After being kicked out of Metallica, Mustaine formed Megadeth in 1983 with guitarist Greg Handevidt, bassist David Ellefson, and drummer Dijon Carruthers. Carruthers was soon replaced by Lee Rausch and Handevidt left. The now trio Megadeth recorded a demo in 1984 (now found in the bonus tracks of Killing Is My Business... And Business Is Good!). Rausch was replaced by Gar Samuelson after the demo and a few shows. Megadeth signed with Combat Records and added guitarist Chris Poland to the band.
In 1985, the band recorded Killing Is My Business ... And Business Is Good! on a budget of just $8,000 (the band also admits that they spent half that money on drugs). The release included a cover of the Nancy Sinatra song "These Boots are Made for Walking". This later became a legal battle between Mustaine and the writer Lee Hazlewood 10 years later.
On the supporting tour for KIMB...ABIG! in 1985, Poland left the band and was briefly replaced by Mike Albert before returning later in the year.
Peace Sells... But Who's Buying? was recorded first in early 1986 under Combat Records, but due to the low budget, the final mix was not the quality that Megadeth had wanted. So Megadeth signed with Capital Records to remix the record which was released in November 1986.
In 1987, Megadeth began their first world tour as a headliner. After the final show in Hawaii, July 1987, Poland and Samuelson were fired. Mustaine accused Poland of selling band equipment for drug money and Samuelson was unable to perform his duties to the band due to intoxication, even having to be replaced on the tour on some nights. Poland was replaced by Jay Reynolds, then later, Jeff Young. Samuelson was replaced by Chuck Behler.
Recording for the next album began in 1987, this time with a real budget for recording. The original producer, Paul Lani, was replaced because Mustaine was not getting the quality recordings he wanted. So Far, So Good ... So What! was released at the beginning of 1988, with the recordings from producer Michael Wagener. The original mixes can now be heard in the bonus tracks of the 2004 reissue.
Megadeth toured with Dio and Iron Maiden later in 1988. They even ended up on the bill for the 1988 Monsters of Rock festival. There, Behler and Young were both fired. Nick Menza, who Mustaine had already had on crew ready to step in, took Behler's place in 1989. However, no replacement for Young was found and Mustaine played lead for a song on the soundtrack for the film Shocker. Mustaine was arrested under a DWI and entered drug rehab, becoming sober for the first time in ten years.
After emerging from rehab, Mustaine hired Marty Friedman in 1990. With a new guitarist, Megadeth began working on its next album. Rust in Peace was released in September 1990. Megadeth toured on "Clash of the Titans" in Europe, a tour so successful that the following year it was brought to the United States. Megadeth also appeared in the 1991 "Rock in Rio 2" festival in Brazil.
Later in 1991, Megadeth recorded songs for Bill & Ted's Excellent Adventure - Original Motion Picture Soundtrack and the Super Mario Bros soundtrack. They also released Rusted Pieces that same year.
1992 became a crucial year to Megadeth. Early 1992, they began work on the next album. Four months later, Countdown to Extinction was released, featuring a new style of music, a more radio-friendly, less complex sound. It is often compared to Metallica's Metallica released in 1991 with similar shift to more mainstream metal.
In November 1992, Megadeth's second video, Exposure Of A Dream, was released. Following its release, Megadeth started its world tour. The tour was cut short in 1993 because Mustaine began abusing drugs again. He was hospitalized, went back to rehab, and got clean again. He came back to Megadeth and they recorded a song for the Last Action Hero soundtrack. This song, "Angry Again", was nominated for a Grammy in 1994.
Megadeth was nominated for a Grammy award in 1993, but ended up losing to Nine Inch Nails. But because of the lyrical themes of the song "Countdown to Extinction", Megadeth stands as the only metal band to win the Doris Day Music Award.
In June 1993, Metallica had Megadeth as a "special guest" in the Milton Keynes Bowl Festival. Mustaine cheered on stage, saying, "The ten years of bull is over between Metallica and Megadeth!" This later proved to be untrue. The next month, Megadeth played a few dates on the Aerosmith Get a Grip tour. They were fired from the tour after some feuds between the two bands. After this, they recorded "99 Ways to Die" for the The Beavis and Butthead Experience album released November 1993. This song was also nominated for a Grammy in 1995.
Mustaine insisted on recording the next Megadeth album in his home state of Arizona. Unable to find a suitable studio in the area, Megadeth constructed their own studio in a warehouse in Phoenix. The entire album was recorded in studio, a first for Megadeth. In November of 1994, Megadeth released Youthanasia. Following the success of the last album, Youthanasia debuted at #4, going Gold in Canada in just 30 minutes and Platinum in the US faster than any other Megadeth release. The style of tis album pushed Megadeth further towards mainstream music, focusing on vocals and radio-friendly riffs. With a sticker on the album, Megadeth advertised their new website, a new idea at the time. Later that month, Megadeth appeared on Letterman supporting the album and playing "A Tout Le Monde". This song would later receive a video and be banned by MTV.
Megadeth started the tour in November and went on for 11 months, the longest Megadeth tour to date. This tour included the Monsters of Rock festival. In January 1995, Megadeth recorded a song for the Tales from the Crypt soundtrack and covered Black Sabbath's "Paranoid" for Nativity in Black: A Tribute to Black Sabbath, which was nominated for a Grammy in 1996.
Youthanasia Special Edition was released in Europe containing a second disc called "Hidden Treasures" the songs Megadeth had recorded for soundtracks, tributes, etc over the years. The disc was released as Hidden Treasures EP in the US due to fan demand.
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