Baby Grand

1970s tax-scam label from Hollywood, California, USA.
See also [l=Pelican (8)] and .

Baby Grand Records was headed by , a pianist, composer, arranger and record executive who would later go on to become the president of and Records (discovering , and developing careers of and others).

The label was in full swing releasing scores of recordings, all designed to not turn a profit. The premise behind the label had at its foundation a curious loophole in the U.S. tax laws which allowed wealthy investors to realise a tax credit far in excess of their investment. It was really quite simple; an investor would put up a few thousand dollars to cover the production and manufacturing costs. The album would have a minimal number of pressings issued and an accountant would value the recording at tens of thousands of dollars above the costs based on what the investor would have realised, had the record been a commercial success. In this manner, someone could invest, say $5.000, and receive a tax credit of anywhere from $50.000 to $100.000 as a loss on what he “expected” to generate from his initial investment. In the 1970s the economy in the States was slamming and there was no shortage of investors in search of tax credits. It is considered that some of the investors actually fancied the notion that this was their entrée into the music business, and others perhaps just liked the idea of supporting the arts.