Is K Records a 'Broken, Sinking Ship'? Legendary Olympia Label Struggles to Stay Afloat as Kimya Dawson and Other Artists Demand Unpaid Royalties

Disputes over royalties are a common issue for all record labels, but news of issues like this at K, which is anything but common, is disconcerting.

Olympia-based K Records—a bastion of DIY indie music since 1982—lately has been weathering some harsh criticism from its former artists, particularly singer-songwriter Kimya Dawson.

The ex–Moldy Peaches vocalist and popular solo artist Dawson started a thread on her Facebook page on January 10 in which she proclaimed, "If I unfriended you it might be because you associate with Calvin Johnson and it makes me fucking ill every time pictures of him pop up in my feed."

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This update spurred a litany of complaints about Johnson, K Records' owner and iconic singer/guitarist for Beat Happening, Dub Narcotic Sound System, and other bands.

Other artists and the label's former co-owner soon piled on with stories alleging financial misbehavior. Nobody in the long thread had much positive to say about the man whom many indie-music fans consider to be a major catalyst of the international pop underground and the twee aesthetic in indie rock. (Melissa Mescalero has written extensively about K Records' alleged mistreatment of its artists on the Teenage Hotdog blog.)

Dawson's extensive Facebook posts (which I quote with her permission) recounted her increasing anger upon learning that an estimate she'd been given by the label "was a good six figures under what they actually owe me. They owe a ton of people money and I bet most of those people have no idea."

She went on to note that a payment plan had been "set up by musicians because K never took the initiative to get their accounting in order and figure it out on their own"—but that it has proven insufficient.

"At the rate that they are making payments," she wrote, "I will maybe be paid off in 30 years."

For a long time, it was considered taboo for independent musicians, especially in the somewhat utopian orbit of Olympia punk, to discuss their finances in public. But as the music business has declined, so has the stigma surrounding the subject. Dawson addressed it directly:

"Do I make music for the money?" she wrote. "Absolutely not. If the music I make sells do I want the money that is rightfully mine? Absolutely yes. People don't speak up because they get accused of all kinds of shit when they do. I just can't even handle people talking about how super rad K is when it's a broken sinking ship."

"BEYOND NEGLIGENT"

For his part, Calvin Johnson said in an e-mail to me that he's paid Kimya Dawson "almost $200,000 in royalties from K since we started working with her. This doesn't excuse any tardy payments on our part, but it does show K has not entirely neglected her."

Presented with this information, Dawson wondered how much of that money came from Rhino licensing material she contributed to the film and soundtrack album of Juno—her commercial breakthrough—and how much from K. She indicate that funds from Rhino "don't count" toward what K owes her.

When I relayed this to Johnson, he insisted that income from all sources are considered equal.

"It counts!" he asserted in a phone interview, sounding incensed. "So I don't understand the statement. We do owe her some money. When I say that she has received $200,000, I don't mean we paid her $200,000. She's received the equivalent" in the form of CDs and LPs she's taken to sell on her many tours.

Despite the years of mounting frustration evident in Dawson's words on Facebook, she says she doesn't want to engage the label in "a vengeful battle," as it would hurt all K acts. Her outrage on her labelmates' behalf is palpable. "That is something else that kills me," she wrote. "Thinking about people who feel like they haven't sold anything who maybe actually did. What does that do to your morale? Are there people who stopped making music because they thought no one was listening?"

Dawson recommended I speak to some other artists who she said also had grievances with the label. One of them, Phil Elverum of Mount Eerie and the Microphones said: "Yes, it's true that [K owes] me a bunch of money and that communication about this over the years has been pretty difficult. But lately there have been some real efforts to fix it and pay the back payments. I was able to get my albums back and self-release them a few years ago, so at least the debt isn't increasing anymore." Citing time constraints due to family problems, Elverum didn't feel comfortable expounding on the matter.

And then there's Jared Warren of beloved Northwest post-hardcore band KARP. His anger may even surpass Dawson's. In an e-mail interview with me, he said K owes KARP a large sum of money, with payments arriving inconsistently over the last 18 years—but only after badgering Johnson for them.

"Calvin Johnson approached me a few years back with a ridiculous plan to pay back royalties," Warren said. "It involved selling KARP shirts on their website for $15, with $1 per shirt going toward payment of royalties they already owed us. I guess he thought they would then keep the rest of the money from the shirts sold and that was all supposed to make sense. It was infuriating and insulting, especially coming from someone who condemns the 'corporate ogre' and extols the virtues of a DIY ethic."

Johnson says the T-shirt deal is something he offers to all K artists; he also acknowledges that this money is separate from proper royalties.

"We do owe [KARP] a few thousand dollars, but we have also been paying [Warren] over the years," Johnson says. "There may have been some delays in the payments, and I have apologized to him directly."

It doesn't sound like Warren accepts the apology.

"They are beyond negligent," he told me. "They have knowingly kept money that didn't belong to them for many years."

Warren credits Dawson and other former K acts' outspokenness on the issue as the catalyst for the company to begin selling its assets, including closing Johnson's Dub Narcotic Studio, but said that he believes a comprehensive solution may be impossible.

"It's my understanding that their debt to artists exceeds the probable value of their assets," Warren says. "I can only express my anger and disappointment and hope their conscience compels them to do whatever they need to do in order to settle their debt with people they owe."

"We had some bookkeeping problems," Johnson admits. "But we're trying to straighten those out."

"BLATANT DISREGARD"

Johnson's former business partner Candice Pedersen weighed in, too. She left the company in 1999 on bad terms after working at K for more than 13 years. She alleges that Johnson cheated her out of her share of the 50/50 split of earnings they'd agreed upon in a handshake deal.

"This is new to me," said Johnson of Pedersen's claim. "One could wonder is Calvin clever enough to pull such a stunt?"

Commiserating with Dawson on Facebook, Pedersen said (again, I'm quoting with her permission): "Had I not threatened to expose Calvin's reneging on our agreement to be equal partners, our payment plan would have gone on for 20+ years... Considering the fact that bands starting contacting me as early as late 1999, this has been a 17-year problem that Calvin has not really taken accountability for... It's a blatant disregard for the value of the work artists provide."

Asked to comment on these accusations, Johnson conceded via e-mail: "Payments may have been spotty and inconsistent, but we have been paying artists' royalties. Unfortunately not what has been due and we readily acknowledge that. We have had different payment plans with different artists over the past several years. In many cases, artists' royalties have been exchanged for copies of releases to sell on tour, a common practice with independent labels. This works well for both parties as the artist can double the amount due to them (depending on the retail price they set)."

Problems arise, Johnson says, when artists decide to stop touring. The label incurs risk, too, he said, if the artists take more product than they earn in royalties. Such miscalculations have resulted in artists going into debt with the label.

"K is currently owed more than $90,000 for invoices of this nature," Johnson says.

With music-industry revenues in a downward spiral, indie labels like K will make alternative, in-kind arrangements, such as making payments toward artists' student loans or health insurance. "Sometimes this works well," Johnson says, "sometimes not so. But either way, we have been responsive to artists' concerns and attempted resolution."

"ALWAYS HATED HAVING TO BE A BUSINESSMAN"

K artist Arrington de Dionyso, who records experimental music under his own name and heads the Indonesian-influenced garage-rock band Malaikat Dan Singa, shed more light on the plight of musicians toiling for a small independent label in an e-mail interview.

"K owes many thousands of dollars to around half a dozen solo artists who saw their careers explode and take off while recording, releasing records, and touring under the K banner. Many more artists actually owe money to K. I personally owe many thousands of dollars, and I make payments on this debt when I am able to do so."

"The conditions in the 1990s and early 2000s that allowed an independent music scene to flourish both creatively and economically simply do not exist anymore. In the early 2000s, many bands working with K were allowed to take as much merch as needed for national and international tours on the good faith that the project would inevitably recoup the production expenses by sales through the network of record stores, distributors, and mail order that kept the indie machine churning. So if you sold a lot of merch on tour, you could keep that money as long as the label was able to get reimbursed for production expenses by sales through those other channels. For a touring artist habituated to subsistence living, this was by far the best deal around and definitely in favor of the artist. For a new release of one of my albums, chances are that between 30 to 50 percent of the total pressing would be sold by me personally at a show on tour. I think the situation became a little more complicated for the few artists who reached a higher level of success."

The decline of the culture of record buying, de Dionyso observes, has forced K to scramble to bring in enough money to pay its artists. Streaming income currently isn't making up for lost sales. He suggests that K's "DIY Empire" could have thrived only in the 1980s and '90s, before the proliferation of streaming and illegal downloading. He allows, however, that K might not have been sufficiently savvy about the marketplace's evolving habits.

"I think that secretly or not so secretly, Calvin has always hated having to be a businessman," said de Dionyso. He's far too generous to be very good at playing that game."

Johnson's longtime friend Steve Fisk, who has produced and played on many albums for the label's artists, and who has also endured maddening experiences with three other labels, agrees with de Dionyso's assessment. "Calvin and K have always treated me fairly," Fisk says. "They don't owe me a dime."

Pedersen has a one-word response.

"Many will say, 'Oh, he's an artist, he's bad at business,'" she wrote on Dawson's Facebook page. "'Oh, Calvin doesn't mean to leave bands wanting.' To that I say bullshit."

"WE DON'T HAVE ANY MONEY"

It's worth pausing to consider what K Records represents in terms of Northwest music. Much like Calvin Johnson himself, K has long been regarded as a paragon of indie culture and a working model of how truly independent music can thrive free from the constraints associated with major labels.

The label's slogan, "Exploding the teenage underground into passionate revolt against the corporate ogre world-wide since 1982," may have a tongue-in-cheek tone, but its commitment to the underlying principle has inspired generations of music lovers. The records and singles it has released—from Johnson's band Beat Happening, Beck, KARP, Tiger Trap, Some Velvet Sidewalk, the Make-Up, Girl Trouble, Modest Mouse, among many, many others—helped to frame the evolutionary possibilities of punk and indie music, in contrast to both the mainstream and, perhaps more crucially, to the increasingly palatable strain of commercial alternative music.

According to de Dionyso, regardless of whatever legitimate beef people may have with Johnson, "There is no single person who has consistently breathed more life into the Olympia music scene, creating an infrastructure for independent music here (and networks around the world) that several generations have already taken for granted as an inalienable 'right.'"

In Our Band Could Be Your Life, Michael Azerrad wrote, "In some ways it seemed Johnson's role bordered on cult leader." And let's not forget that tattoo of K's shield logo on Kurt Cobain's forearm. In short, this is not just another indie label struggling to make it.

Sub Pop's occasional failure to pay the bills has been part of the label's in-joke narrative all along—they once famously spent money to make T-shirts that read "What part of 'We don't have any money' don't you understand?" But somehow, the news that K Records owes so much money in back royalties, and to some of its most successful artists, is harder to stomach. News of this kind of lapse has the power to shatter your faith in whatever underground-music myths and media-generated personas you've chosen to believe.

When I observe that such strong artist discontent seems shocking in light of K's history and reputation, Johnson clears his throat and says, "Oh, uh-huh? Well, I'm sorry if we've disappointed anyone. We are trying to make amends to anyone we may have wronged."

Asked to describe the current state of the label, he responds as he says he always does: "We're still here. It has always been a struggle. It's just like any other record label. I'm sure if you talk to Jonathan [Poneman] at Sub Pop, they're a very successful label, but it doesn't mean it's easy."

The remorse Johnson expresses toward the artists sounds sincere. He confirms that the label has reduced its staff and its scheduled new releases, as well as selling off its physical assets, in an effort to pay its debts.

"It's not like we're sitting on tons of money and are not giving it to [Kimya]," he says. "We don't have any money. We're trying to work it out so we can pay her. We're selling everything we can to make money to pay the people we owe. I'm sorry it can't happen faster. Both Ms. Dawson and Mr. Elverum have been kept apprised of this and are fully aware of what steps are being taken to rectify the situation."

Does all this liquidation threaten K's very existence?

"We're always going to be here," Johnson promises. "We'll find a way. We're very adaptable. We will continue in whatever form." He says he's excited about the future, even though his Dub Narcotic Studio hasn't proven to be as lucrative as he'd hoped—he was counting on it to raise money to pay royalties. He says he's mulling other ideas.

I ask whether Johnson would be willing to sell the catalog to an outside company. "I don't see that that question is relevant," he says, peeved. "Are you offering to buy the K catalog? Do you have a buyer in mind?"

I say no and ask what the future of K Records looks like.

"We're always open to suggestions and improvements, and we're working on trying to straighten out some of the institutional problems that have been pointed out in this conversation."

After a pregnant pause, he adds: "We're doing the best we can. There's no malice. I don't know the stuff you're talking about. I haven't seen these complaints. Our phone number is open to the world. Any of these people could call me and talk to me at any time about any of these issues. They've chosen not to do so. That's fine. The thing is, we're just human beings. There's nothing sneaky going on around here. There may be some incompetence, but we're working on it."