I swear, I don't make this stuff up: Treasure Isle Recorders, one of those still standing of the longer-toothed generation of significant Nashville music

I swear, I don't make this stuff up: Treasure Isle Recorders, one of those still standing of the longer-toothed generation of significant Nashville music studios, came up with an inventive way to generate new capital. Studio owner and co-founder Fred Vail put a 20% stake in the 21-year-old studio facility up for bids on the Internet auction site eBay in April. He re-listed the facility twice again, in June and July. Directly and indirectly as a result, Vail now has four new partners, and the studio, as of July, had $90,000 worth of new investment capital already spent on microphones, outboard gear, a RADAR recorder, and a 50% down payment on a new Trident 80 5.1 console.

Reaction to Vail's move around Nashville's studio community was a mixture of astonishment and head-shaking. “So it's come to this,” said one studio owner. Pro audio Internet chat rooms were a national Peanut Gallery for the online show, garnering comments like, “I wonder, is this going to be like Jimi's guitar?”

However, in light of the Chapter 11 bankruptcy filing of Emerald Recording in June, Vail's move seems more inspired than desperate. “There were three ways I could have raised the cash I needed to upgrade the studio and stay competitive,” Vail told me. “I could go with a loan and be leveraged and in debt; I could take it out of cash flow, which would take years the way the market is now; or I could look for new investors. Decent classified ads in national publications like Billboard or the Wall Street Journal would have cost thousands of dollars. On eBay, it costs $22 for 10 days. It's kind of a no-brainer.”

While the studio had been a successful enterprise for much of its life, and the site of work by artists including Dolly Parton, Johnny Cash, Isaac Hayes, Linda Ronstadt, Sheryl Crow and Rodney Crowell, Treasure Isle had experienced severe domestic turbulence. The facility was founded by Fred Vail with his brother Morgan, each of whom controlled 40% of the studio's shares, and partner Dave Shipley, who owned the other 20%, according to Fred Vail. Friction between them led to Fred Vail's departure from the studio in 1994, though he retained his share of ownership. After lengthy legal wrangling, Fred Vail bought his brother's share from the estate last year after Morgan passed away in 1997. Shipley sold his share to Vail last year.

After a half-decade away from the business, Vail says he returned to the studio to find that the entire economic landscape of Nashville's music industry had radically changed from 1994, the year country music achieved its highest market share ever. It has lost half that since then, and a once-thriving studio market was now consuming itself. “I felt like Rip Van Winkle, waking up and seeing how the world had changed,” Vail says.

Vail assessed the situation, decided he wanted to come back to the studio business, and figured he needed to upgrade the two-room studio to remain competitive. There are not a lot of takers in the studio business in Nashville at the moment. Hence, the decision to take a flyer on eBay.

The results have been mixed, and not unlike a dating service: Vail had his share of inquiries from the merely curious, to those he suspected wanted to use a small ownership in a Nashville recording studio as an entree into the music business. This didn't discourage Vail. In fact, his spin on the experience is quite the opposite. “It's like selling anything,” he says. “You go door to door selling Fuller brushes and you don't make a sale on the first 30 doors you knock on, but the more you knock on, the better your chances of finding a sale.”

After re-listing the studio a second time, Vail ultimately got an investor from Wisconsin who was willing to acquire 42% of the business, but was unable to meet all the initial payments and took a much lower equity position in the studio based on the amount he did apply. And a friend of Vail's and two of that person's friends also took small shares. To date, he has sold 14.5% of the studio's shares, bringing in $90,000, which would extrapolate the overall value to about $600,000. In a third listing round, Vail is offering blocks of the studio at various minimum bids: 6% for $42,000, 9% for $60,000, 16% for $100,000, and 20% for $127,500.

Vail's assessment of the music business is generously optimistic. In the description of the studio in the eBay listing, Vail tells prospective bidders that they can expect a return on investment of between 16.5% and 20% in the first year, rising to between 24% and 26% by the fourth year after investment. Despite the huge erosion in profitability in the studio business in general in the last decade, and particularly in Nashville, which has lost several major facilities to bankruptcies, Vail maintains that the projections are realistic. “My [monthly] nut is under $6,000,” he says. “I don't need 19 days a month of bookings to break even.”

And Vail should not have been surprised if many of the inquiries he received from the eBay listing were specious or starry-eyed; his description of the studio and music industries is unabashedly rosy: “Current worldwide revenues from within the music industry are approximately $40 [billion],” and that “U.S. album sales were close to 40 million units during the final week of Christmas. Additionally, approximately 1,000,000 albums were sold on the Internet during this same one-week period.”

The description fails to mention the numerous record label closings in Nashville, including Asylum, Virgin and Arista Records, or the thousands of pink slips the record industry distributed in the wake of massive consolidations, or the fact that the entire music industry's 2000 was saved during the holiday selling season by The Beatles One compilation, distorting the actual sales picture, which is reportedly down 4% at mid-year. Or that those Internet sales were paltry compared to the tens of millions of rips from Napster-like sites. It also fails to mention how changes in digital audio technology have rendered the studio business vulnerable to any talented and ambitious kid with a Pro Tools rig and a spare bedroom.

As a prospectus, Vail's eBay listing would not have passed SEC inspection. But on the auction block, caveat emptor is the main regulation to be observed. And if Vail is putting a rosy spin on the music business, well, isn't that what the music business has always been about, anyway? A capacity for self-delusion has always been a condition of entry. The chances of becoming wealthy and famous in the music industry are less than winning the Powerball lottery, yet every day thousands of people decide to spend their lives pursuing just that. And Fred Vail's approach is innovative; whether or not he sells his studio shares at the price he'd like, he will have projected the studio's name far beyond what a brochure could do for the same money.

Check it out on eBay: Item #1618264475. I can't wait to see what comes next.