The History of Stax Records

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Jim Stewart initially founded a record label called Satellite Records in 1957 - his sister Estelle Axton came on board the following year. As Satellite, the pair negotiated a distribution deal with Atlantic Records and had minor success with the Last Night by the Mar-Keys.

After discovering that there was already a label with the name Satellite Records, Stewart and Axton renamed their label Stax Records. The name wasn't the only thing to change in the early days. Although the label was started as a country label, the changing face of Stewart's neighborhood sparked an interest in R&B music, and the label swapped genres.

The Basics

  • What: Record label Stax Records
  • Where: Memphis, TN, USA (founding city)
  • Founded by: Jim Stewart and Estelle Axton
  • Founded: 1957
  • Closed: 1978 (although the company name and catalog was acquired by Concord Music Group in 2004 and the imprint is being used for some new releases)

Stax HQ

Stax Records' home base was an old theater in South Memphis, TN, which served as label business headquarters as well as a recording studio and record shop (which was still run under the name Satellite Records). Until the mid-1970s, nearly all of the label's hits were recorded in this studio, with house band Booker T. and the MGs (who became stars in their right).

It is the converted theater itself that some credit for the signature Stax Records sound. The floors were sloped to allow for auditorium style seating, creating a unique acoustic environment for recording.

Gulf and Western Deal

By 1968, Stax had enjoyed several successes and attracted the attention of Gulf and Western (a major conglomeration group at the time), who bought the label that year. Axton sold her share, Stewart retained his share but stepped out of the day to day running of the business, and Al Bell, label PR director, took the reins. The distribution deal with Atlantic was terminated at this time as well. In many ways, it was the beginning of the end. See more info below about the story behind the Gulf and Western deal.

Stax Records Subsidiaries

After being rocked by the 1950s payola scandals, radio stations in the 1960s were very careful about playing too many records by any one record label. For this reason, it was very common during this time for labels to start "subsidiary" labels - which essentially amounted to releasing an album through the main label with the name of another label on the album jacket. Stax had a number of these labels, including:

  • Hip
  • Volt (home of Otis Redding)
  • Chalice
  • Enterprise

All of the music on these labels was owned by Stax.

Good-bye Stax Records

Although Stax had some major successes in the 1970s while operating as an independent label—most notably with Isaac Hayes and their Wattstax Festival (which also featured Richard Pryor)—it never recovered from the loss of the Atlantic deal. Gulf and Western knew little about running a label and severely mismanaged the business. Despite the successes of Hayes, Wattstax, and some other Stax releases, Gulf and Western never capitalized on them, and the label went bankrupt. In 1975, Stax called it a day.

In the final days, Stewart remortgaged his home to keep the label alive—he lost it when the label collapsed.

Stax Catalog and Reappearance of the Label

After Stax had gone bankrupt, the back catalog of the label and the Stax name was bought by Fantasy Records, who released albums under the imprint until they sold their rights to Concord in 2004. Concord continues to use the imprint. The catalog that was kept by Atlantic (see more info below) remains under their control, though some albums have been licensed to Rhino Records.

Stax Records Artists

Some of the artists to release music on Stax over the years include:

  • Isaac Hayes
  • Otis Redding
  • Rufus Thomas
  • Johnnie Taylor
  • Albert King
  • The Staple Singers

Gulf and Western, Atlantic Records, and One Bad Contract

Atlantic Record's Jerry Wexler was a huge Stax Records fan and worked closely with the label throughout the 1960s (he even insisted some Atlantic artists record in Stax to get the signature sound). The distribution relationship between Stax and Atlantic seemed to be a good one until Warner bought Atlantic.

There was a clause in the Stax/Atlantic deal that terminated the agreement if Atlantic was bought by another company. It was at this point that Stewart found out the downside of the contract he had signed with Atlantic. The contract stipulated that Atlantic - not Stax - owned the masters to the albums they distributed. So, when the deal between them ended, Atlantic was left holding most of Stax's biggest hits.

In the wake of losing their masters, Stax lost the biggest artist on their label at that point, Otis Redding. Redding died in a plane crash just four days after he recorded the song that would go on to be his biggest hit - Sitting on the Dock of a Bay. Without their masters and their biggest star, the financial outlook for Stax was bleak, which is how Gulf and Western managed to get a hold of Axton's share of the label and get Stewart to take a back seat role (as well as giving up some of his shares).

There was one point in which it looked like the label might be saved by a distribution deal with CBS, thanks to Clive Davis, but CBS got rid of Davis shortly after he signed the Stax deal, and they never followed through after Davis was gone.

It's fairly astonishing that Gulf and Western allowed the label to go bankrupt at the same time Isaac Hayes came on board, but that is what happened. Stewart and Bell tried frantically to save their label, without help from Gulf and Western and gambled their homes and personal financial future. They lost, and as was previously mentioned, Stewart lost his home when the label went under.

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