In an essay titled "The Problem with Music" published by the Chicago-based journal Baffler in 1993, indie-rock agent provocateur/record producer Steve Albini described the process that bands go through in order to be signed to a major label in terms of swimming in a river of shit. Actually, his words were "runny, decaying shit," and the image he conjured was one of several bands, "some of them good friends, some of them merely acquaintances" at one end of a excrement-filled trench, and a "faceless industry lackey holding a contract" waiting at the other end. The bands dive into the trench, race across, wrestle with each other along the way, until one group reaches the contract. The punch line is that the lackey rewards the winners by telling them, "Actually, I think you need a little more development. Swim it again, please. Backstroke."

Yes, this comic diatribe offers an extreme view of what the commercial-record industry is like for new bands. But it also captures the essence of the major-label paranoia that's fueled a teeming indie-rock underground in the US for more than a decade now. And Albini backs up his rhetoric with an example, drawn from his experiences producing major-label releases, of what a typical band might expect to earn from a standard contract. His numbers show that given a $250,000 advance to make an album, and selling 250,000 units, a band would be left with $16,000 to split four ways, with the label earning $710,000 and the band's agent, lawyer, manager, and producer gobbling up the rest. "Some of your friends are probably already this fucked" is his sobering conclusion.

Of course, some of Albini's friends aren't that fucked. Two of them, Mac McCaughan and Laura Ballance of the Chapel Hill-based band Superchunk, have been running the indie label Merge for seven years now, which presents its own set of problems. But it's also meant that for Superchunk and the several dozen other bands that have released albums on Merge, the money gets divvied up in a more equitable fashion. And ever since Albini introduced McCaughan and Ballance to the folks at Touch & Go records in Chicago, which led to a production/distribution alliance between the two labels, Merge has gradually become something of an idealized version of what an indie label is supposed to look like -- a modest, artist-run venture that puts art before commerce and yet still manages to make ends meet and money for its bands, four of which (Butterglory, Karl Hendricks Trio, Neutral Milk Hotel, and the Odes) are on a tour that comes to the Middle East next Thursday, July 18.

McCaughan and Ballance started Merge in 1989. The label's first release was a cassette featuring some tracks McCaughan had recorded with a band called Bricks. Next they borrowed a couple hundred dollars from McCaughan's father to put out a single by the Metal Pitchers, which featured McCaughan and Ballance in a pre-Superchunk incarnation.

"We sort of put that out as a dare," admits McCaughan from the Merge offices in Chapel Hill. "It was a band that had played only a couple of parties, and we were like, `Wouldn't it be funny if we recorded some songs on our four-track and put out a record.' Other than that, the story of how we started the label isn't really that thrilling. Laura and I drove cross-country in the summer of 1989. When we got to Seattle we went and met the Sub Pop guys, and it began to seem like starting a label would be a cool thing to do."

Ballance and McCaughan were also in the process of launching Superchunk, who would go on to release three singles on the label in the next two years. But Merge was motivated by more than just a need to have a place for Superchunk, who were releasing full-length albums on Matador.

"For me it had nothing to do with putting out my own records," Ballance recalls. "The way I saw it was that there were all these bands in the area that were really good but that would come into being and then just disappear without leaving any record of their existence. I just thought it would be really cool if we could make it so that other people could hear those bands. Now the thing that's really important to me about Merge is having a label that deals with bands and presents their records from the perspective of someone who is in a band and knows what it's like to be in a band."

Being in a band remained the main focus for McCaughan and Ballance up through 1992, and they kept Merge as a singles-only sideline. "Because of the financial stuff we were sort of forced to grow slowly. But I think that was a good thing because one mistake a lot of smaller labels seem to make is attempting to force growth that really isn't there in terms of money coming in."

Then, in 1992, Touch & Go agreed to handle manufacturing and distributing for Merge full-lengths, and the Superchunk singles compilation Tossing Seeds (Singles 89-91) was released as a joint Merge/Touch & Go venture. That put McCaughan and Ballance in a position to expand the scope of their business. When Superchunk's contract with the NYC-based indie Matador came up for renewal, the band opted to move to Merge, a decision that not so coincidentally came at a time when Matador was negotiating a deal with Atlantic.

"The reason Superchunk ended up back on Merge," offers McCaughan, "is that Merge had grown and the relationship with Touch & Go meant that we didn't have to come up with huge amounts of capital to put out full-lengths. We figured that if we had all that available to us, then it didn't make sense to be on someone else's label. And it was around the time that Matador was getting into that Atlantic thing, which made us want to stick around there even less."

Since then Merge has released discs by indie heavy-hitters like Magnetic Fields and Polvo, provided a US home for New Zealanders the Cakekitchen and the Mad Scene, and helped develop bands like Butterglory, Spent, and East River Pipe. Superchunk is the label's biggest-grossing band -- their latest sold 60,000 and, with a budget of $12,000, was also the most expensive Merge release to date. McCaughan says that most Merge deals are still just sealed with a handshake. And most of them make money for the band because the break-even point for a Merge release is only a couple thousand units.

Unlike Matador, which severed its ties to Atlantic and is in the midst of securing another major-label arrangement, or Sub Pop, which now has a deal with Warner Bros., Merge remains purely independent. And it intends to stay that way.

"We'd love to be selling a million records," admits McCaughan. "I think the popular misconception is that indie labels want to stay small. We'd love to get as big as we possibly could but still be in control. That's the key. It's a matter of balancing out what you would like to have and what you're willing to sacrifice to get that. And one thing that's not attractive to us is having our label go through a big machine. That doesn't leave you free to do little projects. Major labels don't know how to put out a record just for fun, or how to spend less than $50,000 on a CD."

New Merge releases...