The Payolas were formed in 1979 around the core musical partnership of singer/guitarist Paul Hyde and lead guitarist Bob Rock. Rock was a studio engineer at fledgling Little Mountain Sound in Vancouver. From that position, he recorded all of the prominent local punk/indie bands and built up his production resumé. Over the next two decades Little Mountain earned a reputation as one of the most in-demand studios in the world of rock music, and Bob Rock became one of the most in-demand producers in the industry.
The Payolas started off in the studio, then made the jump to playing live. In August 1979 they released their debut single China Boys b/w Make Some Noise on their own Slophouse Records label (recorded at Little Mountain Sound, of course). The band were eager to hone their chops in live settings, adding themselves to existing bills as an opening act, just for the experience. Despite their later success, in these early days The Payolas played the same venues as all the other bands on the scene, including Oddfellows Hall and the Smilin’ Buddha. In 1980 the band was signed to A&M Records in Canada (IRS Records in the US).