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Then, history began to repeat itself. Walden, flush with sales for the first time in two decades, purchased a $2 million-plus house, a 1926 design by noted Atlanta architect Neel Reid, on Buckhead's exclusive Habersham Road and set about an extensive expansion and remodeling. Next came the downtown building, large enough for a staff that swelled to 42 by the end of 1998.
"Buildings were purchased, big moves, all the cars, the house," says Widespread Panic manager Buck Williams, who had worked for Walden in the '70s. "I bet I've said it a 100 times, 'I have seen this movie before. I already know the ending.'"
Clouds began forming in early '99 when Polygram was purchased by Universal Music, another huge conglomerate of record labels. In the process of streamlining the two companies to avoid overlap, thousands of music-industry employees lost their jobs, including Capricorn's patron, Goldberg. Venerable labels such as Geffen, A&M and, eventually, Mercury were shut down.
Though Universal was contractually bound to honor the Capricorn deal it inherited from Mercury, Capricorn's releases were not a priority in terms of promotion and distribution. "The new regime was playing with a totally different kind of economics," Goldberg says. "They were in a heavy cost-cutting mode to satisfy the stock market. And Phil didn't really have the relationship with people there that he did with me. And I just don't think they wanted to be in the joint-venture business. He happened to enter a time when the model he had was out of fashion."
The Waldens were eager to buy back Universal's share of Capricorn and move somewhere else, but their timing couldn't have been worse. Through 1999 and 2000, overall sales were declining as the popularity of the label's biggest act, 311, waned. Meanwhile, the recording contracts of Capricorn's other two big sellers, Cake and Widespread Panic, both were expiring.
As the Waldens tried to find a new corporate benefactor to invest in the label and distribute its records, they found themselves in a Catch-22: To attract an investor, Capricorn had to demonstrate future sales potential by re-signing its top acts. But to re-sign its top acts, it had to convince the bands to forgo offers from larger, more secure companies so they could stay with a label in limbo.
"I knocked on every door in the business trying to do a joint-venture deal with Capricorn, and it was not out there," says Mike Bone, who at that time was the company's general manager. "People didn't want to do a deal with Capricorn."
With Widespread Panic soon signed to Sanctuary Records, and Cake inking with Sony, the possibility of finding a good deal began to dwindle. Then, last August, 311 -- convinced their declining sales reflected something other than the natural arc of the band's popularity -- filed suit against Capricorn to gain release from the label.
Capricorn continued to release albums, including the debuts by Athens bands Jucifer and The Glands, both signed by Phil's nephew Jason Walden, the latest relative to join the company. But with Universal aware of, even encouraging, Capricorn's plans to break away, the larger company had little incentive to push those records into stores, despite excellent critical reception. With no other option, Capricorn began laying off its employees. "We tried to keep things going," Philip Jr. says. "We kept our staff on as long as we could."
The Waldens tried to treat departing employees with the same respect and loyalty they'd given the extended family that attended Capricorn Picnics back in the '70s. As the staff dwindled down to 10 by last fall, workers were sent home with their computers. "We bent over backward to make people leave here feeling good about the way things happened," Phil Jr. says. "In the grand scheme, that computer doesn't mean shit to me, but if you just lost your job, you probably need it."
As they had before, the Waldens as individuals managed to retain the respect of their bands, even when the company failed to deliver. Jack Logan, whose sole Capricorn release in 1999 sold dismally, says, "Of the record companies I've dealt with in the past, Philip [Jr.] is the only guy that didn't strike me as being totally full of shit. He completely told me what he thought about stuff. He came through on the stuff he said he could do, and other stuff he said he couldn't do."
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