» Subscribe Today!
The Power of Information
Home
The Ledger - EST. 1978 - Nashville Edition
X
Skip Navigation LinksHome > Article
VOL. 40 | NO. 30 | Friday, July 22, 2016

Many owners learn Exit/In is not about turning a profit

By Hollie Deese

Print | Front Page | Email this story

Current Exit/In owners Josh Billue, left, and Chris Cobb.

It all started with a couple of high school friends, a vision for a new kind of music venue in Nashville and about $8,000, give or take.

“Maybe those numbers are half of what it was,” says Brugh Reynolds, a native Nashvillian and one of the founders of the venerable music club Exit/In. “Memory fades.”

Forgetting just how much was paid for the club is something many of the 23 owners of Exit/In have in common.

What hasn’t faded is the club Reynolds and Owsley Manier started 45 years ago remains a Music City landmark, but one that has survived bankruptcy, a failed restaurant, rain falling inside the club, almost non-stop expensive renovations and not a lot of profit.

“It’s never going to make you rich, but it needs to be there,’’ says Rick Whetsel, an owner from the early 2000s. “It’s such an important piece of who we are, as Music City … that it just needs to be there.”

“Exit is all love,” says Chris Cobb, the current co-owner with Josh Billue.

“Marathon [the duo now own Marathon Music Works] is the breadwinner for sure. Now, we have Hurry Back [a bar and restaurant] next to Exit/In, and it makes money.

“Exit/In makes money, too – I don’t want to give the impression that it runs in the red every month or anything, because that’s not the case.

“It doesn’t make a lot of money. Anybody out there who can open a 500-cap (seat) club, they should be doing it for the love, not for the money. There’s a lot more love than there is money.”

Cobb and Billue turned down an offer from California-based live-events and promotions company Live Nation in January 2016. The deal was for Exit/In and Marathon Music Works for an undisclosed but substantial amount of money.

The Exit/In would have finally made someone profitable.

The beginning

After Reynolds graduated from college, he returned home to Nashville and went to work for what was then Third National Bank. In 1971, he took a teaching job at Montgomery Bell Academy.

While he was at the bank, Reynolds had discovered a location on Elliston Place that was managed out of the trust department, a space he says had originally been an H.G. Hills grocery store, but a 1979 article in The Tennessean states the space was an old amusement business, and Elder’s Book Store was in the old Hill grocery.

Reynolds and Manier thought the small space – with a walk-in vault ­– was the perfect spot to open a music venue because of its proximity to Vanderbilt University. “So we negotiated a lease,” he says.

Manier and Reynolds had been friends since high school at MBA; Manier was in a band, and Reynolds promoted music events in high school and in college.

“I was fairly familiar with working with talent agents,” Reynolds adds. “We were just looking to create a place where people we knew who were artists, musicians, writers could play, and we, as consumers, could enjoy what Nashville had to offer, which at that time was not very much.”

Back in 1971, the Grand Ole Opry was still at the Ryman Auditorium, and while it was an institution, Reynolds says it didn’t really feel as relevant then as it does now. “It seemed to be more of a museum of music rather than what it’s become over the years,” he says.

“We knew that there was a lot of music in Nashville that was not country music, and that’s what we decided we wanted to be a forum for.”

The old office space was configured in such a way that there was no place to put the stage except on the street end of the building, right by the front door.

“Obviously we couldn’t have people walking in and out by the stage because we wanted to present music seriously,” Reynolds says. “We didn’t want it to be background music. We didn’t want it to be like piano bar where everybody’s trying to talk over the music.

“Matter of fact, we insisted upon attention like you would in a movie theater when the artist was performing so that’s where the name came from – we had to use the rear entrance which made it kind of obscure and probably caused us more trouble than we would have otherwise.”

An evolving Rock Block

The club opened the same week as the T.G.I. Friday’s up the street.

“Between us and Fridays there was Russell’s Hurry Back Market, which was a little drive-in market,” Reynolds recalls.

“It was a little market where you dropped in to buy cigarettes or beer or whatever, and there was a sporting goods store on the same side of the street down the block from us, and Elder’s Bookstore which remained there for years. Ellison Place Soda Shop was down the block so [the area] was not exactly what you would call vibrant although the opening of Fridays began the change.”

The Gold Rush, a saloon, bar and restaurant that would develop landmark status of its own, came along, and Elliston began to be known as the Rock Block.

But when Exit/In first opened, Reynolds says it was attracting an older crowd. It was just the beginning of Reynolds and Manier learning to roll with the punches.

“We had a hard time from the very beginning,” Reynolds says. “The first nine months we operated the club we kind of felt like we were getting some traction, so we decided to go into the building next door and knock out the wall between them. That’s when it became what I would call the classic Exit/In.”

Knocking out that wall brought bigger successes for Reynolds and Manier, but also bigger problems with the addition of the city’s first vegetarian restaurant to the listening room.

At the time a venue had to have a restaurant in order to have liquor by the drink.

“The restaurant business has one of the highest rates of failure of any business there is, and we were already in show business which was even riskier. It was always kind of a balancing act,” Reynolds explains.

“You have to understand that the entertainment scene, the nightlife scene in Nashville was nil in 1971. Liquor by the drink hadn’t been legal in Nashville until 1965, and so people’s idea of going out was to go to a restaurant, go to a movie or stay home and watch TV. Going out to hear music was not on a list of options for locals.”

That meant a learning curve, Reynolds says, for a clientele asked to pay a cover just to walk in the door.

“Henry Ford had a hard time selling automobiles because nobody else had them,” Reynolds points out.

“We were selling entertainment, and nobody else was. When we opened up we were charging 50 cents, 75 cents. We actually had people come in the door and say, ‘Well, I’m not paying 50 cents to come in here. That’s ridiculous,’ and turn around and walk out.

“We had a hard time educating our audience that this wasn’t the kind of place where you came and ordered some beers and then carried on a conversation with your buddies.”

Linda Ronstadt’s appearance in 1973 marked the first time they had to turn people away, Reynolds says. After that they began to book some known jazz acts and supporting touring acts, and were kind of making a go of it.

Robert Altman filmed scenes from his movie “Nashville’’ there, but Reynolds doesn’t recall getting paid anything. It created plenty of buzz, but it never really translated into big money, at least not for him.

Going through bankruptcy

It was right before the room expansion that Liz Thiels came in as a third owner of the club. She had been working in public relations and found out about the club through one of two regular live broadcasts the club aired on WKDA and WPLN.

“I was listening to KDA, to all this great music, and the very next night I went down there,” Thiels recalls. She quickly became a regular and got acquainted with Manier and Reynolds.

“That’s when I got involved,” she says. “I think the reason that they wanted me to come in was I was going to give them some money. I bought out one of the early partners, and then purchased a little additional stock as well. To the horror of my parents, I borrowed money to buy in. I think it was $20,000 and it took me a long time, many years, to pay it back.”

Thiels threw herself into the club, handling the schedule, securing press and even working the door or standing in as dishwasher when needed – anything to make the club a success.

“I thought what they were doing was just incredibly wonderful and such a great asset to the city, and a big plus for the music industry. I thought it was a wonderful place and I just couldn’t believe it wasn’t more successful than it was,” she says. “I don’t think people really realized what was going on down there.”

But there was also recession in the ’70s. The price of gas, airlines flights and hotel rooms went up. It became more expensive to book artists, and people didn’t have a lot of money to spend.

“It was never a whole lot of black at the bottom line,” Reynolds says. “It was always a struggle.”

Reynolds stopped handling the daily operation at the club in 1974.

The club had filed for Chapter 11 bankruptcy by November 1975. An article in the Nashville Banner valued debts at $123,558 and assets at $47,503. Manier and Thiels were named by the court as the managers and worked with no salary for more than a year.

“Owsley and Liz operated the club for the court, on to the next in the line in the long succession of new owners,” Reynolds says. “It became apparent that whatever difficulties we had in making it go, whether it was as a vegetarian restaurant or whatever else we tried to help build income and build traffic, it became apparent the need and the marketplace was really greater than our desire to own and operate. It really got to be bigger than us.”

Thiels and Manier stayed with the club until bankruptcy was settled, with Thiels staying on even longer, continuing to do PR and marketing. But she didn’t work there full-time, then or since.

Renovations a constant

The all-black, 4,815-square-foot building itself was built in 1953 and sits on one half acre of Elliston Place. Records show the property owners are listed as Gene Nash and Anthony Rentals in Nashville. The land and building is valued at $1,642,800.

Owners of the Exit/In over the years have only leased the space, and buying the club has meant taking over the name and business, not the property.

It can be a leap of faith for owners who also inherit any issues the aging building has, causing them to make many renovations or repairs on a structure that isn’t even theirs.

Current owner Billue says the Exit/In’s lease is secure for a good while, and he won’t have to worry about being forced to vacate.

“The landlord group has consisted of the same families since the inception of the Exit/In,” he says. “They take a lot of pride in the Exit/In, and it would not be here today without their support.”

Ned Horton purchased the club in late 1997 and says he immediately put $25,000 into new tile, fresh paint, the outside deck and replacing the original heating and air conditioning system.

“I’m sure the renovations were probably more than the cost,” Horton says. “At that point in time I felt like it needed rejuvenation. It was in need of some physical repairs.”

Horton moved to Tennessee in 1986, and Exit/In was his first experience owning a club, despite having spent 14 years booking and promoting shows for radio, including Rebel 100, the radio station he moved to Nashville to start.

“I was looking for other ventures, and it was a good fit with the artist management,” he explains. “We had artists that could practice there, they could open for shows, they could record videos there, they could rehearse before they went out on tour. There was a lot of synergy. I just thought it worth maintaining and resurrecting. Not resurrecting, but rejuvenating. Really it needed a little boost at that point in time.”

The club closed for a bit while the work was done, the restaurant closed and codes were passed, and Horton still remembers the first show they had after they opened back up.

“It was January, and the act we booked was Dave Mason,” Horton says. “The crowd that he drew was mostly male and over 40 years old, and it was a Friday night. It was a good crowd, and it was a good show but I remember the folks from the ABC were there looking for underage Vandy kids.

“They wanted to see if the new club was checking IDs. Totally the wrong show for them to try to bust.”

A rebirth

Horton became a silent partner when the Exit/In was bought into by California-based management group 3MK in 1999. A year later, Horton’s partner, Jay Langford, took over the club operations. Things went south fast, until one of Horton’s former general managers of the club, Rick Whetsel, stepped up as next in line to own the club in 2002.

As vice president of booking and production for G7 Entertainment Marketing, Whetsel has a background that includes promoting and producing concerts, festivals, Broadway shows and even Olympic ceremonies. He founded the production company Great Big Shows in 1994.

When he moved to Nashville in the mid-90s, he ended up running the Exit/In for Horton when he owned it, then bought it himself in 2002 when the club needed to be saved once again. He also doesn’t remember what he paid for it, other than it wasn’t much.

“The reason being, there wasn’t much to buy,” he adds. “When we took the building over, they did not have working heat or air conditioning.”

That wasn’t the only thing that needed repair. The first show under Whetsel’s ownership was about one month after he took it over. It was raining that night, a fact he remembers vividly because it also rained inside the club.

“It rained more inside the venue than outside. It was awful,” Whetsel adds. “The first thing was a new roof, and then it was one thing after another after another. It was pretty bad. The dressing rooms were ... It was really bad.”

Whetsel guesses those initial renovations cost about three times what he paid for the club.

“You just couldn’t stop working on it. You always had to work on it. It’s like owning an old car, there was something constantly going wrong,” he says.

Still, Whetsel reinvigorated the club not only with renovations but booking the types of bands that made it important in the music scene again.

“It had really slipped down the list of venues to play, especially for touring bands,” he says. “That was our big goal, to use our booking clout to get everybody to play there again. Luckily, through a lot of people’s hard work, we were very successful. The people at that point who worked for me for the Exit/In, they were some amazing people.

“David Kells, who’s now the senior vice president for booking at Bridgestone Arena, worked for me at the time. Then David left, and Chris Cobb came in, and Chris brought some great energy too.”

Whetsel says he took a lot of the way he viewed the club from his former boss Horton.

“Conservators is a word we use, and caretakers,” he explains. “We’re caretakers of something, and it was our job to make sure that the people who came after us had a healthy, wonderful venue. You have to pour money into that place.’’

After a few years of ownership things were going well for the club as Whetsel’s music promotion business continued to grow. He was in Birmingham booking shows, and one night in 2006 was talking to the owner of a club there, Zydeco. He told Whetsel that he wanted to partner with him at the Exit/In and that is when current owner Josh Billue came on board.

“Little by little over the years I got out, and Josh got more in and after I got all the way out, Josh brought Chris (Cobb) in.

“It felt like the circle had been tied together,” Whetsel says.

The current caretakers

Billue, 35, beat out another interested party to purchase the Exit/In on December 7, 2006.

“I’m a small businessman,” Billue says. “We make money but we don’t really have a lot of tangible assets. It makes it kind of difficult to quickly jump into things.’’

Cobb, 37, was the interested party Billue beat out to buy Exit/In in 2006, and he got another blow when Billue took over the club and fired him a month later.

In the 90s, Cobb got linked in with the now-defunct nonprofit Nashville Entertainment Association.

“They gave me the job of going around to all the clubs, distributing and then collecting the wrist bands,” he says. “I met every club owner or manager in Nashville in a one-week period when I was 18 years old. That was totally by chance, but it was a really important experience. It really opened the doors for me. Now I had these connections and I knew these people face to face.”

Cobb was doing show promotions at Exit/In after graduating from Belmont University when then-owner Whetsel offered him a job.

“I was living in this little basement apartment and eating beans out a can, so I didn’t even think twice. I took that job,” Cobb says. He worked for Whetsel until he sold the club to Billue, who then fired Cobb in January of 2007.

“I was definitely bummed,” he says. “I was on Elliston five nights a week. It was a huge part of my life. I wasn’t mad at Josh, but I thought that he was making a poor decision and I expressed that. But it ended up being the best thing that could have happened to me.’’

A growing partnership

Cobb and Billue continued to promote shows together after Cobb was let go from the club, and after talking they came up with the idea of doing a larger room, not to compete with the Exit/In, but to complement with a space that was larger than The Cannery venue.

“We found a commercial real estate broker through a mutual friend and started looking at buildings,” Cobb explains.

After two years of looking they were close to a deal on an old car dealership behind 12th and Porter, but the deal fell apart. Cobb and Billue walked away, and Cobb decided to move with his family to Florida.

“I think the day that he left, or maybe the day after he left, I walked into what is currently the Marathon space and knew I’d found it,” Billue says. “I called Chris, got him to come back and look at it, and we started Marathon together.”

So three months after moving to Florida, Cobb and Billue became partners in Exit/In as well.

“It was the first time I had actually had a partner,” Billue says of Cobb. “I’ve always just been on my own before then. It went pretty well and eventually it got to a point in time where I thought it made sense to have Chris involved in everything I did.”

That was five years ago, and three years later they added Hurry Back [a bar and restaurant] to their portfolio on the site of the area’s original Hurry Back Market on Ellison, offering beer and a small menu of food.

“The Rock Block in particular is an older section of Nashville. Chris and I both hold that pretty dear, and we didn’t want somebody to come in and disrupt that on the street,” Billue says. “We tried to be pretty conscious with the fact that it’d be nice to add something that we thought had a value to the street as a whole but also fit in with the businesses.”

Cobb and Billue are also now in the beginning phases of remodeling the 1,500-capacity Marathon Music Works, something they had strategically put off until the club had some legs under it.

And the pair aren’t stopping now – they are open and actively looking for even more opportunities even as they turned down a lucrative buyout offer for Exit/In and Marathon Music Works from Live Nation earlier this year – a move Cobb had initially talked Billue into accepting, then talked him out of at the last minute.

“We were going to sell,” Cobb says. “It would have definitely given Josh and myself some financial freedom, freedom to choose a path and money in the bank to do that. But I finally came to realize, I don’t want to choose a path.

“I love what I do. I love Exit/In. I love the scene, and being a cog in the wheel of the national music scene. I like to be that cog. I didn’t want to stop being it yet.”

Follow us on Facebook, Twitter & RSS:
Sign-Up For Our FREE email edition
Get the news first with our free weekly email
Name
Email  
TNLedger.com Knoxville Editon
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0