby Warner Brothers would help finance the rebuilding of Capricorn.

“What Mo was doing,” Walden said of this period, “was bringing me up to date. So many things had happened between 1979 and 1990. When I got out off the business at the end of the ‘70s, the compact disc was not even a factor. Video was just starting to play a role, but it wasn’t a major factor. A lot had changed, and on each trip I made out to LA, Mo would send me into a different department where I would spend several hours with various folks. I would report back to him, then come back out and go to another department.

“This started in July or August of 1990,” Walden continued, “and then the first week in December Mo called me into a meeting and said he was going away to Aspen for the month. And I thought, ‘Oh my God, that means I’m not going to get an answer about whether he’s going to do a deal with me or not before Christmas.’ So it was a long holiday season, and then after the holidays Mo came back and [Warner Brothers] had all their budget meetings. The first several weeks of January were taken up with that, and I was really starting to get nervous. And then the damn Gulf War broke out. I thought, ‘Well that’s it. It’s all over with, the deal’s not going to happen.’ Nobody knew what the hell was going to happen. But we survived that, and it was around March that we had a long meeting and sort of brought everything together. But Mo really stunned me. He said a lot of folks felt that there were just too many of these start-up labels. 1989 and 1990 was a time when everybody was trying to start new companies and do the same thing David Geffen had done and become billionaires.”

Years later, Walden continued to speak of the former Warner Brothers executive in glowing terms. “Mo Ostin is the finest single individual to be involved in the record industry anywhere in the world,” he said. “Mo should be everyone’s role model. He’s the guy who combined business and music in a way that’s never been matched by any other record company executive.”

Operating from its new base in Nashville, the resurrected Capricorn began a steady climb toward becoming a viable label, primarily by focusing on exciting young groups who were willing to take a long view regarding their careers. In August of 1991, a debut album by Athens, Georgia’s Widespread Panic began hitting the stores, becoming the first new release to bear the Capricorn logo in more than a decade. Three years later, in 1994, the new version of Capricorn began turning a profit. That same year, however, in a portentous development, Warner Brothers decided not to renew its contract with the label, a decision that by chance coincided with Mo Ostin’s departure. Before Ostin left, however, he made certain that Warner Brothers financed Capricorn for an additional fiscal quarter, a magnanimous gesture that helped enable Capricorn to break away from Warners with its inventory and licensing intact.

Implementing a patient, methodical approach toward recruitment and development, the label went on to establish a roster of artists that came to total nearly 20 bands. At a time when major labels tended to drop new artists if their first couple of albums failed to produce profits, Capricorn stood in contrast to the prevailing here today, gone tomorrow philosophy. In addition to the growing success of Widespread Panic, the company was buoyed by two promising young bands — Cake and 311 — who achieved platinum sales. At the time, Walden put forth his own philosophy in succinct terms.

“From an industry standpoint,” he said, “we are continually looking at the artists’ side of the situation, which is something we should always have done. And I think the artists’ situation continues to be improved. I hope, in fact, that if I leave any sort of legacy to [the industry], it’s that we were able to improve the way artists can operate within the business side of their careers.”

Notwithstanding Walden’s good intentions, and the promise of its young roster, by 1996 Capricorn once again found itself in turbulent financial waters. To generate an influx of cash, Walden sold half the company to Polygram/Mercury, the label that had received all the Capricorn master tapes in the bankruptcy of 1980. As part of an agreement with Polygram executive Danny Goldberg, a clause was inserted in the contract which stated that Polygram would, in good faith, negotiate to return Capricorn’s ‘70s catalog to its former owner. As a result, in what Walden described as an honorable and righteous decision by Polygram, in 1997 the catalog reverted back to Capricorn. This arrangement soon bore fruit for consumers, as 1997 saw the reissue of seminal, long-out-of-print works by the likes of Johnny Jenkins, Captain Beyond, Sea Level, Wet Willie, and Bonnie Bramlett. And indeed, for a time it appeared the ‘90s version of Capricorn was on course to approximate the dizzying heights of the ‘70s.

Flush with success, Walden relocated the company from Nashville to his beloved Atlanta, where the music industry was booming. Soon, however, what appeared to be a burgeoning empire began to crumble. In addition to overextending itself financially, Capricorn suffered a major blow in 1999, when Polygram Records was bought out by Universal. As part of a downsizing process, the conglomerate ousted Goldberg, who had been one of Capricorn’s most vociferous patrons. Although Universal was contractually obligated to honor the Polygram arrangement, the new company gave Capricorn low priority with regard to promotion and distribution. Adding to the crisis was the fact that the contracts for two of the label’s biggest acts — Cake and Widespread Panic — were set to expire. A valiant attempt was made to resign both bands — and to find new investor-benefactors — but in the end all deals fell through.

Thus it came to pass that Walden sold most of Capricorn’s assets — including the classic back catalog — to New York-based Volcano Records, a division of BMG. A clause in the agreement stipulated that the Walden family would refrain from using the Capricorn name for a period of five years. Meanwhile, like the proverbial Phoenix rising form the ashes, Walden went on to form Velocette Records, home to such alternative acts as Beulah and the Glands. Operations at the label are currently headed by Walden’s nephew, Jason, and his daughter, Amantha, but that, as they say, is a whole other story.

As for Walden himself, since undergoing major surgery two years ago the Capricorn founder has maintained a relatively low profile. Even if he chooses to remain in semi-retirement, however, the extent of his contribution to American music will always be incalculable. Several years ago, contemplating the twists and turns of his remarkable career, he expressed a modest philosophy that could be applied to most any profession. 

“For me, what has made my life and career interesting has been my relationships with people,” he said. “It’s just been one incredible and unique relationship after another. I’ve never produced a single record in my life, and I don’t intend to ever produce a record. I don’t play an instrument, I don’t write songs, but I enjoy what I do. I think I’ve got the best job of anybody in the whole world.” 

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